Opinion ID: 1959351
Heading Depth: 2
Heading Rank: 2

Heading: Did American Fidelity and IMMS deliver the insurance policy to Foodservice within a reasonable time?

Text: An insurer must deliver a copy of the insurance policy to the insured within a reasonable time after the policy has been issued. Ala.Code 1975, § 27-14-19(a). Section 27-14-19 states, in pertinent part: (a) Subject to the insurer's requirements as to payment of premium, every policy shall be mailed or delivered to the insured or to the person entitled thereto within a reasonable period of time after its issuance, except where a condition required by the insurer has not been met by the insured. In Brown Machine Works & Supply v. Insurance Company of North America, 659 So.2d 51, 58 (Ala.1995), this Court held that when an insurance company fails to comply with Section 27-14-19, and that failure to comply has prejudiced the insured, the insurance company is estopped from enforcing an exclusion in the policy. Foodservice argues that American Fidelity and IMMS did not deliver the policy to it in a reasonable time and, thus, that they should be estopped from enforcing the arbitration provision. [5] However, Foodservice's argument is misplaced; American Fidelity and IMMS complied with all statutory requirements. American Fidelity and IMMS were required to deliver the policy to Foodservice within a reasonable time after it was issued. See Ala.Code 1975, § 27-14-19. Even though the reinsurance policy became effective on July 1, 1999, it was not issued until December 6, 1999, at which time it was delivered to GRI. The reason for the delay between the effective date and the issuance date was that all condition[s] required by the insurer [had] not been met by the insured. Ala.Code 1975, § 27-14-19. At the time Foodservice applied for the reinsurance policy, IMMS advised GRI that American Fidelity could not issue the policy until it received the signed application, an updated list of paid claims, and a disclosure form. This request was repeated five more times between mid-June and October 1999, at which time GRI and Foodservice finally complied. On October 4, 1999, after it had received all of the required information, IMMS renegotiated certain provisions of the policy with GRI. The agreement was confirmed in writing on November 29, 1999. The reinsurance policy was sent to GRI seven days later. Therefore, the policy was delivered to GRI in a reasonable time. Additionally, Foodservice argues that there was a 50-day delay from the time the policy was delivered to GRI until Foodservice received it. However, GRI was Foodservice's agent. In the application for reinsurance, Foodservice identified GRI as its agent for purposes of the REINSURANCE AGREEMENT and the applied for insurance coverage. (Capitalization in original.) Foodservice agreed not to hold American Fidelity or IMMS liable for any negligence, error, omission or defalcation committed by GRI. Moreover, the policy states that notice to GRI is notice to Foodservice. Therefore, IMMS and American Fidelity are not responsible for any unreasonable delay between the time they delivered the policy to GRI and the time Foodservice finally received it. American Fidelity and IMMS fully complied with Ala.Code 1975, § 27-14-19. The trial court did not err in granting IMMS and American Fidelity's motion to compel arbitration, and its order compelling arbitration as to those parties is affirmed. AFFIRMED. SEE, LYONS, BROWN, JOHNSTONE, HARWOOD, WOODALL, and STUART, JJ., concur. MOORE, C.J., dissents.