Coverage Under Policy Deemed to Commence when Policy Delivered to Insured

15. January 2015 0

Coverage under a life insurance policy was found to take effect as of the date the policy was delivered to the deceased insured, and not on the date the deceased insured completed administrative forms accompanying the delivered policy. The failure to advise the insurer of an impending medical test on those administrative forms did not constitute a material misrepresentation.

Craig v. Empire Life Insurance Co., [2014] O.J. No. 5577, November 13, 2014, Ontario Superior Court of Justice, J.R. McCarthy J.

The insured was the beneficiary under a life insurance policy and sought a determination as to whether the policy was in effect at the time of her deceased husband’s passing. The deceased applied for insurance on December 7 and disclosed that he was scheduled for a colonoscopy on December 16. On December 10 the insurer sent the deceased for a para-medical exam. On December 19 the insurer requested that it be provided with the results of the colonoscopy. The insurer received the colonoscopy results on January 5. On January 10 the insurer issued the policy to the deceased and cashed the first premium cheque.

The insurer sent the policy to the deceased with a cover letter, policy delivery receipt, Residual Notice (the “Notice”) and Application Change Form (the “ACF”). The deceased received the policy on January 14. The Notice indicated that the policy issue date was January 10 and stated that any changes made on the ACF must be approved by the insurer’s underwriters before policy delivery could take effect. The ACF asked the deceased to confirm that there had been no changes to his health and that the results of the December 16 colonoscopy were normal. The deceased executed the delivery receipt and the ACF on January 22. However, on January 17 the deceased underwent a routine annual physical and was referred for a pulmonary function test (“PFT”). The PFT was administered on February 1 with inconclusive results. The deceased suffered a fatal heart attack on March 19. The insurer sought to void the policy by returning the premium and arguing that the deceased’s failure to advise of the PFT on the ACF was a material misrepresentation.

The court stated that the case turned largely, if not entirely, on whether and when the policy was delivered for the purposes of s.180(1) of the Insurance Act, R.S.O. 1990, c. I.8. The issue under the statute and the mirrored policy provisions was with respect to changes in insurability between the completion of the application and delivery of the policy. The court found as a fact that the policy was delivered to the deceased on January 14. Moreover, the insurer considered itself bound to coverage on January 10, which the cover letter, receipt, Notice and ACF, when read together, confirmed. Ultimately, the court found that coverage was in effect as of delivery on January 14 and that the deceased had made no misrepresentations on what were purely administrative forms accompanying policy.

This case was digested by Michael J. Robinson and edited by David W. Pilley of Harper Grey LLP. If you would like to discuss this case further, please feel free to contact them directly at or or review their biographies at

To stay current with the new case law and emerging legal issues in this area, subscribe here.