Grand Prairie insurance attorneys need to know what is prohibited to be put in a life insurance policy by an insurance company.
The Texas Insurance Code has sections that say what some of these prohibitions are.
Some of the more important sections are Texas Insurance Code, Sections 705.001 through 705.004. 705.003 tells us that an insurance policy provision that states that a misrepresentation, including a false statement, made in a proof of loss or death makes the policy void or voidable, has no effect, and is not a defense in a lawsuit brought on the policy unless the insurance company can prove the following:
i) that the misrepresentation was fraudulently made;
ii) that the fraudulently made misrepresentation was a fact material to the question of the insurance company liability under the policy; and iii) the fraudulently made misrepresentation misled the insurance company and caused the insurance company to waive or lose a valid defense to the policy.
Section 705.004 tells us that an insurance policy provision that states that false statements made in the application for the policy or in the policy make the policy void or voidable:
1) has no effect; and 2) is not a defense in a suit brought on the policy.
To get around subpart 1) and 2), the insurance company must show that the matter misrepresented was material to the risk; or contributed to the contingency or event on which the policy became due and payable.
Subpart (c) to Section 705.004 is the most important to lawyers and their clients when an insurance company alleges there was a misrepresentation made. It says:
It is a question of fact whether a misrepresentation made in the application for the policy or in the policy itself was material to the risk or contributed to the contingency or event on which the policy became due and payable.
This subpart (c) is important because it means it would be improper for a Judge to throw out a case in a summary judgment proceeding. This means that the case can be tried to a jury and that a jury gets to decide who it wants to believe, an insurance company or the individual who had insurance with that company.
Other prohibited provisions of an insurance company prevent them from limiting the time to sue to less than 2 years. This is found in Section 1101.053.
Other prohibited provisions are found in Sections 1101.054 and 1101.055.
Anyone who wonders whether or not what an insurance company is doing is legal should consult with an experienced Insurance Law Attorney.
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