And the Defense Wins

By: Chip Delano. This was posted Tuesday, April 14th, 2015

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In Banner Life Insurance Co. v. Jacqueline L. Noel, 2013 U.S. App. LEXIS 1539 (4th Cir. 2013), aff’g 861 F. Supp. 2d 701 (E.D. Va. 2012), the U.S. Court of Appeals for the Fourth Circuit recently affirmed the district court’s granting of Banner’s motion for summary judgment limiting its obligations to return of the premium paid by the proposed insured.  Former DRI Mid‑Atlantic Regional Director and DRI State Representative for Virginia, Robert B. “Chip” Delano, Jr., of Sands Anderson PC in Richmond, successfully obtained a declaratory judgment in Banner’s favor.

Banner filed a declaratory judgment action seeking a declaration that its liability under the temporary insurance application and agreement (“TIAA”) was limited to a refund of the premium submitted because the proposed insured made multiple material misrepresentations concerning his health in his life insurance application.  The defendant widow sought recovery of $1,000,000.00 in temporary insurance under the TIAA, arguing that since the proposed insured completed a TIAA during the application process, Banner could only seek rescission for any material misrepresentations that he made separately in the TIAA, not those made elsewhere in the more comprehensive medical history part of the application.

Affirming the district court’s ruling, the Fourth Circuit held that under the TIAA Banner could rely upon material misrepresentations that the proposed insured made in any part of the application, not just the TIAA, to limit its obligations to a premium refund; and that Banner had proved that the proposed insured’s  multiple misrepresentations concerning his medical history were indeed material because Banner ultimately decided to postpone issuance of any policy pending additional workup and a definitive diagnosis of the proposed insured’s elevated liver function tests.  The Court also denied the defendant widow’s requests for panel rehearing and rehearing en banc.


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