Insurance, Misrepresentation, Causation, and Statutory Rescission

Abstract

Focused on Arkansas insurance law, with applicability to other state's misrepresentation analysis, this article treats one state's law of misrepresentation in the application for life or health insurance policies. It traces the development of the law from common law origins and through two statutory revisions and related case law. It illustrates problems of legal analysis and synthesis and provides a good model for a student note or comment in a law review or law journal.

The article also works to clarify ambiguity in the law of representation and warranty in the insurance context. The analysis is relevant to an understanding of how pre-existing medical conditions both affect an applicant's insurability and the carrier's and policy holder's litigation positions in the event the carrier denies a claim for benefits on the grounds of misrepresentation. Health insurance applications, and the incentives that exist to answer medical history questions with answers that provide a health insurance misrepresentation, are the underlying types of case facts that are present in this synthesis.

Keywords: Arkansas insurance law, Insurance, Health Insurance, Misrepresentation, Warranty, Rescission, Statutory Construction, Health Insurance Misrepresentation, Health Insurance Application

JEL Classification: K10, K12, K41, G22