The Liverpool Standard and General Commercial Advertiser.
Liverpool, Merseyside, England, 1856-01-29 00:00:00

Ensurante tict

INDISPUTABILITY THE ONLY COMPLETE
SECURITY IN LIFE ASSURANCE. •
(Extracted from " The Register.")
What is meant by an indisputable policy? In the first place, it
is unlike other policies; the adjective being used to imply some-
thing to mark and distinguish such a policy from all other poli•
cies. In the second place, it means much more—it implies that
the policy to which the epithet "Indisputable" is given cannot
be disputed, except upon grounds beyond the reach and power of
the contracting parties to control. In other words, the policy is
represented as being as indisputable as man can make it.
Nothing can be more embarrassing than the situation of a man
who, after making payments to an Insurance Company for ten,
twelve, or twenty years, on the suppoettion that by such pay-
ments he has purchased for his family the absolute property in a
reversionary estate, is then told that at his death his survivors
may receive such property, but that there is a great chance—a pos-
sibility—amounting to a probability, that they may not; and that
the contingency depends upon circumstances winch he cannot
foresee. Yet such is the position of those who are held as wholly
responsible for the precise and literal accuracy of every statement
in numerous documents and schedules which precede the issuing
of a policy. Take one of these schedules as an instance of aver-
ments, upon the accuracy of each of which the whole value of
the policy will ultimately be made to depend :—" I do hereby
declare that my age does not exceed years; that 1 have had
cow-pox or small-pox (state which); that i have (or have not) had
the gout; that I have not been afflicted with any fit or fits, or
convulsions, nor with asthma, insanity, or spitting of blood ; and
that I am not afflicted with habitual cough, diseases of the lungs,
nor with any other disease or disorder tending to shorten life;
and that the foregoing proposal contains a true statement of
every matter and thing thereby required to be set forth ; and that
I am now in good health ; and 1 do declare that I have not con-
cealed or withheld any matter or circumstance touching my past
or present state of health, habits of life, or condition which may
render an insurance on my life more than usually hazardous, or
with which the Directors of this society ought to be made ac-
quainted; and that my private referees are well acquainted with,
and fully competent to give, the requisite information as to my
habits of life. And Ido declare that this declaration shall be the
basis of the contract between me and the said society; and that
if any true allegation or statement be contained in the said pro-
posal, or in this declaration, or if any material information be
omitted which ought to be contained therein,. all moneys which
shall have been or shall be paid to the said society, on account of
such insurance, shall be forfeited to the use of the said society,
and the policy be absolutely null and void."
Now, looking at the wording of this clause, it may be affirmed,
without much exaggeration, that there is no human being upon
earth who, looking on it as the literal condition of his contract
with a company, can possess a certainty that the event of his
death will place his family in possession of the sum specified in
the agreement. It is a professional notoriety that there are nu-
merous diseases which may be in active play long before their ex-
istence is suspected by the patient or any one eise. Yet, by the
contrivance of making the proposer warrant the literal accuracy
of numerous statements, the clause above quoted would vitiate
and nullify the policy, if it could be proved that the invisible foe
had commenced his ravages at the period when the instrument
was issued. The responsibility of the party effecting the assur-
ance is unconditiona', and wholly irrespective of the contingency
whether the "omission" of any fact, material or immaterial, were
wilful or not.
The person who makes the statement must not only declare
that he makes no wilful nais-statement—that he has not " with-
held any matter or circumstance," and observe, not deliberatelyor
of design, but that lie has not done so at all. The declaration re-
quired is absolute as to circumstances or possibilities beyond the
sphere of human knowledge; and the responsibily of the decla-
rant is equally absolute, no matter how innocently_ he may have
been led into error.
All the authorities are of the same opinion as to the sole and un-
divided responsibility of the assured. Thus, Lord'Eldon will not
hear of any distinction as to whether an omission has been ma-
terial or immaterial. " If material," his Lordship observes, "that
a materiality may be inquired into and shown ; but if there be a
warranty, it is part of the contract that the matter is such as it is
represented to be; therefore materiality or immateriality signifies
nothing. The only question is as to the mere fact.". This opinion
has been affirmed, to the total ruin of families, by numerous deci-
sions of the Courts.
It may perhaps be supposed that however close the net and
narrow the meshes which are entwined round the party whose
life is the subject of assurance—however minute and important
and liable to error are the facts, and yet stringent in construction
of law are the terms of the declaration lie is called upon to make,
yet that by great care he may be able to comply wills every de-
mand, and escape without a forfeiture of his policy. But that he
cannot do • for there is something yet taore demanded of him
before he 'becomes entitled to a policy—a requireuient in which
the greatest amount of care, and prudence, and scrupulous accu-
racy is of no avail. The proposer must give the names of medi-
cal attendants and two friends, each of whom returns answers
to a long list of questions, and the facts and statements so
received by the company, although the proposer is not made
acquainted with any one of them, are yet as much the subjects of
warranty as his own declaration, so that a wilful or innocent
error in answer to any of the questions put to these referees will
as effectually vitiate the policy as if had preceded from the
assured himself. We can make room for only one example of the
provisions just noticed, which we select from a large family of
similarcases, and from the practice of a highly respectable office,
Wilshere v. the Law Life. Wilshere resided near, London, and
on several occasions had consulted a London physician as to his
health, besides having the advice of a country gentleman. He
came to London to effect an assurance on his life, and, in answer
to the question, "Who is your ordinary medical attendant ?"
gave the name and address of the London physician, with whose
report and that of their own medical examiner, the director of
the company were satisfied. Some years after that Wilshere
died, and his executors were defeated in a claim against the com-
pany far the sum assured, merely, and upon no other ground,
because the name of the surgeon, and not that of the physician,
ought to have been inserted in the proposal. '
1n consequence of this state of matters, there arose in the public
mind a general feeling of insecurity in Life Assurance, which was
increased by the perusal of numerous cases occurring in the courts
of law and reported in the newspapers, most of them at the
instance of assured parties against Life Companies, but many of
them in which Life Companies were arrayed against each other.
The great desideratum was to make policies indisputable, so as
to remove all doubt, and dissipate every apprehension as to the
certainty of the sum assured being paid when it became due;
whereby the public generally would be benefited, and the business
of Life Assurance much extended.
" The Indisputable Life Policy Company" undertook this task,
and in order most effectually to make the policies they issued in-
disputable and certain documents of security, they inserted the
following clause in their Deed of Settlement, thereby creating
an effective and legal obligation, imperative upon the Company to
fulfil, and which it is the right of every assured member to plead
and insist upon:—
Clause 84. "That every Policy issued by the Company shall be
indefensible and indisputable, .and the fact of issuing the same
shall be conclusive evidence of the validity of the Policy; and it
shall not be lawful for the Company to delay payment of the
money assured thereby on the ground of any error, mistake, or
omission, however important, made by or on the part of the per-
son or persons effecting such Assurance; and that. on the con-
, trary, the amount so assured shall be paid at the time stipulated
by the Polley, as if no steels error, mistake, or omission, ,=tad been
made or discovered."
We have said that the above clause forms a part of the Deed of
Settlement of the Company, and that deed being registered in
terms of the Act 7 and 8 Vict. c. 110. there is nothing wanting to
give it the fullest effect. It is not merely to be found in a pro-
spectus or other circular, which may or may not be obligatory on
the Company, according to circumstances, but it forms a com-
ponent part of the existence of the corporate body. A mere pro-
mise of indisputability is not enough. Such a clause as the above
is required to give legal efficacy. It appears to have been care-
fatly and anxiously prepared, far the purpose of cutting off
every grouad and pretext of dispute as to the validity of the
Policy; and we confess that we cannot find any words or series
of sentences more operative, effective, or compulsory for that
purpose. In order the more effectually to show this, we
would invite onr readers to compare this clause with the
law as laid down by Sergeant Marshall in the passages
already quoted from that learned authority. The indis-
putable clause says—" Every policy issued by the Company shall
be indefeasible and indisputable, and the fact of issuing the same
shall be conclusive evidence of the' validity of the policy." Mr.
Sergeant Marshall, speaking of the clause ordinarily inserted in
policies, says, "It is quite immaterial for what purpose or with
what view it [a warrant] is made ; but being once inserted in the
policy, it becomes a binding condition on the assured, and unless
he can show that it has been complied with, he can derive no
benefit from the policy." In other words, an indisputable policy,
when once issued, declares that, de facto, all precedent questions
are held to have been finally settled, whereas an ordinary policy
declares on the face of it that the Directors retain the power to
keep all these questions open to dispute, until they have actually
paid the amount of the policy to the executors. Again, the indis-
putable clause says, " It shall not be lawful for the Company to
delay payment of the money assured, on the ground of any error,
mistake, or omission, however important, made by or on the part
of the person or persons effecting such insurance." Mr. Sergeant
Marshall, on the other hand, says, "The very meaning of a war-
ranty is to preclude all question whether it has been substantially
complied with or not. Whether the thing warranted was material
or not, whether the breach of it proceeded from fraud, negligence,
mis-information, or any other cause, the consequence is the same
—i.e, the policy is void." In the next place, the indisputable
clause says that, "on the contrary, the amount so-assured shall
be paid at the time stipulated by the policy, as if no such error,
mistake, or omission, had been made or discovered." Mr. Ser-
geant Marshall says, "The warranty makes the contract hypo-
thetical ; that is, it shall be binding if the warranty is complied
with. The only question is, has the thing warranted taken place
or not? If not, the assurer is not answerable for any loss, even
though it did not happen in consequence of the breach of the war-
ranty." Can anything be more conclusive than this in proof of
the superiority of the Indisputable Policy? The Indisputable
Policy settles all precedent questions—an ordinary policy leaves
them all unsettled. An Indisputable Policy declares, by the mere
fact of its issue, that all questions relating to the health, habits,
age, &c., of the assured are, as far as the Company is concerned,
set at rest for ever—an ordinary 'policy leaves these points
open to dispute, until the claim has actually been discharged.
London Indisputable Life Policy Company, 72, Lombard-street.
—Manager, ALEXANDER ROBERTSON.

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