Life insurance contract and irreversibility of permanent disability

 invalidez permanente

 

The requirement of “irreversibility” of permanent disability is a limiting clause in the life insurance contract and therefore, void if the requirements of the article are not met 3 LCS

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The requirement of irreversibility of permanent disability in life insurance can leave the insured in a situation of lack of coverage due to the regulation established by the General Law of Social Security..

The Supreme Court, in Case 23 June 2020, comes to clarify these situations, resolviendo que este tipo de cláusulas son “limiting” and therefore, solamente serán válidas si se cumple el requisito de la “double signature” Item 3 LCS.

For a limiting clause to be valid, it is required that, at the time of hiring,  the insured party is aware of the restrictions it introduces. Also, These clauses cannot empty the content of the contract itself, frustrate its economic purpose or deprive it of its cause.

The Civil Chamber of the Supreme Court gave judgment on 23 June 2020, with No Resolution 345/2020, estimating the appeal by Ms.. Embodies. He considered that the health questionnaire to which he was submitted by SEGUROS EL CORTE INGLÉS VIDA, PENSIONS AND REINSURANCE, S.A. (hereinafter SECIVPR, S.A.), it was ambiguous and indeterminate. Also, The clause that defined absolute permanent disability limited the rights of the insured party, for what was considered not put. Condemned SECIVPR, S.A., to pay 75.000 € to Dña. Embodies, plus legal interests of art. 20 LCS.

Fact background,,es,Juan Alberto and Paulina filed suit against FTA,,es,Asset Securitization Fund,,es,requesting the declaration of nullity for abusive of the floor and ceiling clauses contained in the novation contract of the mortgage loan of,,es,with the corresponding refund of amounts unduly collected,,es,The Securitization Fund Management Company,,es,Beech,,es,acting on behalf of FTA, he responded to said claim alleging that he lacked passive legitimacy since the entity had no legal personality and that it constituted only a private and open fund and that therefore the passive legitimization corresponded to BBVA as successor of Catalunya Banc that was the Company fund constituent,,es

The 13 November 2004, Ms.. Encarna and SECIVPR, S.A., signed a contrato de seguro de vida, where the guarantee of death and absolute permanent disability was established with an insured capital of 75.000 €.

The 25 February 2008, Ms.. Encarna received temporary disability leave due to depressive and eating disorders.

The 13 October 2009, The Provincial Directorate of the INSS issued a proposed opinion that was finalized on 21 October 2009, qualifying Mrs.. Incarnates in conditions of "permanently incapacitated in a degree of absolute", although it stated that there was a possibility of improvement, at least partial, in the medium term and that the resolution could be revised for aggravation or improvement. The 24 June 2010 the resolution was finalized. The 1 March 2011, a new opinion was issued, keeping the incapacidad permanente absoluta not having experienced improvement.

Ms.. Encarna filed a lawsuit 20 October 2016, requesting that SECIVPR be sentenced, S.A., payment of 75.000 €, plus legal interests of art. 20 LCS.

SECIVPR, S.A., alleged that Mrs.. Encarna hid her health when she took out life insurance, because he already suffered from the problems that later declared his disability, infringing art. 10 LCS. He also alleged that the INSS resolution was not final, it was reversible, and that in the general clauses of the policy, stipulated that "It is understood by Absolute Permanent Disability, the irreversible physical situation caused by accident or illness (…)”, so the insured risk had not actually occurred.

Primera Instancia

The Court of First Instance No. 4 de Móstoles sentenced the 5 May 2017, estimating the lawsuit filed by Ms.. Embodies. Condemned SECIVPR, S.A., to pay to Ms. Embodies, 75.000 €, plus legal interests of art. 20 LCS.

The Court upheld the claim because it was not submitted to Ms.. It embodies a health questionnaire where specific questions are asked, not being able to respond to the health circumstances that would have been relevant for the risk assessment.

Provincial Court

SECIVPR, S.A., interpuso recurso de apelación.

Section 10 of the Provincial Court of Madrid issued a judgment on 23 October 2017, estimating the appeal. It revoked the sentence handed down in the first instance and acquitted SECIVPR, S.A.

The Section considered that there was no resolution proving the irreversibility of his illness, so insurance coverage did not come into play.

Supreme Court

Ms.. Encarna filed an appeal. He alleged three reasons:

  • first plea: infringement art. 3 LCS for having introduced a general clause that is surprising and limiting of the rights of the insured.
  • second reason: infringement of the jurisprudential doctrine of the TS on limiting and limiting clauses in the insurance contract.
  • third plea: existence of contradictory jurisprudence of the Provincial Courts on irreversibility of absolute permanent disability.

The Chamber upheld the appeal. He analyzed the first two reasons together and, when estimating them, did not enter to assess the third reason.

Defining and limiting conditions of the insurance contract

To differentiate bounding and limiting conditions, the Chamber brought up several sentences, como las SSTS 661/2019, of 12 December and 541/2016, of 14 September, who expressed that "a delimiting condition defines the object of the contract, outlines the commitment assumed by the insurance company, so that, if the claim occurs outside said delimitation, positive or negatively explained in the contract, The obligation of the insurance company to take charge of your coverage is not born. The limiting clauses, On the contrary, play different role, insofar as the risk is produced, they act to restrict, condition or modify the insured's right to compensation.

(…)

the distinction between coverage delimitation clauses and limiting clauses It seems, at first sight, single, so that the first materialize the object of the contract and the risks set, if it occurs, give rise in the insured the right to benefit form the subject of insurance. While limitation clauses restrict, condition or modify the right of the insured to compensation or to the guaranteed benefit in the contract, once the object of the insurance risk has occurred”.

The STS 853/2006, of 11 September, established what a delimiting clause should specify, stating that “(…) delimiters are the provisions of those risks are intended to delimit the purpose of the contract, so that they materialize: (i) what risks are the object; (ii) to what extent; (iii) for how long; and (iv) in what temporal or spatial sphere. "

For his part, the STS 402/2015, of 14 July, expressed that the role of the limiting clauses lies "In restrict, condition or modify the insured's right to compensation, once the object of the insurance risk has occurred, (…) would be those that worsen the business situation of the insured. "

Ultimately, for the limiting clause to be valid, the insured party was required to have known the restrictions introduced by this type of clause, being reasonable and not emptying the content of the contract itself, neither frustrating its economic purpose nor depriving it of its cause.

In this particular case, the clause restricted coverage, violating the legitimate expectations of Ms.. Incarnates when hiring the insurance.

Duty to declare risk (art. 10 LCS)

The health questionnaire to which Dña was submitted. Encarna was too ambiguous and generic, indeterminate, Therefore, the Chamber did not consider the duty to declare the risk of art. 10 LCS.

Conclusion

The requirement of “irreversibility” de la invalidez permanente en un contrato de seguro de vida es una cláusula limitativa. To be valid, it is necessary for the insured party to know the restrictions that this type of clause introduces, without emptying the content of the contract itself, nor frustrate its economic purpose by depriving it of its cause.

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