Life Insurance

Life Insurance – Taking Delivery

April 23, 2017 | Mark S. Humphreys

Texas Hill Country life insurance lawyers will tell you that a life insurance policy has to be read carefully. This even means that the initial application has to also be read very carefully. This is illustrated in a 1999, San Antonio Court of Appeals opinion. The opinion is styled, Carolyn Noseff v. Tower Life Insurance Company, et al.

Mr. Noseff applied through an agent for a life insurance policy with Tower Life Insurance Company. He died before the policy was delivered. It is undisputed that delivery of the policy and collection of the first premium was a valid condition precedent to the policy’s going into effect. His wife sued alleging that Tower Life failed to use ordinary care in delivery of the policy. Tower Life moved for summary judgment, which was granted. Mrs. Noseff, the wife of Mr. Noseff, filed this appeal.

This San Antonio Court of Appeals affirmed the summary judgment in favor of Tower Life. The policy stated that it would not take effect until “the policy is delivered to the owner and the first full premium is accepted by the Company while the proposed Insured is alive …”. There is no question that Noseff died without taking delivery of the policy, and signing off on the policy amendments. While Texas courts have long recognized that an insurance agent owes a duty to a client at the inception of coverage, Texas does not recognize a claim against an insurance company for failure to deliver an insurance policy. The cases relied upon to establish that an insurance agent can be liable to an insurance applicant if the agent fails to follow through on the promised performance does not pertain to the insurance company’s liability. An agent or broker undertakes to procure insurance for another is paid therefore.

Life Insurance Application

April 15, 2017 | Mark S. Humphreys

Granbury life insurance lawyers need to read this 1975, Texas Supreme Court opinion. It is styled, Johnson v. Prudential Insurance Company of America.

This is a suit to collect benefits under a group life insurance policy. Prudential resisted payment based on their assertion that the deceased willfully deceived the company by her statements made in procuring coverage. The beneficiary contends that the statements of the insured were inadmissible and could not be considered because copies of the application were not furnished to the insured in compliance with what is now the Texas Insurance Code, Section 705.103.

Ten years before applying for this insurance, Mrs. Johnson, the insured, had her right breast removed because of cancer. Mrs. Johnson made what she could have regarded as true statements, but they were incomplete and misleading.

Life Insurance Misrepresentation – Age

April 11, 2017 | Mark S. Humphreys

The Galveston Court of Appeals issued an opinion in 1938 that is still good law. The case is styled, Texas State Life Insurance Company v. Freeman Barton.

This is an appeal from a trial to the Judge wherein Texas State was ordered to pay the life insurance proceeds to the beneficiary together with the statutory penalty and attorney fees.

The policy had been issued on Marie Clemons on July 10, 1935, with Barton as beneficiary and Marie having died on November 29, 1935. (As a side note, this case points out “both of them being negroes,” – makes you wonder about that time in history).

Life Insurance Sitting Around?

April 9, 2017 | Mark S. Humphreys

Have you ever wondered if someone has left you an insurance policy you do not know about. The Los Angeles Times published an article in March 2017, that you might find interesting. It is titled, How To Score A Piece Of California’s $365 Million In Unclaimed Life Insurance Benefits.

It might surprise you to learn that the state of California is sitting on a pile of cash that belongs to consumers — a big pile of cash — and is having trouble giving it away.

At issue are life-insurance payouts owed to state residents. Under California law, insurers are required to turn over to the state any funds that go unclaimed for three years. But audits of insurers’ books that began in 2008 found that the companies were clinging to billions of dollars that didn’t belong to them.

Life Insurance And Citizenship Status And ERISA

March 19, 2017 | Mark S. Humphreys

Llano life insurance agents need to know about this case from the United States 5th Circuit. It is a 2011 opinion styled, Araceli Medina Garcia v. American United Life Insurance Company.

Araceli’s husband, Salvador, died in a car accident. He had a policy with American through his employer. The policy was an ERISA plan. American’s plan administrator denied Araceli’s claim for benefits because Salvador was living illegally in the U.S. Araceli filed a lawsuit seeking benefits. On Salvador’s policy enrollment form he indicated his date of birth and social security number.

When Araceli made a claim for benefits, she submitted a proof of death form, her Mexican identification card, and Salvador’s death certificate, identifying his date of birth as above and his place of birth as Mexico City and the above social security number. No documents reflected Salvador being a U.S. citizen. American was then sent Araceli’s alien registration card and a copy of Salvador’s I-9 form, which was expired.

Life Insurance Policy – Misrepresentation And Cause Of Death

March 12, 2017 | Mark S. Humphreys

Dallas and Tarrant County life insurance lawyers should read this case from 1932. It is important to point out that this case has been disapproved by a later court but the idea behind the case is still relevant to arguing similar facts. The case is styled, First Texas Prudential Insurance Co. v. John Pipes and is out of the El Paso Court of Appeals.

John Pipes was the beneficiary on a life insurance policy insuring the life of his wife. When she died, he submitted a claim for benefits and was denied. Upon trial of the case, judgment was awarded to Pipes and this appeal followed.

First Texas points out that the application for insurance contained the question: Has life proposed ever suffered from consumption? The question was answered “No.” First Texas submits that said answer was false; that the application was signed by Pipes and without the knowledge of the insured; that the uncontroverted evidence shows that if the application for the policy had reflected that the assured had had incipient tuberculosis, though arrested, said application would have been rejected, and that under the evidence the court should have found that said representation was material to the risk as well as false, and, so finding, should render judgment for First Texas.

Mason Life Insurance Lawyers

March 11, 2017 | Mark S. Humphreys

If you are a Mason County Texas life insurance lawyer, here is a 1967, Tyler Court of Appeals opinion you need to know. The opinion is styled, Southern Life & Health Insurance Company v. Gordon Grafton.

This lawsuit resulted from the denial of life insurance benefits from Southern Life to Gordon after the death of his wife. Southern Life denied the claim due to policy language stating: “This policy shall take effect on the date of issue provided the assured is then alive and in sound health and free from accidental injury.”

Southern Life asserts that Gordon’s wife, Marjorie was not in good health. They then returned the paid premiums.

Wrong Age On Insurance Application

March 4, 2017 | Mark S. Humphreys

What can happen when the wrong age is on a life insurance application? If you are a Mason County insurance lawyer, you should read this Northern District, Dallas Division, opinion. It is styled, Jackson National Life Insurance Company v. Lance Robbins, et al.

On a prior opinion in this case, the court granted Jackson National’s motion to interplead funds into the court registry, minus attorney fees and court costs totaling $7,000.

Jackson National now moves the court to amend the motion because they have learned the aged of the insured was misstated in the policy application and as a result, the one million dollar policy is now $907,502.02.

Insurance Application Misrepresentations And Their Importance

February 14, 2017 | Mark S. Humphreys

Mason Texas insurance attorneys need to know a few basics about insurance law when discussing potential cases and the surrounding facts with a client.

To begin with – When is a representation in an insurance application important? According to a line of cases, including (1) a 2014 federal case styled, Weidner v. Nationwide Property & Casualty Insurance Company, (2) a 1995 Houston Court of Appeals [1st Dist.] styled, Darby v. Jefferson Life Insurance Company, (3) a 1965 Austin Court of Appeals case styled, Manhatten Life Insurance Company v. Harkrider, a “representation is material if it actually induces the insurance company to assume the risk.”

According to a 1976 Waco Court of Appeals opinion styled, Westchester Fire Insurance Company v. English, the insurer must show that it was induced to assume the risk by the misrepresentation. According to the Texas Insurance Code, Section 705.004(c), this determination is a question of fact — the very language of the statute makes that “fact” clear. (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 is backed up by case law in a 1985 Corpus Christi Court of Appeals opinion styled, Carter v. Service Life & Casualty Insurance Company, holding that the statute provides the materiality of any false representation is a question of fact.

Life Insurance – To Void Policy, There Must Be Intent To Deceive

February 11, 2017 | Mark S. Humphreys

Mason life insurance lawyers must understand that for an insurance company to prevail on a defense of misrepresentation, the insurer must prove the intent to deceive. This is discussed in a 2013, Dallas Court of Appeals opinion styled, Medicus Insurance Company v. Frederick Todd, II, M.D.

Medicus provides medical malpractice insurance to physicians and health care providers. Dr. Todd submitted a two page application for insurance. The application asked if Todd had “ever been the subject of an investigation by any … licensing authority,” and he checked the “No” box. In fact, Dr. Todd had been twice investigated by the Texas Medical Board for having three or more medical malpractice claims in a five-year period. The credentialing application also asked if he had “ever had any malpractice actions within the past 5 years (pending, settled, arbitrated, mediated or litigated),” and Dr. Todd checked the “Yes” box and attached a description of four lawsuits filed against him between May 2000 and when he signed the application in May 2005. Dr. Todd omitted one lawsuit from the list of claims filed between May 2000 and May 2005. Dr. Todd also failed to disclose another lawsuit filed between his signing the credentialing application and his applying to Medicus.

The underwriter suggested to Medicus that the application be denied but Medicus decided to accept it.