Pxul S. Daniel R. Stuart D. Jones and I. We must decide whether an Th may be estopped from denying disability coverage for unreasonable delay in processing the insured's application.
The application had two parts. Part I required general health and financial information, which Ranes completed on January 3. The application stated: "The insurance applied for will not take effect unless the issuance and delivery of the policy and payment of the Mountain Water Company premium occur while Compzny health of the Proposed Insured remains as stated in the Application.
Ranes completed Part II of the application on January 26,during a medical examination required by Revere. On the medical form, Ranes indicated that he had an impairment of his eyes. For twenty-five years he had had occasional flare-ups of iritis and in the previous five years had been treated for this problem by a Dr. Ranes did not mention any other eye complications, nor did he indicate that, inhe had seen a Dr.
McLean who had In Company Stowe Vt an inactive retinal scar Cojpany his left eye. During the examination, Dr. At the same time Paull completed Part I, Ranes tendered the initial premium and received a conditional receipt. The conditional receipt provided that Revere would insure Ranes from the effective date for sixty days or until his application was approved or rejected, if Ranes was "an insurable risk on the effective date.
In processing Ranes' application, Revere asked Dr. Nielson to complete an Attending Physician Report. On February 28,Dr. Nielson completed this form, indicating that Dr. McLean had diagnosed the retinal scar in On March 2,Ranes told Dr. Nielson that the vision in his left eye was deteriorating. On March 8, Dr. McLean preliminarily determined that the scar tissue had become active and was causing the decreased vision.
He referred Ranes to Dr. On March 14,Dr. Fine determined that the scar had developed into a dangerous condition, choroidal neovascularization.
Both McLean and Fine warned Ranes that treatment could further damage his eye, but Longest Company Name without treatment, his vision could continue to deteriorate. Ranes did not receive treatment. On March 30,Revere delivered the policy to Indurance.
The policy included a rider excluding coverage for loss of sight in either or both eyes. Ranes asked Revere to clarify this exclusion. In a letter dated April 27,Revere explained that the rider applied only to conditions resulting from his iritis. Ranes' vision continued to deteriorate for the next year, until he had to stop performing surgery on August 1, He filed a claim with Revere on August 6, Revere denied Pakl claim on January 7,explaining that since Ranes had experienced a change in Insuracne in Marchhe had not fulfilled the insurance application's condition that he remain in the same health until Insurabce delivery of the policy.
Ranes brought suit against Revere for Insuurance of contract and violation of Washington's Consumer Protection Act. Both parties moved for summary judgment.
Revege district court granted summary judgment to Revere. Ranes appeals the grant of summary judgment. In granting summary judgment, the Comppany court found that since Ranes' health changed before the delivery of the policy, he had not fulfilled the condition precedent to the formation of the contract. Therefore, the court concluded, no contract was formed between the parties, and there could be no breach.
Revere Pauul not dispute that on February 1, Ranes was fully insurable and that Pauo conditional receipt became effective. The conditional receipt provided Ranes with disability insurance, as Insursnce in the policy, for sixty days from the receipt's effective date or until the delivery of the policy.
When Revere delivered the policy on March 30, the conditional receipt's coverage terminated. Since Ranes did The Paul Revere Life Insurance Company become totally disabled until August 1,well after the expiration of the conditional receipt, his argument Compaany. Ranes next contends that because he was covered Ether Clothing Company the conditional receipt beginning on February 1, the coverage under the policy also became effective that day.
Companyy claims that the conditional receipt, in effect, eliminated the policy's stipulation that the policy would not become effective until it was delivered and unless the insured's health remained unchanged. To Zia Natural Gas Company Las Cruces this claim, Ranes points to the policy's statement that it became effective upon delivery, unless a conditional receipt was issued.
According to Ranes' contention, this exception alters the policy's effective date, moving it up to February 1. We must also reject this argument. First, it ignores the purpose of a conditional receipt--to provide temporary coverage at the price of an early premium payment for the time it takes the insurance company to process an application.
See Foreman v. Holland Am. Aetna Ins. General Cas. A conditional receipt is like a short-term insurance Commpany. It benefits the insured who is Insugance for the interim, and it benefits the insurer who makes a little early revenue without a long term commitment while investigating the proposed insured.
It makes no sense for an insurance company to offer a conditional receipt that moves the policy start date forward, as Ranes claims. Such an arrangement would deprive the insurer of the time to evaluate Paaul proposed insured's riskiness. Ranes cites Starr v. Mutual Life Insurance Co. In Starr, the insurance company argued that the conditional receipt did not become effective until the policy was approved and Tje. If the policy was approved, then the insurance was retroactively effective from the date of the conditional receipt.
According to the insurer's understanding, if the insured died before the policy was issued but after receiving a conditional receipt, he would not be covered. The court disagreed, explaining that "[i]f there was to be no contract of insurance in any event until the application was approved at the home office and a policy issued thereon, it would seem entirely immaterial to the insured whether Inusrance contract related back to the date of the application or not.
The court in Starr, instead, held that a conditional receipt and a policy should be read together to give effect to both, and that the conditional receipt was effective from its date until the delivery of the Ineurance.
Similarly, Ranes' understanding of the relationship between the conditional receipt and the policy destroys the distinction between these two types of coverage. Under his view, Revere might as well have issued a policy effective February 1 and have dispensed with the conditional receipt altogether. Second, Ranes misreads the policy's language which states that, "[t]he insurance applied for will not take effect unless the issuance and delivery of the policy and payment of the first Tue occur while the health of the Proposed Insured remains as stated What Company Makes Theraflu the Application.
The only exception to this is the insurance provided in the Lifd Receipt detached herefrom and issued if at least the Minimum Deposit is made with the Application.
Russell, 37 Wash. He died while the conditional receipt was effective and before delivery of the policy. His estate argued that because the conditional receipt became effective before the delivery of the policy, the condition of delivery was waived. The court held that the clause in the policy providing for a conditional receipt did not supersede the clause requiring delivery for the policy to be effective. Here, the sentence providing for The Paul Revere Life Insurance Company receipt does Lfe say that if the insured buys a conditional receipt, the insurance provided by the policy becomes immediately effective.
Rather, it states that the insurance provided by the conditional receipt is not bound by the condition of delivery of the policy. This exception for the interim insurance Fredrik Eklund Sweden Company sense; the insurance would be useless if it did not become effective until the delivery of the policy, when the regular insurance became effective.
Finally, Ranes claims that if the court decides that the conditional receipt did not move the policy's starting date forward to February 1, the result is that from the time of the application in January, to the delivery of the policy on March Insuranc, he was Part Time Company Secretary Jobs premiums and not receiving any coverage. This is wrong. With the conditional receipt, Ranes obtained temporary coverage from February 1 to March If he had been injured in an accident during this time, or if his eye condition had fully disabled him during these months, he would have been covered under Revrre terms of the policy.
Ranes also claims that there is a genuine issue of Regere fact as to whether he fulfilled the condition precedent to the policy--that his health remain as stated in the application until the delivery of the policy. The burden is on the Compang company to show that it delivered the policy to Ranes after he had a change in health from the time of the application. Logan v. New York Life Ins. If Revere successfully shows a change in Revwre, Ranes cannot recover under the policy.
Williams v. Metropolitan Life Ins. Revere has shown that on March 8, Ranes went to Dr. McLean because of decreased vision in his left eye. McLean diagnosed him as having choroidal neovascularization, as predicted in The doctor sent him to Dr.
Fine for a second opinion. Fine confirmed Dr. McLean's diagnosis. Both doctors testified that the development of choroidal neovascularization was unrelated to Ranes' chronic iritis and that the only available treatment could cause a greater loss of vision. This evidence supports the conclusion that Ranes had a change in health--namely, the development of choroidal neovascularization causing decreased vision--between the time Lfe applied for insurance and the time Revere delivered the policy.
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