There is no duty upon a life insurance applicant to disclose information that has not been requested in a clear and unambiguous way in the insurance application form

Quinn v. Canada Life Assurance Co., [2005] B.C.J. No. 1947, British Columbia Supreme Court

On July 24, 2001, Ms. Quinn saw her family physician, Dr. Afridi. Dr. Afridi diagnosed a “productive cough” and sent her for a chest X-ray. Ms. Quinn attended at Dr. Afridi’s office on July 30, 2001, Dr. Afridi advised her that she had an enlarged heart and would have to get a chest X-ray every six months to monitor it. On May 27, 2002, Ms. Quinn had a follow-up chest X-ray which indicated that her heart was now within the upper limits of normal size. On August 23, 2002, Dr. Afridi obtained an ECG of Ms. Quinn’s heart. On October 3, 2002, Ms. Quinn applied for life insurance with Canada Life Assurance Company (“Canada Life”) and completed an application form. She was approved and began paying premiums. On December 8, 2003, Ms. Quinn died from cardiomyopathy. Shortly thereafter her estate made a claim for payment under her life insurance policy. After reviewing the clinical records, Canada Life declined payment and refunded the premiums paid by Ms. Quinn on the basis that there was incomplete disclosure of her medical condition.

Ms. Quinn’s estate commenced an action for payment of benefits under Ms. Quinn’s life insurance policy. In defending the claim, Canada Life argued that Ms. Quinn failed to provide material information. Amongst other things, Canada Life argued that Ms. Quinn inadequately responded to Question 6(c) and Question 8(c) on life insurance application form.

Question 6(c) reads “Have you ever been treated for or had any known indication of any disease or disorder of the heart or blood vessels — such as stroke, heart attack, chest pain, heart murmur, high blood pressure, palpitations, irregular pulse, rheumatic fever, or elevated cholesterol?” Ms. Quinn answered by putting a check mark in the box indicating yes and, in addition, she circled the words high blood pressure. Similarly, question 8(c) reads “Have you within the past five years had any lateral cardiogram, X-ray, blood or other diagnostic test?” Ms. Quinn answered by putting a check mark in the box indicating yes, in addition she circled the words electrocardiogram and blood. Each of these questions also had a space for details with a comment asking for dates, severity, duration, outcomes, names of physicians, hospitals and other medical facilities “of any condition noted above”. This column was left blank in question 6(c) and 8(c), and with a few minor exceptions, blank at a number of other questions scattered throughout the application form.

Silverman J. noted that the law clearly establishes that material facts must be disclosed by an Applicant, even if the Applicant believes that the fact may not be material and that the fact may not suggest a health risk. Materiality is a question of fact that is intrinsically connected with the concept of the duty to disclose. A fact is not material if there is no duty upon the Applicant to disclose it to the Insurer. Silverman J. determined that the questions that Canada Life asked in its application form were ambiguous. He noted the requirement for strictly interpreting ambiguous clauses in insurance contracts and determined that the answers to questions 6(c) and 8(c) provided by Ms. Quinn were responsive and did not require any further information than that provided. The additional information that Canada Life argued was material, was not material under the insurance contract because the information was not asked for in a clear and unambiguous manner on the application form.

In the result, the Insured’s estate was entitled to life insurance proceeds under the policy of insurance.

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