Background
New York Life Insurance and Annuity Corporation issued a life-insurance policy to Mr. Linhart in 2007. Barbara Linhart was the sole beneficiary. The policy lapsed on August 3, 2021, after its account value did not cover monthly charges, and Mr. Linhart died four days later.
Beginning in 2013, the insurer annually informed Mr. Linhart that he could designate a third party to receive lapse or termination notices, but it did not send him a standalone designation form. Barbara Linhart sued individually and on behalf of a proposed class, alleging that California Insurance Code section 10113.72(a) required the insurer to provide such forms to holders of policies issued before the statute took effect in 2013. The district court granted summary judgment to the insurer and denied class certification.
The Court’s Holding
The Ninth Circuit affirmed. It held that section 10113.72(a), which requires an insurer to provide an applicant a form to designate a third-party recipient of lapse or termination notices before a policy is issued, applies only to new, post-enactment policies.
The panel held that it was bound by the California Supreme Court’s decision in McHugh v. Protective Life Insurance Co., which described section 10113.72(a) as applying “only to new policies.” Although other provisions of section 10113.72 impose continuing duties that can apply to existing policies, subsection (a)’s applicant-and-issuance language does not require insurers to send designation forms after an older policy has already been issued.
Key Takeaways
- California Insurance Code section 10113.72(a) does not require insurers to provide designation forms for life-insurance policies issued before January 1, 2013.
- The annual notice and pretermination-notice provisions may apply to existing policies, but that does not extend subsection (a)’s pre-issuance form requirement to them.
- The Ninth Circuit affirmed summary judgment for the insurer; the district court’s denial of class certification consequently remained in place.
Why It Matters
The decision confirms that insurers need not retroactively provide section 10113.72(a) designation forms to policyholders with pre-2013 policies. For disputes involving lapse notices, the statutory subsection and the timing of policy issuance matter: ongoing notice requirements are distinct from the pre-issuance designation-form obligation.