Insurance company must pay on critical illness policy

Coleman -v- New Ireland Assurance PLC trading as Bank of Ireland Life

Coleman -v- New Ireland Assurance PLC trading as Bank of Ireland Life

High Court

Judgment was given on June 12th, 2009, by Mr Justice Clarke

Judgment

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A woman who developed MS was entitled to receive €95,230 from the insurance company, Bank of Ireland Life, with whom she had taken out a critical illness policy. The insurance company failed to show that she was guilty of any material non-disclosure of a relevant fact.

Background

Ms Coleman was born in December 1972. In the late 1990s she took out life assurance as a condition of obtaining a mortgage to buy a house.

Following discussions with the representative of the life assurance company, she agreed to take out a “living cover” policy, which would pay her the sum of £60,000, later increased by Ms Coleman to £75,000 (€95,231), in the event of her developing one of a number of illnesses, including multiple sclerosis (MS).

The proposal form was filled out by the representative, who asked Ms Coleman a number of questions regarding her health, which she answered.

The questions included the name and address of her doctor, and the dates and reasons for any visits she had made, including the results of any check-ups, and whether she had seen any other doctor or specialist. She replied that she had attended for colds and flu and had not seen any other doctors.

Eight years previously, when aged 19 and training to be a nurse, Ms Coleman had experienced problems with her eyesight and had visited her GP. He was concerned that this might be indicative of MS, but did not tell her this as he was worried about the effect of such concerns.

He suggested she go for tests, and she did so, staying in the nursing accommodation. She was given some drops for her eyes and the symptoms cleared up.

While at the hospital she also underwent a lumbar puncture and a scan. The doctors concerned suspected she might be suffering from MS, but did not tell her, and she was told the scan was normal, which it was.

Although she was unaware when she filled in the proposal form that she was suspected by her doctors of suffering from MS, the insurance company relied on the fact that she had not disclosed these visits and tests to say she could not now claim.

She said that at the time when she gave answers to fill in the form she had put this incident eight years previously completely out of her mind.

Referring to the case-law, Mr Justice Clarke said that a party can only be subject to having his or her insurance policy voided by an insurance company if there is a failure to disclose a material fact of which the proposer was aware. In this case the form signed by the proposer declared that the information contained was true “to the best of my knowledge”.

The question of non-disclosure therefore had to be judged by reference to the knowledge of the proposer.

It was true that Ms Coleman’s answers to at least two of the questions were inaccurate. But these events concerning her visit to her GP and the hospital tests occurred while she was still a teenager. At the time she was told she suffered from “optic neuritis” which she knew was an inflammation of the eye.

The consultant neurologist did not inform her that there was a high likelihood of her developing MS, though in a letter to her GP, not seen by her, had said there was a possibility of future neurological symptoms.

Mr Justice Clarke said that, in the circumstances, he was satisfied that she was not told there was any ongoing risk other than that the symptoms might recur. Up to the time she filled in the form they had not told her.

He said he was therefore satisfied as a matter of fact that she had put the entire incident out of her mind. As of the date on the proposal, she answered the questions truthfully and to the best of her knowledge as it then was.

Accordingly, he was not satisfied that she was guilty of any material non-disclosure of a fact that she knew at the relevant time or failed to answer any question truthfully, or was in breach of any warranty of condition, and she was entitled to succeed for recovery of €95,230, which fell due to be paid by June 30th, 2004. Courts Act interest on the sum from July 1st, 2004 should therefore also be paid.

The full judgment is on www.courts.ie

James O’Mahony SC, Dr John O’Mahony SC and Harold Brooks BL, instructed by Brooks Co, Mitchelstown, for the plaintiff; David Kennedy SC and John F Brennan BL, instructed by Franklin O’Sullivan, for the respondents