Opinion ID: 894821
Heading Depth: 1
Heading Rank: 2

Heading: Was Toni a Named Beneficiary under the Statute?

Text: State Farm first argues that Toni is not covered by the prompt payment statute, and thus entitled to none of its penalties. As set forth above, the statute makes insurers liable to either a holder of the policy or a beneficiary making a claim under the policy. Toni was not a policyholder, so she may recover only if she was the latter. The statute defines a claim to further limit coverage to beneficiaries named in the policy: Claim means a first party claim made by an insured or a policyholder under an insurance policy or contract or by a beneficiary named in the policy or contract that must be paid by the insurer directly to the insured or beneficiary. [9] State Farm argues that Toni was not a named beneficiary at the time of Ed's death  due to its refusal to honor Ed's change-of-beneficiary request. Generally, an insured's right to change beneficiaries is governed by the terms of the policy. [10] The policy here provided that a change of beneficiary would take effect when Ed signed a written request. [11] The policy defined a request as one written in a form acceptable to us. [12] As Ed signed and sent his request on State Farm's own printed form, it is hard to see how it could be deemed unacceptable. State Farm's valid concern that Ed's request might violate the divorce decree (a matter discussed below) did not make the request's form unacceptable. But even if it did, and even if State Farm was right to check first, the policy still said that a change would take effect when a request was signed, not when it was accepted. Once Linda agreed to release her claims on the policy during the course of the litigation, Ed's designation of Toni became effective  retroactively  as of the day it was signed. The Legislature has instructed us to construe the statute liberally to ensure prompt payment of insurance claims. [13] Accordingly, we hold that Toni was a named beneficiary entitled to prompt payment under the statute.