Tennessee Supreme Court Redefines Insurance Agent Liability

[Crabcake Johnny]

I read this on a LinkedIn group and was stunned. If I'm reading this right, the agents were held directly liable because the insured chose to omit information from the agent. Scary stuff indeed:

Tennessee Supreme Court Redefines the Law of Insurance Agent Liability : Tennessee Insurance Litigation Blog

"In Morrison, the basic facts were that Mr. and Mrs. Morrison obtained life insurance policies on each of their lives from their insurance agents, Roberts and Allen. The agents filled out the applications, and sent them to the Morrisons to sign with instructions on where to sign, which they did. Although the applications contained the typical warnings regarding misrepresentations and contained an affirmation that the statements therein had been read, neither of the Morrisons read the applications before signing them. Two months later, Mr. Morrison died. The insurance company then denied Ms. Morrison's claim for benefits under the policy, alleging misrepresentations in the application (failure to disclose a DWI). After filing suit, Ms. Morrison ultimately settled her claim with the insurance carrier for $900,000 ($100,000 less than policy limits), but proceeded to trial against the insurance agents, Roberts and Allen. After a bench trial, the trial court awarded a judgment to Ms. Morrison against the defendant agents for breach of contract and negligence and further found the defendants violated the Tennessee Consumer Protection Act."

 

[Newby]

You never know the whole story from news reporters. They may have replaced a non contestible policy with a contestible one with no disclosure or forms signed.

 

[LGilmore]

This is also something to think about when you fill out all the information on an application except for the signature. An tranier I had back in the day always had the client fill out the app. Simply because if this type of question came up, the client's handwriting would be all over the original document. Even if I transfer data to clean it up. I always keep the original. In case something like this were to happen.

 

[Norwayguy]

This is also something to think about when you fill out all the information on an application except for the signature. An tranier I had back in the day always had the client fill out the app. Simply because if this type of question came up, the client's handwriting would be all over the original document. Even if I transfer data to clean it up. I always keep the original. In case something like this were to happen.

Thats a good thought....Most of my clients would make a real mess of an app if I left it to them to fill out...

 

[DHK]

1. Never assume that clients read ANY disclosure statements.

2. If you're doing business by mail, fax, or phone, use an application procedure that warrants for such a method. For example, Ohio National has their "EasyApp" Term application. It can be used by fax, phone, internet, etc. When you use it, Ohio National then does a telephone interview and orders the paramed exam.

If you're using an application that's designed to be done in person, use it "in person"! Don't be a lazy agent!

 

[arnguy]

Thank God that ruling applies only to Tennessee!

 

[Newby]

And get replacement forms signed to cover your arse. I can't believe how many agents fail to get replacements forms signed. Those forms protect you not penalize you.

 

[GoCubsGo]

It may be that the agent withheld the DWI info and they could some how prove that. The agent might have thought he/she was off the hook once the applicant signed. This ruling says it ain't that simple.

 

[somarco]

Thank God that ruling applies only to Tennessee!

And some parts if Tennsylvania as well

 

[STIBROKER]

that's why all my clients fill out their own applications....and fax them in.....