Dallas Fort Worth Insurance Lawyer Blog
Failure to provide written notice of a claim to life insurance proceeds can prove fatal to being able to receive those proceeds. This is what happened in the 1995, Fort Worth Court of Appeals opinion styled, Hunt v. Jefferson-Pilot Life Insurance Co.
Jefferson Pilot issued a life insurance policy on the life of Hunt in 1989. Elizabeth Hunt was listed as the primary beneficiary. In 1990, the Hunts were divorced and Ms. Hunt became Ms. Berks. Hunt died in 1991 without making any changes to the beneficiary designation on his policy. Eleven days later, Berks submitted a claim for proceeds under the policy. Jefferson-Pilot paid the benefits to Berks on October 16, 1991. Plaintiff, the heir of Hunt, brought this action against Jefferson-Pilot based on the old Section 3.632 of the Texas Family Code, which is now Section 9.301(c)(1) which states a designation of insurance benefits to a spouse is invalidated by a divorce or annulment subsequent to such designation. The old Section 3.362 and current section also states that an insurer is not liable for payment of the proceeds of a policy to an ex-spouse unless: (1) before payment of the proceeds the insurer receives written notice at the home of the insurer from an interested person that the designation is not effective under this section, and (2) the insurer has not interpleaded the proceeds into the Registry of the Court.
Similarly, the old art. 3.48 of the Texas Insurance Code discharges the insurer from liability under the policy in the absence of the receipt by it of notice of an adverse claim to the proceeds of the policy from one having a bona fide legal claim. Accordingly, even if the insurer had received a copy of the divorce decree, it would have only provided Jefferson-Pilot with constructive notice which does not constitute written notice under the old Family Code or the old Insurance Code. Therefore, Jefferson-Pilot has no liability to plaintiff.
It is important to understand that this case discusses old law that may or may not be interpreted to be good law today.