The Misrepresentation Defense in Life and Disability Insurance Cases:
The Issue of Causation
Every person wants to put their best foot forward concerning their life history when a life or disability insurance application is taken. This helps ensure coverage is written, the risk is assumed, or the premium is lower. In most cases, the issue of misrepresentation in the application arises after the beneficiary acquires the automatic sympathy created by death or disability. It is in this difficult scenario that defense attorneys and claims examiners must make their assessment whether to deny due to a misrepresentation.
One of the most litigated issues in life and health insurance continues to be whether there was a misrepresentation in the application for insurance entitling the insurer to avoid paying the contracted benefits. A combination of case law and statutory law has developed around the question of whether misrepresentations will allow an insurer to void its policy obligations. These rules have typically been formulated in terms of whether the misrepresentation was “material.” In some states, the insurance company’s right to defend or rescind is further limited by an additional requirement that the matter misrepresented actually contributed to the loss, contingency, event or hazard for which the claim is made. In other words, in a limited number of states, the insurance company may not deny a claim or seek rescission unless a “causal relation” exists between the misrepresentation and the actual loss. Under such statutes or case law, when there is an applicant who falsely claims to be a nonsmoker, the insurance company can escape liability if the then insured dies of lung cancer due to smoking, but not if the insured later dies of AIDS. Finally, in some cases, the insurance company cannot avoid liability even when the policy has been procured through outright fraud.
Judges, accustomed to dealing with issues of a causation in many of their cases, may be receptive to a suggestion that the medical condition omitted in the application and the cause of loss be the same, or at least related, for a policy to be avoided. Such a suggestion is particularly appealing when the balance of the equities in a case is tipped in the insured’s favor. A previous article on this subject was written in 1991 by this author. This article updates its predecessor with the addition of a number of cases that have been decided since the earlier writing. Further, it will discuss the “causal relation” statutes in much more detail and expand and add to the public policy arguments against requiring a causal connection.
Statutes and Case Law not requiring a Causal Connection
Most state statutes do not contain a requirement that the misrepresentation “contributed to the loss” for an insurer to avoid a policy. In addition, a majority of courts have concluded that insurers need not be required to prove a causal connection between the misrepresentation and the ultimate loss. A fundamental principle found in many of these cases is that the actual cause of death or disability is immaterial. There is no contract if the insured conceals a medical or other condition, the knowledge of which would have caused the insurance company to act differently, regardless of whether the condition contributed to the loss suffered. The inquiry these courts use to determine whether the policy should be declared void at its inception focuses solely on the materiality of the misrepresentation.
The most common state statute provides that a misrepresentation, omission, concealment, or incorrect statement will defeat recovery under a policy of life or health insurance, when: (1) the omission, concealment or incorrect statement was fraudulent; or (2) the omission, concealment or incorrect statement was material either to the acceptance of the risk or to the hazard assumed by the insurer; or (3) the insurer in good faith would not have issued a policy at the same premium or rate, or in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been known to the insurer.
Clause two of this three-element statute concerns omissions and concealments that are material either to the acceptance of the risk or to the hazard assumed by the insurer. The concepts of risk and hazard are concerned with estimation of the probability of harm on the basis of incomplete data. Looking closer at this requirement we see that:
“Risk” and “hazard” are words with technical meanings in the insurance industry. “Risk is uncertainty concerning loss,” while “hazard is . . . a condition that may create or increase the risk of loss arising from a given peril.” . . . However, these technical definitions are not closely followed by courts and legislatures, and it would seem that the two terms are virtually synonymous as used in the law.
In the oft-cited case of Wickersham v. John Hancock Mutual Life Insurance Co., the insured misrepresented his medical history on the policy application and died as a result of a swimming pool accident. No causal connection existed between the misrepresentation and the loss. The state statute provided:
The falsity of any statement in the application for any disability insurance policy covered by chapter 34 of this code may not bar the right to recovery thereunder unless such false statement materially affected either the acceptance of the risk or the hazard assumed by the insurer.
The court found that the insurer did not have to prove a causal connection between the misrepresentation and the death of the insured, and therefore it allowed the insurer to rescind the policy. Although the court found in favor of the insurer, its analysis of the statute is contrary to the weight of authority. The court found that “acceptance of the risk relates to the evaluation made before issuance of an insurance policy and differs from ‘hazard assumed’ which refers to the circumstances of the loss.” The court ruled that the insured did not have to prove a causal connection because the misrepresentation related to the “acceptance of the risk” rather than to the hazard assumed. However, had the insurer relied on the “hazard assumed” language in the statute, it would have had to prove a causal connection. The court’s analysis of the phrases “acceptance of the risk” and “hazard assumed” differs from other authorities that find virtually no difference between the terms “risk” and “hazard” in a legislative context. The Wickersham court had no problem interpreting “acceptance of the risk” and conceded that it refers to the inception of the contract. According to the court, the “hazard assumed,” in that case, was the insured’s death.
In the 1999 Michigan Supreme Court case of Smith v. Globe Life Insurance Co. the distinction was again drawn between the terms “acceptance of the risk” and “hazard assumed.” In Smith, the insured misrepresented his health, stating he had no heart problems. He later died of a heart attack. The court restated that a causal connection between the misrepresentation and the loss is not necessary if the misrepresentation effects the insurer’s “acceptance of the risk.” Proof of a causal connection is only required when the insurer relies on the “hazard assumed” language.
The court held that the insurer was not under an obligation to show it had relied on the misrepresentations contained in the application because this was a situation in which the misrepresentation unquestionably affected the “hazard assumed” by an insurer, since the insured’s heart ailments led to his death. The supreme court stressed that when there is such a causal connection, “[the] insurer is entitled to rescind the policy . . . without a showing of reliance.”
In a misrepresentation statute, the term “hazard assumed” is typically interpreted to mean “hazard thereby assumed,” or “hazard when assumed.” In one instance, the usually-understood word was supplied directly in the statute:
All statements, declarations and descriptions in any application for an insurance policy or for the reinstatement of an insurance policy shall be deemed representations and not warranties. No statement in an application or in any affidavit made before or after loss under the policy shall bar a recovery upon a policy of insurance unless it is clearly proved that such answer or statement was material to the risk when assumed and was untrue.
It has been thought that the best analysis, and the one most favorable to the insurer, is to interpret “acceptance to the risk” and “hazard assumed” as having the same meaning in misrepresentation statutes. However, as indicated in Smith, that distinction enabled the insurer to rescind a policy without having to show reliance.
In Randono v. CUNA Mutual Insurance Group, the insured answered “no” to a question on his life insurance application concerning treatment for high blood pressure. The insurer denied liability because the insured had in fact been treated for high blood pressure. The record indicated that the insured had knowledge of the condition and recalled his past treatment for high blood pressure at the time he filled out the application for insurance. The record further indicated that, had the insurer known of all of this, the premiums charged would have been three times greater. The widow, and beneficiary of the policy, argued that recovery should not be barred because the insured died from an ailment unrelated to high blood pressure. However, the Nevada Supreme Court granted summary judgment because the misrepresentation was “material to the acceptance of the risk” and because the misrepresentation resulted in a “lower premium” for the insured. Nevada’s three-pronged misrepresentation statute, requires that the insurer prove only one of these elements.  Nevertheless, the sympathy of the court was clearly with the beneficiary. In his dissenting opinion, Justice Mowbray, citing no legal authority, disagreed with the majority on the grounds of fairness, because the misrepresentation did not relate to the cause of death.
In two states, intermediate appellate courts have unsuccessfully attempted to adopt causal connection rules that were rejected by their respective supreme courts. In the case of Massachusetts Mutual Life Insurance Co. v. Manzo, the New Jersey Supreme Court expressly rejected its intermediate court’s requirement that there be a causal connection between the cause of death and the insured’s false statements in the application. In so doing, the supreme court adopted the majority rule that there need not be a nexus between the cause of death and the misrepresentation.
Similarly, in the case of Carroll v. Jackson National Life Insurance Co. the South Carolina Supreme Court reversed its court of appeals and followed the majority rule. The South Carolina Supreme Court held that when an insured died during the two-year contestability period, in order to void the policy by reason of the insured’s misrepresentation in his application, the insurer need not prove a causal connection between the insured’s death and the material misrepresentation. The insurer must only show: (1) that “the statements complained of were untrue;” (2) that “their falsity was known to applicant;” (3) that “they were material to the risk;” (4) that “the insurer relied on the statements;” and (5) that “they were made with the intent to deceive and defraud the company.”
Over the last decade, a number of courts have adopted or followed the majority rule that there does not have to be a causal connection between the misrepresentation and the loss. The Sixth Circuit Court of Appeals in Davies v. Centennial Life Insurance Co. held that, in ERISA cases, no contribution to the loss is necessary to permit rescission. In that case, the insured, under group health insurance, misrepresented on her application that she had no circulatory system problems despite the fact she had a history of heart abnormalities. The insured made a claim for her hospitalization for a routine pregnancy. The insurer sought to rescind its coverage because of the misrepresentation. The district court held that a misrepresentation is material only if it is related to the illness or injury for which the insured is seeking payment. However, the Sixth Circuit reversed that holding by deciding that no connection is required between the misrepresentation and the claim.
In a case of first impression, the West Virginia Supreme Court in Massachusetts Life Insurance Co. v. Thompson adopted the majority rule that an insurer need not prove a casual connection between the facts misrepresented and the disability sustained. However, the court may have confused the situation, out of a desire to reduce a possibility of harm to innocent insureds. It stated, that to prove materiality, the insurer need not prove that the insured’s disability was related to the ailment misrepresented. However, the insured can defeat the defense by presenting evidence that the misrepresentation or concealment related to “a minor ailment suffered by the insured which was so unrelated and disconnected from the disabling condition suffered by the insured that it could not have possibly been material to the issuance of the policy.” Even though the court was persuaded by the majority rule, it sought to “temper” the rule because it was more troubled by the possibility that the insurer could avoid liability on a disability policy based on an “innocent misrepresentation concerning a seemingly minimal ailment, totally unrelated to the insured’s disability.”
Within the past ten years, several courts have addressed and rejected causal connection rules in cases involving cigarette smoking. In New York Life Insurance Co. v. Johnson, the United States Court of Appeals for the Third Circuit held that the policy was void ab initio because the insured failed to disclose his smoking history in the application. The insured died of reasons unrelated to smoking. The court based its decision on the Pennsylvania misrepresentation statute. The statute provided that an insurance policy is void if the insurer establishes that: (1) “the representation was false;” (2) “the insured knew that the representation was false when made or made it in bad faith;” and (3) “the representation was material to the risk being insured.” The court refused to carve out an exception for misrepresentations concerning smoking. It ruled that misrepresentations concerning smoking should be treated like other misrepresentations concerning medical condition or health background. Acknowledging the strong public policy considerations, the court stated:
If the only consequence of a fraudulent misrepresentation in a life insurance application is to reduce the amount paid under the policy, there is every incentive for applicants to lie. If the lie is undetected during the two year contestability period, the insured will have obtained excessive coverage for which he has not paid. If the lie is detected during the two year period, the insured will still obtain what he could have had if he had told the truth. In essence, the applicant has everything to gain and nothing to lose by lying. The victims will be the honest applicants who tell the truth and whose premiums will rise over the long run to pay for the excessive insurance proceeds paid out as a result of undetected misrepresentations in fraudulent applications.
State Statutes Requiring A Causal Connection
A few jurisdictions have adopted statutes that require the insurer to prove a causal connection between the matter misrepresented and the ultimate loss. Those statutes are often a difficult obstacle for the insurer to overcome when asserting a misrepresentation defense. In analyzing how to assert a misrepresentation defense in these states, these causal connection statutes must be examined very closely to determine whether the statute applies to all insurance or only to one particular type. Certain classes of insurance, such as life, health or disability, may be excluded. A number of these statutes have a limited application, and in analyzing them one needs to determine if there is an exception to the causal connection rule.
1. Life Insurance
Kansas has two causal connection statutes, one for life insurance and one for accident and sickness insurance. Both provide that a misrepresentation will not be deemed material, and cannot render a policy void, unless the misrepresentation has actually contributed to the loss.
The Kansas statute applicable to life insurance provides:
No misrepresentation made in obtaining or securing a policy of insurance on the life or lives of any person or persons, citizens of this state, shall be deemed material or render the policy void unless the matter misrepresented shall have actually contributed to the contingency or event on which the policy is to become due and payable.
In Becker v. Kansas Casualty & Sureties Co., the strict language of the statutory causation requirement was judicially weakened by a case wherein an insured died from an alleged accidental gunshot wound. The Kansas Supreme Court adopted a “moral risk” exception to the causal relation statute. It held that a causal connection was not required when the misrepresented facts increased the “moral risk” and would probably have prevented issuance of a policy. In its holding, the court recognized that a misrepresentation concerning the existence or amount of other insurance would never contribute to the contingency of death, but would effect a “moral risk.” However, thirty-five years later the Kansas Supreme Court reversed itself and held that “[I]n view of the clear and explicit language of the statute, it was unwarranted in engrafting on that statute an exception the legislature did not see fit to include . . . .”
An unreported decision interpreting the Kansas misrepresentation statute is Bettis Asphalt & Construction Co. v. Executive Life Insurance. In that case, the insured represented that a physician had not treated him within the previous three years, despite the fact that he had seen a psychiatrist who prescribed medication for depression. On a motion for summary judgment, the United States District Court for the District of Kansas held that the misrepresentation regarding psychiatric treatment contributed to the insured’s suicide. In doing so, the court noted uncontradicted evidence that the insured had misrepresented his health by failing to disclose that he had been treated for depression. According to the court, the recurrence of this depression contributed to his suicide and rendered the policy void under section 40-418 of the Kansas Statutes.
2. Accident and Sickness Insurance
The Kansas statute applicable to accident and sickness insurance provides:
(C) The falsity of any material statement in the application for any policy covered by this act may not bar the right to recovery thereunder unless the false statement has actually contributed to the contingency or event on which the policy is to become due and payable: Provided, however, That [sic] any recovery resulting from the operation of this section shall not bar the right to render the policy void in accordance with its provisions.
To date, no Kansas court has construed this causal connection statute for accident and sickness policies.
The Missouri causal connection provisions are similar to those found in the Kansas life insurance statute.
1. Life Insurance
The Missouri life insurance statute provides as follows:
No misrepresentation made in obtaining or securing a policy of insurance on the life or lives of any person or persons, citizens of this state, shall be deemed material, or render the policy void, unless the matter misrepresented shall have actually contributed to the contingency or event on which the policy is to become due and payable, and whether it so contributed in any case shall be a question for the jury.
In the case of Derickson v. Fidelity Life Association, the Eighth Circuit Court of Appeals held that a “matter misrepresented in an application for life insurance must have ‘actually contributed’ to the insured’s cause of death to be deemed material and to thus render the policy void.” The insured stated on his application that his driver’s license was not revoked in the past three years. He later died in a car accident. The insurer discovered that the insured had nine suspensions and four revocations in the previous three years. The insurer denied coverage and returned the premiums to the policy beneficiary. It stated that it would not have issued the policy to the insured with knowledge of his driving record. The District Court for the Eastern District of Missouri granted summary judgment for the insurer. The court of appeals, however, believed that a jury could reasonably find that the insured was not negligent or reckless in driving at the time of the fatal accident. Therefore, a jury could find that the matter misrepresented, a reckless or negligent driving record, did not contribute to the accident. The case was retried in July of 1996, and the jury returned a verdict in favor of the beneficiary and against the insurer.
In a more recent case also involving driving history, the District Court for the Eastern District of Missouri, in Humphries v. Northwestern Mutual Life Insurance Co., granted an insurer’s motion for summary judgment. The insured misrepresented his driving history on his application, indicating he had no accidents, violations, or restrictions in the past five years. However, he had in fact been convicted of drunken driving and his license was suspended the previous year. He subsequently died following a one-car accident and was found to have a blood alcohol content of .229. The court found that the decedent’s condition of sleep apnea and family history of heart attacks alone, without any specific facts linking these factors to the accident, did not present sufficient evidence for a reasonable jury to find it was a cause of the death. Therefore, the court granted the insurer’s motion for summary judgment.
2. Health and Accident Insurance
The Missouri statute applicable to health and accident insurance provides as follows:
Anything in the law to the contrary notwithstanding, no misrepresentation made in obtaining or securing a policy of insurance covered by sections 376.770 to 376.800 shall be deemed material or render the policy void, or constitute a defense to a claim thereunder unless the matter misrepresented shall have actually contributed to the contingency or event on which any claim thereunder is to become due and payable, and whether it so contributed in any case shall be a question for the jury.
In White v. American Republic Insurance Co., the plaintiff was kicked by a horse and demanded medical benefits for the injuries inflicted. The insurer contended the policy was void because the application did not disclose that the insured already had other policies that covered the same risk. The insurer could not meet the “causal connection” requirement because the insured’s misrepresentations were unrelated to the injuries suffered. The Missouri Court of Appeals held that the statute applies to misrepresentations concerning other insurance. Accordingly, in order to void liability, the insurer was required to prove that misrepresentations with respect to other insurance contributed to the event as to which insured’s claim became due and payable. Evidence that misrepresentation affected the acceptance of the risk or the hazard assumed by the insurance company was insufficient as a matter of law.
The Missouri Court of Appeals, in White, did not completely foreclose a misrepresentation defense in situations in which the insured misrepresented the availability of other insurance for the same risk. The court commented:
In those cases where there is evidence offered that the existence of extra insurance coverage was a motive for the insured to assert bogus, fictitious or fraudulent claims or prompted him to malinger or fake accidents or ailments in order to collect the coverage, then the matter misrepresented (i.e., excessive insurance coverages) might be determined to have actually contributed to the event on which the claim became due. In such event § 376.800 and § 376.783.3 would be available as a defense to the insurance company if it met its burden of proof of convincing the trier of fact (judge or jury) of such facts.
The insurer offered no evidence that the insured had an improper motive in securing excessive amounts of insurance. Accordingly, the court held that liability on the policy could not be avoided.
The White case is important to insurers defending claims in a causal connection state. It raises the possibility that, in some instances, the definition of causal connection can be broadened, thereby enabling an insurer to successfully defend on the grounds of misrepresentation.
At least one authority characterizes Nebraska as a causal connection state. However, an analysis of the statutes and cases calls that into question. The Nebraska statute that applies only to accident and sickness insurance, section 44-710.14, provides: “[t]he falsity of any statement in the application for any policy of sickness and accident insurance covered by sections 44-709 to 44-767 may not bar the right to recovery thereunder unless such false statement materially affected either the acceptance of the risk or the hazard assumed by the insurer.” The Nebraska statute applicable to all insurance policies, section 44-358, provides:
No oral or written misrepresentation or warranty made in the negotiation for a contract or policy of insurance by the insured, or in his behalf, shall be deemed material or defeat or avoid the policy, or prevent its attaching, unless such misrepresentation or warranty deceived the company to its injury. The breach of a warranty or condition in any contract or policy of insurance shall not avoid the policy nor avail the insurer to avoid liability, unless such breach shall exist at the time of the loss and contribute to the loss, anything in the policy or contract of insurance to the contrary withstanding.
Under Nebraska law, all statements by insureds are deemed representations rather than warranties. The “contribute-to-the-loss” language in section 44-358 seems to apply only to warranties and conditions. Thus one might reasonably conclude, from a reading of the statute, that Nebraska is not a causal connection state.
In construing the statutes in relation to misrepresentations in an accident and sickness policy, the Nebraska Supreme Court has determined that sections 44-710.14 and 44-358 must be read together. In Glockel v. State Farm Mutual Automobile Insurance Co., involving the rescission of an automobile liability policy, the court addressed the issue of whether an insurer has the common law right to rescind, noting, “[p]erhaps it is most accurate to state that in Nebraska there is a common law right to rescind or avoid insurance policies for material misrepresentations, which is recognized in and limited by § 44-358.” In Zimmerman v. Continental Casualty Co., involving the rescission of an accident policy, the court refused to impose the requirement of proving a causal connection on the insurer. Finally, in Equitable Life Assurance Society v. Joiner, the court allowed the insurance company to successfully assert a misrepresentation defense, even though the matter misrepresented was not causally related to the loss.
In 1957, Oklahoma enacted a causal connection statute that applies only to limited stock life, accident, and health insurers. The statute provides as follows:
No representation made in obtaining or securing a policy of insurance on the life or lives of any person, or persons, shall be deemed material, or render the policy void, unless the matter misrepresented shall have actually contributed to the contingency or event on which the policy is to become due and payable.
There are no reported cases that have applied or interpreted this statute. The general misrepresentation statute for Oklahoma does not require a causal relationship between the matter misrepresented and the loss.
E. Rhode Island
In Rhode Island, an insurance company must show a causal connection between the misrepresentation and the loss in life insurance cases, but not in accident and health insurance cases. The life insurance statute provides:
No misstatement made in procuring a policy of life insurance shall be deemed material or render the policy void unless the matter thus represented shall have actually contributed to the contingency or event on which the policy is to become due and payable. Whether the matter so represented contributed to that contingency or event, in any case, shall be a question for the jury.
Rhode Island allows the insurance company to cancel before a loss, during the life of the insured, on the ground of misrepresentation.
Statutes Incorporating Causal Connection As Alternative To Materiality
Wisconsin, Utah and Texas have statutes that use a “causal connection” formulation in determining the effect of a misrepresentation. The Wisconsin statute reads as follows:
No misrepresentation, and no breach of an affirmative warranty, that is made by a person other than the insurer or an agent of the insurer in the negotiation for or procurement of an insurance contract constitutes grounds for rescission of, or affects the insurer's obligations under, the policy unless, if a misrepresentation, the person knew or should have known that the representation was false, and unless any of the following applies:
1. The insurer relies on the misrepresentation or affirmative warranty and the misrepresentation or affirmative warranty is either material or made with intent to deceive.
2. The fact misrepresented or falsely warranted contributes to the loss.
The Utah statute reads as follows:
[N]o misrepresentation or breach of an affirmative warranty affects the insurer’s obligations under the policy unless: (a) the insurer relies on it and is either material or is made with the intent to deceive; or (b) the fact misrepresented or falsely warranted contributes to the loss.
The Texas statute reads:
Any provision in any contract or policy of insurance issued or contracted for in this State which provides that the answers or statements made in the application for such contract or in the contract of insurance, if untrue or false, shall render the contract or policy void or voidable, shall be of no effect, and shall not constitute any defense to any suit brought upon such contract, unless it be shown upon the trial thereof that the matter or thing misrepresented was material to the risk or actually contributed to the contingency or event on which said policy became due and payable, and whether it was material and so contributed in any case shall be a question of fact to be determined by the court or jury trying such case.
The courts in Wisconsin, Utah and Texas have interpreted these statutes as written, allowing misrepresentation as a defense when it is material or fraudulent, even if it did not contribute to the loss. It may be theoretically possible for a misrepresentation to contribute to the loss even though it did not increase the risk. In such a situation, a contribution to the loss standard would be less favorable to the policyholder than an increase of risk standard. But even if the standards as interpreted create this theoretical possibility, the occasions of its occurrence in fact are rare.
Commentators perceive causal connection as the highest standard of materiality. Although the Wisconsin, Utah and Texas statutes are worded as though proving a causal connection were an alternative to proving materiality, insurers should exercise caution in taking the position that these statutes provide an additional defense. As the Utah Supreme Court observed:
[T]he insurer must prove that the misrepresentation was made with the intent to deceive or that the matter misrepresented was material or that the insurer in good faith would not have issued the policy if the true facts had been made known to the insurer. Our construction is consistent with other courts interpreting similar statutory schemes. We note, however, that we have not found a case, under the statute relevant here, where the insurer argued that it should escape liability because the alleged misrepresentation was made with an intent to deceive but was material neither to acceptance of the risk nor to the issuance of the policy. This hypothetical but troubling construction is thus of little realistic concern as the cases consistently focus on materiality and reliance.
The Arkansas Statute and Case Law
In Arkansas, the causal connection requirement was judicially adopted initially, but the Arkansas Supreme Court later reversed its position. The Arkansas Legislature then attempted to reverse the effect of the Arkansas Supreme Court decision.
In National Old Line Insurance Co. v. People, the Arkansas Supreme Court was called upon to interpret the three-element misrepresentation statute that read:
(a) All statements in any application for a life or disability insurance policy or annuity contract, or in negotiations therefor, by or in behalf of the insured or annuitant, shall be deemed to be representations and not warranties. Misrepresentations, omissions, concealment of facts, and incorrect statements shall not prevent a recovery under the policy or contract unless either:
(2) Material either to the acceptance of the risk or to the hazard assumed by the insurer; or
(3) The insurer in good faith would not have issued the policy or contract or would not have issued a policy or contract in as large an amount or at the same premium or rate or would not have provided coverage with respect to the hazard resulting in the loss if the facts had been made known to the insurer as required by the application for the policy or contract or otherwise.
In National Old Line the insured died, but not because of the misrepresented condition. The question remained whether a “contribute to the loss” test was to be applied for the insurer’s defense to be valid. The Arkansas Supreme Court, affirming the lower court’s judgment, held that such a standard applied. Basing its reasoning on the grounds of fairness, the court stated:
It is our conclusion that, under the Code, the insurer must show a causal relation between the applicant’s misrepresentation and the eventual loss. . . .
Fairness and reason support the view that a causal connection should be essential. Otherwise, when the insured is killed by a stroke of lightning or by being run over by a car, the insurance company could successfully deny liability by showing that the insured was suffering from diabetes when he stated that he was in good health.
The Arkansas Supreme Court later overruled National Old Line in the case of Southern Farm Bureau Life Insurance Co. v. Cowger. In Cowger the insured stated that he had no stomach or liver problems nor had he used alcohol to excess in the past ten years. In fact, he had been hospitalized for cirrhosis of the liver, acute alcoholism, and delirium tremens and evidence clearly showed that the insured was aware of those conditions when he applied for the policy. He was subsequently killed, being pinned under a tractor that overturned on a slope as he attempted to mow grass. The insured was released from hospitalization for alcoholism just the day before the accident. However, there was no evidence of pre-accident alcohol consumption.
The Arkansas Supreme Court was squarely faced the issue of whether a misrepresentation in the issuance of the life policy would bar recovery even when the subsequent loss was unrelated to the fact misrepresented. The court, overruling National Old Line, reasoned that even though fairness weighed in favor of the insured, the decision of whether to allow recovery despite a misrepresentation must be left to the Arkansas legislature. The court noted that of seventeen states that adopted statutory misrepresentation rules similar to the Arkansas statute, none had construed the statute to incorporate the type of causation requirement found in National Old Line, and three states had expressly rejected that type of construction. Two justices dissented from the holding arguing that years of inaction after the earlier decisions evidenced a legislative intent to adopt a causal connection requirement.
In 1989, the Arkansas Legislature attempted to reverse the effect of Cowger. It amended section 23-79-107 to add the following paragraph: “(c) In any action to rescind any policy or contract or to recover thereon, a misrepresentation is material if there is a causal relationship between the misrepresentation and the hazard resulting in a loss under the policy or contract.”
An argument can be made that this amendment is not effective for two reasons. First, the new wording provides that a misrepresentation is material if there is a causal relationship between the misrepresentation and the loss. It does not say that misrepresentation is (deemed) material only if there is such a relationship. Second, whether the relationship is material would appear significant only for the purposes of one of the three circumstances under which misrepresentation prevents a recovery, as specified in the statute. Namely, that there is no recovery unless the misrepresentation is (1) fraudulent, or (2) material either to the acceptance of the risk or to the hazard assumed, or (3) if the insurer would not have issued the policy. Therefore, the amendment to the statute would appear to speak only to the second of these elements of proof.
Unfortunately, the bill that enacted this provision contained a preface stating its purpose. That is “to clarify the insurance code and to reaffirm the intention of the General Assembly to assure that no insurer may defend a policy claim on the grounds of misrepresentations unless related to a loss sustained; and for other purposes.” Under the Arkansas Code such a preamble is not codified into law. However, the preamble could be shown to a court as persuasive authority when asked to interpret the statute.
One source has suggested that the new provision may not be a shield for the insured, but rather, a sword for the insurer. The statute does not require proof of a causal relation to rescind, but holds that when a causal relation exists it is material. Therefore, an insured may not argue that a causal relationship loss is not material to the risk or to the hazard assumed.
To date, no cases have been decided under the new Arkansas statute.
Case Law Requiring A Causal Connection
In addition to those states with statutes that explicitly require a causal connection, courts in other states have stated that the misrepresentation will be deemed material only if it contributes to the loss.
The Ohio Supreme Court has yet to speak on the necessity of causal connection in insurance misrepresentation cases. However, in Thompson v. New York Life Insurance Co., the Ohio Court of Appeals found that the trial court improperly granted summary judgment in favor of the insurer in such a case. The court of appeals stated that the insurer failed to prove that the misrepresentations of the plaintiff were material to the risk because, “[i]n order for a prior medical claim to be material to an insurance application, there must be a relationship between the prior infirmity and the infirmity which forms the basis of the claim.” Since the basis of the plaintiff’s claim was a back injury, a medical condition unrelated to her previous medical problems, the court of appeals, using its newfound causal connection analysis, decided that the insurer failed to prove the materiality of her misrepresentations. However, in Estate of Barnhart v. Acceleration Life Insurance Co., the court of appeals affirmed summary judgment in favor of the insurer denying death benefits because of misrepresentation by the applicant. Here the insured had falsely denied a history of kidney disease but died of heart disease. The court rejected the plaintiff’s contention that coverage should not be denied because there was no causal connection between the misrepresentation and the death, saying that the court had previously held that such a causal connection is not required.
Arizona’s appellate court has imposed a causal connection requirement in cases where the insurer claims that the insured misrepresented facts that were material to the hazard assumed by the insurer. The Arizona misrepresentation statute provides:
All statements and descriptions in any application for an insurance policy or in negotiations therefor, by or on behalf of the insured, shall be deemed to be representations and not warranties. Misrepresentations, omissions, concealment of facts, and incorrect statements shall not prevent a recovery under the policy unless:
(2) Material either to the acceptance of the risk, or the hazard assumed by the insurer.
(3) The insurer in good faith would either not have issued the policy, or would not have issued a policy in as large an amount or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or otherwise.
A causal connection between the matter misrepresented and the risk assumed was required by the Arizona Appellate Court in Central National Life Insurance Company v. Peterson. In Peterson the insured failed to disclose his prior hospitalization for back and heart problems on his application for an insurance policy. The insurer denied his claim for disability benefits following a heart attack, but the trial court awarded him the benefits. The Arizona Court of Appeals reversed and remanded the case for a new trial. In propounding its causal connection requirement, the Peterson court stated that, “[i]t is clear that as the law now stands, if the insurer is relying on the fact that it would not have provided coverage with respect to a certain hazard, that particular hazard must be the one which actually caused the loss.” The necessary causal connection was found to exist in Peterson because the insured’s disclosure of the hospitalization for treatment of his back problem would have also revealed the untreated heart condition that apparently led to the disability.
In 1987, another Arizona court affirmed the Peterson court’s imposition of a causal connection requirement in misrepresentation cases in State Compensation Fund v. Mar Pac Helicopter Corp. Although the Mar Pac court reiterated Peterson in requiring a causal relationship where the insurer relies on the “hazard assumed” portion of the Arizona misrepresentation statute, it also cautioned against interpreting Peterson to mean that a causal connection would be required in “all cases.”
Practical Considerations and Public Policy:
Reasons Why the Casual Connection Requirement Should Not Be Adopted
Counsel for the insured or beneficiary will argue that the insurer should not be able to cry foul when the matter misrepresented had nothing to do with the eventual loss. They believe that to allow the insurance company to avoid liability is too severe a penalty, even for intentional fraud, because rescission would strip the insured of coverage that he has relied upon. Furthermore, in cases in which the loss has already occurred, the insured will be unable to secure other coverage and innocent beneficiaries may suffer the loss.
In the face of these arguments, defense counsel will be aided by the considerable case law that has rejected the causal connection argument. In addition, there are many practical and public policy reasons why the causal connection argument should not be adopted.
1. A dishonest applicant will receive insurance benefits that he would not have been entitled to receive had he been truthful. This reward for deception will only encourage dishonest behavior by life or health insurance applicants. It is contrary to public policy for the courts to adopt rules of law that encourage, and even reward, misrepresentations in business dealings.
The courts have specifically recognized the inequity of requiring a causal connection between the misrepresentation and the loss. In Wickersham v. John Hancock Mutual Insurance Co., the court stated that “[A]bsent clear direction, we cannot conclude that the Legislature intended to place applicants who deliberately misrepresent or conceal material facts in such an advantageous legal position as compared to those who reasonably disclose them.”
In the words of the New Jersey Supreme Court in Massachusetts Mutual Life Insurance Co. v. Manzo, “the law should encourage insureds to tell the truth, not to conceal information from the insurer and gamble that they will not die of a concealed disease.”
In Southern Farm Bureau Life Insurance Co. v. Cowger, the court found that: “This [the causal connection rule] places the policy applicant in the position of being able to gamble that he or she will not sustain a loss caused by the existence of the fact misrepresented. . . . On the other hand, the honest applicant who has the same facts to reveal will be denied insurance because of telling the truth.”
In Mutual Benefit Life Insurance Co. v. JMR Electronics Corp., the court expressed similar concerns, holding that an insured’s misrepresentation of his status as a smoker warrants policy rescission because “a contrary result would reward the practice of misrepresenting facts critical to the underwriter’s task because the unscrupulous (or merely negligent) applicant ‘would have everything to gain and nothing to lose’ by making material misrepresentations in his application for insurance.”
The significance of the accuracy of the information on an insurance application cannot be overstated. The application for insurance is one of the most important and fundamental of the underwriter’s risk assessment tools and serves as the basis of the contract between the company and the policyholder. If an underwriter, because of false information in an insurance application, wrongly accepts an individual for coverage or wrongly classifies that person as a lower risk and charges a lower premium based on that perceived lower risk, the insurer will suffer a financial loss when the insured makes a claim. Those financial losses are distributed among the insurer’s honest policyholders in the form of higher insurance premiums.
2. A causal connection requirement creates situations in which different insureds with identical risk characteristics will receive radically different treatment in the courts, with the further absurdity that the most favorable treatment will be afforded to the dishonest applicant who is “fortunate” enough to die from a condition unrelated to the misrepresentation. No legitimate public policy goal is served by such irrational results.
Commentators have constructed examples that illustrate how the causal connection requirement actually rewards the dishonest insured and punishes the honest applicant. In one such hypothetical, two women suffering from the same ailment apply for life insurance coverage. One lies about her condition in order to obtain coverage, and the other tells the truth and her application is rejected. Should both applicants die soon after as a result of an event unrelated to their ailment, the theory of causal connection would allow the fraudulent applicant to collect on what is essentially an invalid policy, while the family of the honest applicant would receive nothing.
3. A causal connection requirement makes it impossible for a life insurer to rescind a policy when it discovers a misrepresentation in the application prior to the insured’s death. If the insurer can rescind only for a material misrepresentation, and materiality depends on a causal connection between the death and the misrepresentation, an insurer must wait until after death occurs and the causal connection, or the lack of it, is established.
4. A causal connection requirement must be viewed from the standpoint of those (other than the insured) who are most able to prevent misrepresentations in applications, the agents. In causal connection jurisdictions, agents have no financial motive to demand precise and honest applications, because incorrect and even fraudulent responses will not defeat an insured’s claim. In order to sell a policy, some agents may encourage concealment of misrepresentation of facts that might cause the insurer to deny the application, increase the premium, or lower the benefit. Thus, the unethical agent and the dishonest insured would both benefit from a causal connection requirement, to the detriment of honest insureds, insurance companies and the public at large.
5. When an insured dies, the person’s doctor may not be interested in determining an exact cause of death. In many cases, it is very likely that the insured will be buried before the insurer learns of the death, thus making it very difficult for the company to determine an exact cause of death. Insurance companies may lack ready proof that a misrepresentation can contribute to the loss even when it actually did so. To obtain such proof for the life, health and disability claim, the insurance company will be required to obtain an expert medical opinion. Such proof may require extraordinary investigation, both before the policy is issued and before the loss. Thus, policies in causal connection states are most costly to insurance companies.
6. The harshness of the causal connection requirement is evident when the insured has fraudulently misrepresented a fact that the court concludes cannot possibly result in or cause the event that gave rise to the claim. For example, it will be extremely difficult, if not impossible, for a disability insurer to argue that the applicant’s misrepresentation about not having “other insurance” caused him to suffer a disabling injury. A causal connection rule will serve to protect the applicant’s fraud and to guarantee overpayment. However, absent a causal connection requirement, the insurer could have easily established that it would never have issued a disability policy had it known of other existing disability policies that the insured had in force.
The concurring opinion in White v. American Republic Insurance Co., addressed the adverse financial impact of the Missouri causal connection statute:
In this day of ever-increasing medical and hospitalization expenses, the legislature might see fit to reconsider the wisdom of a statute which has the effect of permitting a misrepresenter to profit by multiple policies whose existence he has denied. Truthful policyholders bear the burden of his ill-gotten gains.
The cases and statutes cited point out the continuing appeal of a causal connection requirement. Insurance companies should expect courts and legislatures to continue to test the waters with respect to imposing causal connection requirements. Every state is potentially a causal connection state, even absent a statute to that effect. The rationale of the causal connection argument is that (1) the insurance company should not be able to avoid liability when the matter misrepresented had nothing to do with the eventual loss; (2) fairness and justice weigh in favor of the insured or beneficiary since the misrepresentation on the application was essentially harmless because the cause of the death or disability had nothing to do with the representation; and (3) innocent beneficiaries will suffer the ultimate loss and will be unable to secure other coverages.
Educating the courts about the underwriting process and the real issues of misrepresentation and materiality is aided by the considerable case law that has rejected the foregoing arguments. There are also strong practical considerations and public policy reasons why the causal connection argument should not be adopted. These practical and public policy arguments clearly cut in the insurers’ favor.
In most states the actual cause of death or disability is immaterial, and the inquiry to determine whether the policy should be declared void focuses on the materiality of the misrepresentation contained in the application. The basis for this position is that there has been no contract if the insured has hidden a condition that, if disclosed in the application, would have prompted the insurer to act differently than it did, irrespective of whether the condition actually contributed to the loss suffered by the insured. A misrepresentation that is clearly material at the time the applicant made it does not become immaterial simply because the insured’s death or disability resulted from a different cause.
 Edgar Sentell, Misrepresentation in the Life and Disability Insurance Application: The Issue of Causation, 41 Fed’n Ins. & Corp. Couns. Q. 507 (1991).
 Robert E. Keeton & Alan I. Widiss, Insurance Law, A Guide to Fundamental Principles, Legal Doctrines, and Commercial Practices at 572 n.20 (West 1988) (the “clear majority rule” is that no causal connection is required). See generally 1Alan A Appleman, Insurance Law & Practice § 245 (1981); 7 Couch, Insurance 2d § 35:87 (rev. ed. 1995 & Supp. 1994); 43 Am. Jur. 2d Insurance § 1058 (1982). For cases in which the majority rule has been adopted or approved, see Petersen v. Mut. Life Ins. Co., 803 P.2d 406 (Alaska, 1990); Mut. Life Ins. Co. v. Morairty, 178 F.2d 470 (9th Cir. 1949), cert. denied, 339 U.S. 937 (1950) (interpreting Arizona law); Southern Farm Bureau Life Ins. Co. v. Cowger, 748 S.W.2d 332 (Ark. 1988); Torbensen v. Family Life Ins. Co., 329 P.2d 596 (Cal. Ct. App. 1958); Benson v. Bankers Life & Cas. Co., 362 P.2d 1039 (Colo. 1961); Jones v. Prudential Ins. Co., 388 A.2d 476 (D.C. 1978); Minnesota Mut. Life Ins. Co. v. Candelore, 416 So. 2d 1149 (Fla. Dist. Ct. App. 1982), review denied 424 So. 2d 760 (Fla. 1982); Martin v. Metropolitan Life Ins. Co., 192 F.2d 167 (5th Cir. 1951) (interpreting Georgia law); Hatch v. Woodmen Accid. & Life Co., 409 N.E.2d 540 (Ill. App. Ct. 1980); Buck v. Am. States Life Ins. Co., 723 F. Supp. 155 (E.D. Mo. 1989) (applying Illinois law); Bush v. Washington Nat’l Life Ins. Co., 534 N.E.2d 1139 (Ind. Ct. App. 1989); Pacific Mut. Life Ins. Co. v. Arnold, 90 S.W.2d 44 (Ky. 1935); Radosta v. Prudential Ins. Co., 163 So. 2d 177 (La. Ct. App. 1964), writ refused, 165 So. 2d 483 (La. 1964); Malloy v. New York Life Ins. Co., 103 F.2d 439 (1st Cir. 1939), cert. denied, 308 U.S. 572 (1939) (interpreting Maine law); Hofmann v. John Hancock Mut. Life Ins. Co., 400 F. Supp. 827 (D. Md. 1975); New York Life Ins. Co. v. Simons, 60 F.2d 30 (1st Cir. 1932), cert. denied, 287 U.S. 648 (1932) (interpreting Massachusetts law); Wickersham v. John Hancock Mut. Life Ins. Co., 318 N.W.2d 456 (Mich. 1982) (certified question); Howard v. Aid Ass’n for Lutherans, 272 N.W.2d 910 (Minn. 1978); Randono v. CUNA Mut. Ins. Group, 793 P.2d 1324 (Nev. 1990); Amoskeag Trust Co. v. Prudential Ins. Co., 185 A. 2 (N.H. 1936); Prudential Ins. Co. v. Anaya, 428 P.2d 640 (N.M. 1967); Greene v. United Mut. Life Ins. Co., 238 N.Y.S.2d 809 (Sup. Ct. 1963) aff’d, 258 N.Y.S.2d 323 (App. Div. 1965); Tedder v. Union Fidelity Life Ins. Co, 436 F. Supp. 847 (E.D.N.C. 1977); Shafer v. John Hancock Mut. Life Ins. Co., 189 A.2d 234 (Pa. 1963); Bushfield v. World Mut. Health & Accid. Ins. Co., 123 N.W.2d 327 (S.D.1963); Montgomery v. Reserve Life Ins. Co., 585 S.W.2d 620 (Tenn. Ct. App. 1979); Robinson v. Reliable Life Ins. Co., 554 S.W.2d 231 (Tex. App. 1977), aff’d, 569 S.W.2d 28 (Tex. 1978); Berger v. Minnesota Mut. Life Ins. Co., 723 P.2d 388 (Utah 1986); Mut. Benefit Health & Accid. Ass’n v. Alley, 187 S.E. 456 (Va. 1936); McAllister v. Avemco Ins. Co., 528 A.2d 758 (Vt. 1987); Yurk v. Prudential Ins. Co., 219 N.W.2d 561 (Wis. 1974).
 Keeton & Widiss, supra note 2, at 680.
 Bertram Harnett & Irving L. Lesnick, The Law of Life and Health Insurance § 4.02(2), at (4-35) (1999) (quoting Robert I. Mehr & Emerson Cammack, Principles of Insurance, 21, 23 (6th ed. 1976) and citing Robert E. Keeton, Insurance Law: Basic Text 384 (1971): “It is difficult, if not impossible, to discovery any significance in the difference between ‘hazard’ and ‘risk’.”
 318 N.W.2d 456 (Mich. 1982) (certified questions).
 Mich. Comp. Laws Ann. § 500.2218 (1967) (Mich. Stat. Ann. § 24.12218 (Callaghan 1987)) (emphasis added).
 Wickersham, 318 N.W.2d at 458.
 597 N.W.2d 28 (Mich. 1999).
 Id. at 36.
 Va. Code Ann. § 38.2-309 (West 1986) (emphasis added).
 422 P.2d 1009 (Kan. 1967).
 Id. at 1010.
 793 P.2d 1324 (Nev. 1990).
 Id. at 1326.
 Nev. Rev. Stat. § 687B.110 (1971).
 Randono, 793 P.2d at 1327 (Mowbray, J., dissenting).
 584 A.2d 190 (N.J. 1991).
 414 S.E.2d 777 (S.C. 1992).
 Id. at 777-78.
 See Veal v. Veterans Life Ins. Co., 767 S.W.2d 892 (Tex. App. 1989); Petersen v. Mut. Life Ins. Co., 803 P.2d 406, 409 (Alaska, 1990); Evans v. Golden Rule Ins. Co., 1991 CCH Life Cas ¶¶ 3557, 3558 (D. Mich. 1991); Hood v. Prudential Ins. Co., 758 F. Supp. 764 (D.D.C. 1991); Miller v. Zurich Am. Life Ins. Co., 1989-90 CCH Life Cas ¶ 2735 (D. Mich. 1990); Gasaway v. Northwestern Mut. Life. Ins. Co., 26 F.3d 957 (9th Cir. 1994) (applying Hawaii law); Celtic Life Ins. Co. v. Monroe, 467 S.E.2d 360 (Ga. Ct. App. 1996); Wesley v. Union Nat’l Life, 919 F. Supp. 232 (S.D. Miss. 1995).
 128 F.3d 934 (6th Cir. 1997) (applying Ohio law).
 460 S.E.2d 719 (W. Va. 1995).
 Id. at 721, 727.
 Id. at 726-27.
 See Swift v. N. Am. Co. for Life & Health Ins., 677 F. Supp. 1145 (S.D. Fla. 1987); Mut. Ben. Life Ins. Co. v. JMR Elects. Corp., 848 F.2d 30 (2d Cir. 1988) (applying New York law); North Atlantic Life Ins. Co. v. Rothman, 542 N.Y.S.2d 795 (App. Div. 1989); Parker v. Prudential Ins. Co., 900 F.2d 772 (4th Cir. 1990) (applying Maryland law); Ives v. INA Life Ins. Co., 790 P.2d 1206 (Or. Ct. App. 1990); Old Line Life Ins. Co. v. Superior Court, 281 Cal. Rptr. 15 (Ct. App. 1991); Kentucky Cent. Life Ins. Co. v. Marin Bay Park Trust, No. C89-2647 (N.D. Cal. Aug. 22, 1990); Kentucky Cent. Life Ins. Co. v. Jones, 799 F. Supp. 53 (M.D. Tenn. 1992).
 923 F.2d 279 (3d Cir. 1991) (applying Pennsylvania law).
 Id. at 281.
 Id. at 284.
 Kan. Stat. Ann. § 40-418 (2000) (emphasis added). This statute, which was first enacted in 1907, is cited in older Kansas cases. See, e.g., Green v. Nat’l Annuity Ass’n, 135 P. 586 (Kan. 1913) (holding that facts withheld or misrepresented must pertain in some degree to the malady which caused the death of the insured); Sharrer v. Capital Life Ins. Co., 171 P. 622 (Kan. 1918) (holding that incorrect statements were not necessarily fatal if made in good faith); Glasgow v. Sovereign Camp, W.O.W., 191 P. 470 (Kan. 1920) (holding statute inapplicable to fraternal benefit insurance policies); Hiatt v. Sovereign Camp, Woodmen of the World, 191 P. 472 (Kan. 1920); Steele v. Sovereign Camp, W.O.W., 222 P. 76 (Kan. 1927) (holding statute inapplicable to recovery of health benefits under health and accident insurance policies); Elliff v. Inter-State Bus. Men’s Accid. Co., 109 P.2d 92 (Kan. 1941) (holding statute inapplicable to health and accident policies); Hurt v. New York Life Ins. Co., 41 F.2d 392 (D. Kan. 1930) (holding that breach of policy condition by visiting a physician between the time of the application and delivery of the policy was grounds for cancellation of the policy, even though misrepresentation was not causally related to the loss), aff’d, 51 F.2d 936 (10th Cir. 1931) (finding that visiting a physician was failure of a condition precedent); De Pee v. Nat’l Life & Accid. Ins. Co., 62 P.2d 923 (Kan. 1936) (holding a misrepresentation regarding occupation material under this statute where insured did not reveal he was a criminal out on parole and was subsequently killed while resisting arrest); Nat’l Reserve Life Ins. Co. v. Humphreys, 65 P.2d 296 (Kan. 1937) (holding an insurer could not cancel policy where concealment of surgical operation had nothing to do with the cause of death); Brown v. Metro. Life Ins. Co., 69 P.2d 1110 (Kan. 1937) (holding statute inapplicable to false statement in application for reinstatement of a lapsed policy); Nat’l Reserve Life Ins. Co. v. Jeffries, 75 P.2d 302 (Kan. 1938) (rendering a policy void where false representation as to good health contributed to the event on which the policy became due); Jackson v. Nat’l Life & Accid. Ins. Co., 90 P.2d 1097 (Kan. 1939) (holding that there was no connection between matter misrepresented and death from myocarditis); New York Life Ins. Co. v. McCurdy, 106 F.2d 181 (10th Cir. 1939) (holding no recovery may be had if fraud in obtaining the policy is established).
 181 P. 549 (Kan. 1919).
 Id. at 551
 Hawkins v. New York Life Ins. Co., 269 P.2d 389, 397 (Kan. 1954).
 No. 86-4362-S, slip op., 1989 WL 21018 (D. Kan. Feb. 27, 1989).
 Kan. Stat. Ann. § 40-2205 (2000) (emphasis added).
 Mo. Rev. Stat. § 376.580 (1991) (emphasis added). Originally adopted in 1874, this statute has been construed in scores of cases. See, e.g., Northwestern Nat’l Life Ins. Co. v. Riggs, 203 U.S. 243 (1906) (reciting history of the statute); New York Life v. Feinberg, 212 S.W.2d 574 (Mo. 1948) (holding a misrepresentation must contribute to death of the insured and whether it so contributed is a question for the jury); Dixon v. Bus. Men’s Assurance Co., 285 S.W.2d 619 (Mo. 1956) (holding that material misrepresentation must be knowingly fraudulent in order to avoid policy when there is no applicable misrepresentation provision in the policy); Bohm v. Fid. & Cas. Co., 399 S.W.2d 450 (Mo. Ct. App. 1966) (finding § 376.580 applies regardless of whether misrepresentations are fraudulent or innocent); Pyramid Life Ins. Co. v. Curry, 291 F.2d 411 (8th Cir. 1961) (holding evidence presented a jury question whether misrepresentation related to illness causing death); Winger v. Gen. Am. Life Ins. Co., 345 S.W.2d 170 (Mo. 1961) (holding evidence as to misrepresentation of the health of the insured examined was sufficient to create an issue for the jury); see also Mahn v. Am. Life & Accid. Ins. Co., 390 S.W.2d 573 (Mo. Ct. App. 1965) (applying § 377.340 and holding that insurer has burden of showing falsity of answer given in application); Snead v. Union Life Ins. Co., 340 S.W.2d 184 (Mo. Ct. App. 1960) (applying § 377.340 and holding misrepresentations regarding “good health” not material where insured misrepresented cystitis and prostatitis and later died from a coronary occlusion).
 77 F.3d 263 (8th Cir. 1996).
 Id. at 264.
 Information supplied to the author by FDCC member Clark H. Cole of the Missouri bar, one of the attorneys involved in the case.
 21 F. Supp. 2d 1040 (E.D. Mo. 1998).
 Mo. Rev. Stat. § 376.800 (1991) (emphasis added).
 799 S.W.2d 183 (Mo. Ct. App. 1990).
 Id. at 190.
 Id. n.6.
 See also Kathryn H. Vratil & Stacy M. Andreas, The Misrepresentation Defense in Causal Relation States: A Primer, 26 Tort & Ins. L. J. 832 (1991).
 Harnett & Lesnick, supra note 4, § 4.02(4) at 4-47.
 Neb. Rev. Stat. § 44-710.14 (1989).
 Neb. Rev. Stat. § 44-358 (1928) (emphasis added).
 See Neb. Rev. Stat. § 44-502 (1998).
 Vratil & Andreas, supra note 45, at 846.
 See Zimmerman v. Continental Cas. Co., 150 N.W.2d 268, 271 (Neb. 1967); Equitable Life Assur. Soc. v. Joiner, 384 N.W.2d 636, 638 (Neb. 1986); Farm Bureau Life Ins. Co. v. Luebbe, 358 N.W.2d 754 (Neb. 1984).
 400 N.W.2d 250 (Neb. 1987).
 Id. at 256.
 150 N.W.2d 268 (Neb. 1967).
 384 N.W.2d 636 (Neb. 1986).
 Okla. Stat. tit. 36, § 2515 (1999) (emphasis added).
 See Okla. Stat. tit. 36, § 3609 (1999).
 R.I. Gen. Laws § 27-4-10 (Reenactment 1998) (emphasis added).
 See Wells v. Great E. Cas. Co., 100 A. 395 (R.I. 1917).
 Wis. Stat. Ann. § 631.11(1)(b) (West 2000).
 Utah Code Ann. § 31A-21-105 (1986).
 Tex. Ins. Code Ann. art. 21.16 (Vernon 1981).
 Yurk v. Prudential Ins. Co., 219 N.W.2d 561 (Wis. 1974); Berger v. Minnesota Mut. Life Ins. Co., 723 P.2d 388 (Utah 1986); Robinson v. Reliable Life Ins. Co, 554 S.W.2d 231 (Tex. App.), aff’d, 569 S.W.2d 28 (Tex. 1978).
 Keeton & Widiss, supra note 2, at 676, n.8.
 Id. at 676.
 Hardy v. Prudential Ins. Co., 763 P.2d 761, 766 (Utah 1988) (construing Utah Code Ann. § 31-19-8 (1974), repealed in its entirety 1985 Utah Laws ch. 242, § 58, replaced by 1986 Utah Laws ch. 204 § 138, codified at Utah Code Ann. § 31A-21-105 (1986)).
 506 S.W.2d 128 (Ark. 1974).
 Ark. Code Ann. § 23-79-107(a) (Michie 1989).
 National Old Line, 506 S.W.2d at 130-31.
 748 S.W.2d 332 (Ark. 1988).
 Id. at 336.
 Id. at 337-38 (Hays, J. and Hickman, J., dissenting).
 1989 Ark. Acts No. 662 § 1 (codified at Ark. Stat. Ann. § 23-79-107 (Michie 1987)) (emphasis added).
 1989 Ark. Acts No. 662.
 Vratil & Andreas, supra note 47, at 838.
 No. 11416, 1989 WL 148033 (Ohio Ct. App. Dec. 4, 1989), jurisdictional motions overruled, 553 N.E.2d 689 (Ohio 1990).
 Id. at *5.
 No. 1-94-11, 1994 WL 247056 (Ohio Ct. App. June 8, 1994).
 Ariz. Rev. Stat. Ann. § 20-1109 (1990).
 529 P.2d 1213 (Ariz. Ct. App. 1975).
 Id. at 1216.
 752 P.2d 1 (Ariz. Ct. App. 1987).
 Id. at 6, n.3.
 Vratil & Andreas, supra note 47, at 835.
 318 N.W.2d 456 (Mich. 1982). (See discussion of case in II, supra.)
 Id. at 461-62.
 584 A.2d 190 (N.J. 1991). (See discussion of case in II, supra).
 Id. at 197.
 748 S.W.2d 332 (Ark. 1988). (See discussion of case in V, supra).
 Id. at 335.
 848 F.2d 30 (2d Cir. 1988).
 Id. at 34 (quoting Judge Sweet of the District Court for the Southern District of New York).
 Richard J. Pautler, When the Applicant Lies, Best’s Review, July, 1991, at 50.
 799 S.W.2d 183 (Mo. Ct. App. 1990). (See discussion of case in III(B), supra).
 Id. at 195 (Flanigan, Judge, concurring).
Edgar Sentell recently retired as Senior Vice President - General Counsel of Southern Farm Bureau Life Insurance Company in Jackson Mississippi. He is a graduate of the University of Alabama where he received his Bachelor’s degree in 1963 and his law degree in 1966. Mr. Sentell has been a member of the Federation of Defense & Corporate Counsel since 1987. He has served as vice-chair of its Life, Health and Disability Section. Mr. Sentell currently serves as a Professor of Business Law and Business Ethics at Mississippi College in Clinton, Mississippi.