Application As Part Of The Policy

Fort Worth life insurance lawyers can tell you that a policy of life insurance must have attached to it, a copy of the application. Texas Insurance Code, Section 705.103 clearly states:
Except as otherwise provided by this code, a life insurance policy must be accompanied by a copy of:
(1) the policy application; and (2) any questions and answers given in connection with the application.

This is further reinforced by a 1994, Texas Supreme Court case styled, Fredonia State Bank, Executor of the Estate of Claytor Blake, III, et al. v. General American Life Insurance Company.
The lawsuit was brought by Fredonia against American for policy benefits.
The barring of a misrepresentation defense because of the insurer’s failure to attach an application can be likened to an affirmative defense, which operates, not to rebut or deny a factual allegation, but “to open the way … to adduce evidence establishing an independent reason” to defeat an asserted claim or defense. As a general rule, the burden of proving an affirmative defense rests upon the party asserting it. The burden of proof of establishing an insurer’s failure to attach an application to an insurance policy to preclude the assertion of the affirmative defense of misrepresentation should be borne by the party who would avoid consideration of the defensive claim of misrepresentation–here, Fredonia.
There was no direct evidence regarding whether the copies of the applications were missing at the time that the policies were delivered to Blake. Wier’s testimony was that he did not know, and would not have known, of the actual contents and enclosures of the policies when they were delivered to Blake. Though Wier testified in his deposition that “the medical portion of the application” was not with the policy when delivered, he went on to clarify that, by “the medical portion,” he meant not the application at issue here but a separate document not relevant to this controversy.
As to Claims Director Kasalko, he testified, in the cited record references, that General’s practice was that after mailing a copy of the application and policy to a new policyholder, the company would retain only a microfilm copy of the application and destroy the original application. The copy of the application admitted into evidence here was indisputably not a copy of a microfilm record. A sample of a copy from microfilm and a sample of a non-microfilm copy demonstrated the distinction between these two types of copies. Kasalko then testified that a non-microfilm copy of the application was in General’s possession after Fredonia returned the policy to General. Since General did not retain any but microfilm copies, he explained that such non-microfilm documents must have been the copies of the applications that were originally attached to Blake’s insurance policies and returned to General after Blake’s death. As the fact-finder, the jury was not required to believe Kasalko’s description of General’s policy in handling applications or that it was followed with reference to these policies.
Here, the only evidence that the copies of the application were not attached was Sandra Blake’s testimony that a copy of the application was not attached to a copy of one of the policies in Fredonia’s possession after Fredonia had returned the documents it received from Blake to General. There was no competent evidence of who made the copy that Sandra Blake saw, or whether it was identical to the policy that was surrendered to General. The Court held that this evidence, considering evidence both for and against the fact finding under our standard of review, was so weak or insufficient that the jury finding is manifestly unjust. The case was remanded to the trial court for a new trial.

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