This page is part of the overview of international insurance case law. It collects 10 decisions of foreign courts on this topic, in chronological order, with a short synthesis. Foreign decisions are not binding in Estonia. Citation conventions and links are explained on the overview page.
Synthesis
These judgments deal with the ordinary meaning of terms from the average policyholder's perspective (accident, illness, other insurance), beneficiaries' rights and the consequences of unpaid premiums (Gibbens, Sabean, BGH IV ZR 533/15, Discovery Life). On insurable interest, Canada has abandoned the strict legal interest requirement in favour of a factual expectation test (Kosmopoulos), while Indian and German courts protect the persons for whose benefit insurance was actually taken out (Canara Bank, BGH IV ZR 4/19). In Estonian law see VÕS § 424 (insured person and insured object), §§ 463 to 465 (insurance for the benefit of a third party), § 478 (lack of insurable interest) and §§ 457 and 458 (late payment of premiums).
Decisions
Kosmopoulos v. Constitution Insurance Co., [1987] 1 S.C.R. 2
Supreme Court of Canada, 29.01.1987 · Canada · paras 19-21, 26, 29-30 · insurable interest; sole shareholder; factual expectation; Macaura
A company's sole shareholder had insured the company's property in his own name, and the insurer argued that he had no insurable interest in it. The Supreme Court of Canada did not lift the corporate veil but reviewed the two approaches in Lucena v Craufurd (paras 19-21) and questioned the strict legal interest requirement in Macaura (paras 26, 29); it held that the sole shareholder had an insurable interest based on factual expectation, since he would in fact suffer loss from the destruction of the property. The appeal and cross-appeal were dismissed. Relevance: VÕS § 478 on lack of insurable interest and the concept of interest in indemnity insurance.
Text of the decision: decisions.scc-csc.ca
Oldfield v. Transamerica Life Insurance Co. of Canada, 2002 SCC 22
Supreme Court of Canada, 08.03.2002 · Canada · paras 3, 69 · life insurance; beneficiary; public policy; death while committing a crime
The insured died accidentally while smuggling drugs inside his body, and the insurer refused to pay the beneficiary on public policy grounds. The Supreme Court of Canada held that it is not contrary to public policy for an innocent beneficiary to receive the proceeds: the beneficiary claims in her own right, not through the estate of the insured who committed the crime (para 3), and the Ontario Insurance Act contains no broader bar. The appeal was dismissed (para 69). Relevance: the beneficiary's independent right (VÕS §§ 463 to 465) and the scope of intent exclusions.
Text of the decision: decisions.scc-csc.ca
Co-operators Life Insurance Co. v. Gibbens, 2009 SCC 59
Supreme Court of Canada, 18.12.2009 · Canada · paras 2, 16, 18-21, 29 · accident insurance; meaning of accident; disease; ordinary meaning
The insured became paralysed by inflammation of the spinal cord following a sexually transmitted disease and claimed under accident insurance. The Supreme Court of Canada held that 'accident' is an ordinary word to be understood as an average applicant would understand it; a bodily infirmity caused by disease in the ordinary course is not an accident, and accident insurance is not comprehensive health insurance (paras 2, 16, 19-21). The separate critical illness cover did not include the condition (para 19); the appeal was allowed and there was no cover. Relevance: distinguishing accident and illness in personal insurance.
Text of the decision: decisions.scc-csc.ca
Cragg v. Allstate Indemnity Corp., 17 N.Y.3d 118 (2011)
New York Court of Appeals, 09.06.2011 · United States, New York · homeowner's policy; exclusion for bodily injury to an insured; 'any benefit'; non-insured claimant
The insureds' grandchild drowned in their pool, and the child's father, who was not insured under the policy, brought a wrongful death claim against the grandparents. The policy excluded bodily injury to an insured where an insured would receive any benefit from the policy. The New York Court of Appeals held that the exclusion did not bar coverage of the non-insured father's claim and reversed the Appellate Division. Relevance: exclusions for claims between family members in liability cover and defining the circle of insured persons.
Text of the decision: law.justia.com (reprint)
Sabean v. Portage La Prairie Mutual Insurance Co., 2017 SCC 7
Supreme Court of Canada, 27.01.2017 · Canada · paras 5, 39, 44 · underinsured motorist endorsement; deduction of other insurance; public pension; ordinary meaning
An insured injured in a road accident claimed under an underinsured motorist endorsement, and the insurer sought to deduct future public disability pension benefits as benefits under a 'policy of insurance'. The Supreme Court of Canada held that an average policyholder understands an insurance policy as an optional private contract, not a statutory scheme; future public pension benefits are not deductible, and the insurer cannot rely on specialised case law (paras 5, 39, 44). The appeal was allowed. Relevance: interpreting terms on the deduction of other benefits under VÕS § 39.
Text of the decision: decisions.scc-csc.ca
BGH 29.03.2017, IV ZR 533/15
Federal Court of Justice (BGH), IV Civil Senate, 29.03.2017 · Germany · headnote 1; Rn 10, 14-17, 22-26, 31 · private health insurance; concept of illness; myopia; laser eye surgery; glasses as aids
The insured had laser surgery for myopia, and the insurer refused to pay because similar vision is common at that age and glasses could be worn. The BGH held that, from the average policyholder's perspective, an illness is an objectively abnormal bodily condition according to medical assessment, regardless of its frequency in the age group (Rn 10, 14-17); glasses and contact lenses are aids, not treatment, and the insured cannot be referred to them (Rn 22-26). The case was remanded to assess medical necessity (Rn 31). Relevance: the concepts of illness and treatment costs in health insurance terms.
Decision details and text: dejure.org
Canara Bank v. United India Insurance Co. Ltd., [2020] 7 S.C.R. 498
Supreme Court of India, 06.02.2020 · India · paras 28, 36, 44, 49, 55, 57 · fire insurance; cold store; third-party goods; beneficiaries; bank clause
Farmers stored produce in a cold store which, under a tripartite agreement, had to insure the stock at the farmers' cost; the building burned down and the insurer assumed that all the goods belonged to the store. The Supreme Court of India held that the farmers were beneficiaries and consumers of the insurance although not parties to it (paras 28, 44), and that, given the bank clause in the policy, the insurer could not presume that all the goods belonged to the cold store (para 36). The insurer had to pay the value of the warehouse receipts with interest; the bank's dues were paid first and the balance went to the farmers (paras 49, 55, 57). Relevance: insurance for the benefit of third parties (VÕS §§ 463 to 465).
Text of the decision: api.sci.gov.in
BGH 15.07.2020, IV ZR 4/19
Federal Court of Justice (BGH), IV Civil Senate, 15.07.2020 · Germany · Rn 16-35 · occupational disability insurance; insurance for the account of another; insured person; beneficiary
A father took out occupational disability insurance with his minor daughter as the insured person, and it was later disputed to whom the benefits belonged. The BGH held that this was insurance for the account of another protecting the daughter's earning capacity, so the benefits belong to her and the father holds them for her (Rn 16-30); where the insured person is merely the person at risk without rights of her own, the policy is the policyholder's own insurance (Rn 18-19). A beneficiary designation cannot be revoked after the insured event (Rn 31-33). The case was remanded (Rn 35). Relevance: VÕS § 424 and §§ 463 to 465.
Decision details and text: dejure.org
Discovery Life Ltd v Hogan [2021] ZASCA 79
Supreme Court of Appeal of South Africa, 11.06.2021 · South Africa · paras 14, 19-20, 22 · life insurance; unpaid premium; grace period; repudiation by the policyholder
The policyholder instructed his bank to stop paying premiums, intending to abandon the policy, and died soon afterwards; the beneficiaries relied on the 30-day grace period. The Supreme Court of Appeal held that the grace period term does not operate where non-payment results from the policyholder's own repudiation (paras 14, 19-20), and the insurer was not obliged to grant a grace period. The appeal was upheld and the high court's order set aside (para 22). Relevance: late payment of subsequent premiums under VÕS § 458 and termination.
Text of the decision: saflii.org
BGH 10.07.2024, IV ZR 129/23
Federal Court of Justice (BGH), IV Civil Senate, 10.07.2024 · Germany · Rn 12, 14-20, 23-26 · travel health insurance; pre-existing condition exclusion; transparency; subsidiarity clauses; multiple insurance
Medical costs of an insured who fell ill abroad were covered by two policies, each with a subsidiarity clause, and one insurer also relied on a pre-existing condition exclusion. The BGH held that equivalent subsidiarity clauses cancel each other out, so the multiple insurance rule in § 78 VVG applies (Rn 12), and that the exclusion for a 'previously known medical condition' was not transparent and was void (§ 307(1), second sentence, BGB; Rn 14-20). Service provider fees are not recoverable under § 78 (Rn 25); the judgment was set aside and remanded (Rn 26). Relevance: VÕS §§ 486 and 487 and transparency of exclusions (VÕS § 42).