Dallas Fort Worth Insurance Lawyer Blog

Many times, for a life insurance lawyer, the question is, When did the life insurance coverage take effect.

This question was partially answered in a 1980 opinion from the Eastland Court of Appeals.  The opinion is styled, Durham Life Ins. Co. v. Cole.

Kim Cole, a widow, individually and as next friend for her two minor children, sued Durham claiming benefits under a group life insurance policy written by Durham.  A trial resulted in a judgment against Durham for $10,000 together with penalty of $1,200 and attorney fees of $5,000.  Durham appealed and this Court ruled in favor of Durham.

Life Insurance Lawyers have many potential clients where in the basis for denial of the claim is that insured made a misrepresentation in the policy application within two years of making the application.  This two years is called the contestability period.  After two years the policy is supposed to be incontestible.  The Southern District of Texas, Houston Division, issued an opinion in September 2021, wherein one of the issues dealt with the incontestability period.  The style of the opinion is, Pruco Life Insurance Company v. Blanca Monica Villarreal and Transamerica LIfe Insurance Company v. Blanca Monica Villarreal.

In this case, the insured had purchased two very large life insurance policies from the Pruco and Transamerica.  The details of the case can be read in the opinion as can the other issues presented.  Discussed here is the issue of Incontestability.

Villarreal moved for partial summary judgment on this issue that the policies are incontestable on that basis that under Texas law, insurance policies cannot be contested after remaining in effect for two years during the insured’s life.  Villarreal argues that even if Texas law permits insurers to raise a material and intentional misrepresentation defense after the two years, that challenge would not apply here because the life insurance policies did not contain the language reserving the right to raise the challenge.  Additionally, Villarreal argues that the defense would apply only if the insured (Rosendi) was residing in Texas “during the term of his life insurance policies.”  The insurers oppose on the basis that an exception to incontestability exists when an insurer can prove material and intentional misrepresentations and that the exception applies to Rosendi’s life insurance policies because he was “in” Texas when he contracted for the policies
and when the policies were delivered to him.

Here is a life insurance case wherein the insurance company attempts to have the Court agree to rescission of the policy.  It is a 2021, opinion from the Southern District of Texas, Houston Division.  The opinion is styled, Pruco Insurance Company v. Blanca Monica Villarreal – Transamerica Life Insurance Company v. Blanca Monica Villarreal.

This opinion regards both sides filing motion for summary judgement.  The case involves millions of dollars of life insurance.  The facts of the case are long and detailed and the opinion should be read to understand the facts.  The case also deals with many issues.  The issue discussed here has to do with rescission.

The insurer claim there are undisputed facts that show material, intentional misrepresentations made in the application for insurance, warranting rescission as a matter of law.  A material fact is one that might affect the outcome of the suit
under governing law,” and “a fact issue is genuine if the evidence is such that a reasonable jury could return a verdict for the non-moving party.