Opinion ID: 1693495
Heading Depth: 1
Heading Rank: 2

Heading: was plaintiff entitled to a peremptory instruction on the issue of actual damages?

Text: Plaintiff takes the position that the master policy was a secret policy and argues that the provisions under which defendant retained the right to cancel at its election were not binding on Kelley. Plaintiff relies on Seymore v. Greater Mississippi Life Insurance Company, 362 So.2d 611 (Miss. 1978) in support of her contention that the master policy in this case was a secret policy. Seymore was a case in which the authority of the insurer's agent was limited as to the amount of insurance the agent was permitted to write. Notwithstanding the limitation, the agent issued the policy in an amount which exceeded his authority. The insurance company did not plead as an affirmative defense that the master policy limited the agent's authority; consequently, we held the trial court erred when it denied recovery because the policy exceeded the agent's authority as to amount. The use of master policies, in cases of credit life insurance, is neither new nor unusual but is a procedure commonly used. In such cases the insured is given a certificate, as Kelley was in this case, referring him to the master policy for the terms and conditions of the insurance contract. The insured has the right to examine the master policy if he should desire to do so. He may not neglect or purposely omit acquainting himself with the terms and conditions of the insurance policy and then complain of his ignorance of them. We reject the secret policy argument as untenable. Defendant argues it had the absolute right under the terms of its master policy to cancel the certificate of insurance issued to Kelley within 90 days from the date of issue. Ordinarily, this defense would be upheld; however, in this case the onset of Kelley's fatal illness occurred after the policy was in effect and continued without remission until his death. Considerations of public policy persuade us that, exercise by the insurer of its right to cancel should not be permitted after the onset of a fatal illness and death therefrom, upon the ground of estoppel. In Volume 3A of Appleman's Insurance Law and Practice, ¶ 1813, the author states: And where the company has accepted the premium on a policy and the insured has relied on its protection, the company is estopped to cancel the policy after the insured has reached such a physical condition that he cannot obtain desirable insurance on his life in any reputable company. [ Mutual Benefit Life Ins. Co. v. Robison, C.A. Iowa 1893, 54 F. 580, 598]. We hold that, on the grounds of public policy, defendant was estopped from canceling the policy after the onset of Kelley's fatal illness. In so holding, we are not unmindful of the constitutional protection of the obligation of contracts afforded by Article 1 Section 10 of the United States Constitution. Allowing defendant to cancel the policy after Kelley became uninsurable would be unconscionable because Kelley had then reached such a physical condition that he was unable to obtain desirable insurance in any reputable company before his death. We conclude that the result reached by the trial judge, upon undisputed evidence, directing a verdict for plaintiff for the amount necessary to pay the balance of the loan, as actual damages, was correct and will be affirmed.