Life Insurance Paid Too Late: The Insurer Remains Liable in the Event of a Delay by the Bank
A beneficiary who has been waiting eight months for their death benefit is not left with no recourse. A recent decision by the Insurance Ombudsman reaffirms that an insurer remains liable for the failures of its agents, whether they are banks or other intermediaries. Late payment interest remains due, even when the delay is not directly attributable to the insurer.
January 2025. An insured person dies, leaving behind a life insurance policy taken out in 2010. The beneficiary promptly notifies the insurer’s agent bank and provides the bank with his or her contact information. However, the death benefit of approximately 28,000 euros will not be paid out until the following September—eight months after the death. The beneficiary considers this delay to be unreasonably long. His claim for late payment interest, based on Article L.132-23-1 of the Insurance Code, will be referred to the Insurance Ombudsman.
This anonymous but emblematic case illustrates a gray area in life insurance law: What happens when an insurer has delegated part of the process to a banking intermediary who delays in forwarding the documents to the beneficiary? The Insurance Ombudsman provides an unambiguous answer: The insurer cannot shift its responsibility onto its agent.
Fifteen days to request the documents: what Article L.132-23-1 says
The legal framework is clear. As soon as the insurer becomes aware of both the insured’s death and the beneficiary’s contact information, it has fifteen days to request from the beneficiary the documents necessary for the payment of the death benefit. The legislature intended this deadline to be binding: failure to meet it triggers the payment of late-payment interest at the statutory rate, which may then be doubled and subsequently tripled depending on how long the delay has lasted. The objective is to act as a deterrent: to prevent funds from remaining unclaimed for months or even years simply because they were not claimed in a timely manner.
In the case submitted to the Ombudsman, the insurer claims to have met this deadline. Its account is specific: it states that it sent a request for documents to its banking agent as early as February 2025, to be forwarded to the beneficiary. Once the documents were received at the end of August, it claims to have made the payment within the statutory time limit. According to the insurer, the delay is not its fault but stems from the internal transmission process between the bank and the beneficiary.
The defense is not convincing. The Ombudsman raises a key point: the burden of proof. The insurer was required to demonstrate that its agent had in fact sent the request for documents to the beneficiary within the fifteen-day period. However, this demonstration was lacking. Simply sending an internal instruction to its bank is not enough: it must be established that the request reached the beneficiary and that it arrived on time.
The argument regarding the chain of agency does not hold up in light of the burden of proof
The reasoning is based on a classic principle of contract law: a principal remains liable for the acts of its agent. When an insurer chooses to delegate the document collection phase to a banking partner, it assumes legal responsibility for any failures in that chain. It cannot cite the complexity of its internal organization as a defense against the beneficiary in order to evade its legal obligations.
For insurance companies, the message is clear from an operational standpoint. They must actively monitor the steps taken by their agents and maintain a written record of correspondence sent to beneficiaries within the legally prescribed time limits. A simple internal email between the insurer and the bank is not sufficient to demonstrate the due diligence required by the Insurance Code. Information systems and claims management workflows must incorporate this evidentiary requirement.
For beneficiaries, the decision is reassuring for two reasons. First, it confirms that they have a real recourse in the event of a delay, whether it stems directly from the insurer or from an intermediary. Second, it clarifies when the time limit begins: it is the actual transmission of the contact information that triggers the 15-day countdown, not any internal communication between the insurer and its network. Heirs who notice an unusual delay can therefore file a complaint with the Insurance Ombudsman, free of charge, by attaching documents detailing the chronology of communications. Late payment interest, though modest in absolute terms on a principal amount of 28,000 euros, serves as a symbolic gesture here: life insurance remains an investment intended for rapid distribution, and any unjustified delay now carries a cost for the defaulting insurer.
