Opinion ID: 1960830
Heading Depth: 1
Heading Rank: 1

Heading: certificate of insurance

Text: The Company [Stuyvesant] will issue to the Employer [Steiger] for delivery to each Insured Employee an individual certificate describing the benefits to which the Insured Employee is entitled under this policy and to whom payable and limitations and requirements of this policy pertaining to the Insured Employee and where this policy may be inspected. The question of whether or not Finstad received a Certificate of Insurance is relevant to a determination of whether or not he had knowledge, or reason to know, the existence of the insurance policy. We conclude that the question of whether or not Finstad received a Certificate of Insurance is a genuine issue of material fact for which Finstad is entitled to a hearing on the merits. Finstad asserts that the question of whether or not he received a Certificate of Insurance is relevant for yet another purpose. He alleges that, for the limited purpose of delivering the Certificates of Insurance to each insured employee, Steiger was acting as the agent of Stuyvesant. Therefore, asserts Finstad, Steiger's failure to deliver a Certificate of Insurance to him is imputed to Stuyvesant, as Steiger's principal, and constitutes a breach of the insurance contract which excuses Finstad's delay in providing written notice of claim to Stuyvesant. [2] Although a principal-agent relationship generally does not arise between the insurer and the employer when a group insurance policy is issued, Boseman v. Connecticut General Life Insurance Company, 301 U.S. 196, 57 S.Ct. 686, 81 L.Ed. 395 (1937); Sorenson v. Hartford Accident and Life Insurance Company, 585 P.2d 440 (Utah 1978), such a relationship may arise under the facts of a particular case. Elfstrom v. New York Life Insurance Company, 67 Cal.2d 503, 63 Cal.Rptr. 35, 432 P.2d 731 (1967). In Elfstrom, supra, the California Supreme Court held that the employer was acting as the agent of the insurer in undertaking certain responsibilities in administering a group insurance policy and that the employers' errors in administering the policy were attributable to the insurer. With regard to the principal-agent issue, the California Supreme Court stated: A substantial number of cases have considered the question of whether an employer acts as the agent of the insurer or of the employees in administering a policy of group insurance but their holdings are hopelessly in conflict. A number of decisions hold that an employer acts as the agent of its employees in administering the group policy. ( Boseman v. Connecticut General Life Insurance Co. (1937) 301 U.S. 196, 204-205, 57 S.Ct. 686, [690-91], 81 L.Ed. 1036; Metropolitan Life Ins. Co. v. Quilty (7th Cir. 1937) 92 F.2d 829, 832; Leach v. Metropolitan Life Ins. Co. (1927) 124 Kan. 584, 261 P. 603, 605-606; Equitable Life Assur. Soc. of U. S. v. Hall (1934) 253 Ky. 450, 69 S.W.2d 977, 978; Duval v. Metropolitan Life Ins. Co. (1927) 82 N.H. 543, 136 A. 400, 403-405, 50 A.L.R. 1276; Kloidt v. Metropolitan Life Ins. Co. (1939) 18 N.J.Misc. 661, 16 A.2d 274, 279; Hroblak v. Metropolitan Life Ins. Co. (Ohio App.1947) 79 N.E.2d 360, 364; McFadden v. Equitable Life Assur. Soc. (1945) 351 Pa. 570, 41 A.2d 624, 626.) The rationale of these case[s] appears to be that the employer is acting for its own benefit or for its employees in performing these tasks, rather than serving the purposes of the insurer, that the real insured is the employer acting for the employees as a group, that the employer and the employees are allied in their interests, and that these interests are adverse to the insurer. (See Borst, Group Policyholder as Agent of Insurer or Group Member, 14 Federation Ins. Co. Q. Winter 1963-64, p. 11; 1 Appleman, op. cit. supra, at p. 55). Other cases have reached a contrary conclusion. ( Clauson v. Prudential Insurance Co. of America (D.C.Mass.1961) 195 F.Supp. 72, 80; Piedmont Southern Life Insurance Co. v. Gunter (1963) 108 Ga. App. 236, 132 S.E.2d 527, 530; Neider v. Continental Assur. Co. (1948) 213 La. 621, 35 So.2d 237, 240-241, 2 A.L.R.2d 846; Baum v. Massachusetts Mutual Life Insurance Co. (Okl.1960) 357 P.2d 960, 964; Coker v. Aetna Life Ins. Co. (1938) 188 S.C. 472, 199 S.E. 694, 696-697.) The reasoning underlying these decisions is that the employer carries out the functions which the insurer necessarily would perform in other types of insurance and thereby confers a substantial benefit on the insurer, and that since the individual employee has no knowledge of or control over the administrative acts performed by the employer, it would be inequitable to charge him with the employer's errors. (Borst, op. cit. supra, at p. 11; 1 Appleman, op. cit. supra, at pp. 55-56.)