Frasher v. Life Investors Insurance Co. of America

Knudson, J.,

dissenting: The majority’s reasoning that Missouri law applies is unassailable. Frasher was the insured. My quarrel is with the conclusion that the underlying policy of insurance, within the meaning of Missouri law, was issued to Frasher rather than to Dodge, the Kansas car dealer. I would adopt the reasoning expressed in Perkins v. Philadelphia Life Ins. Co., 755 F.2d 632 (8th Cir. 1985), cited by the majority.

The majority’s efforts to distinguish the circumstances at bar from those in Perkins are unpersuasive because of the explicit language of Mo. Rev. Stat. § 376.691 (Supp. 1989), which states in material part:

“Except as provided in section 376.693, no policy of group life insurance shall be delivered in this state unless it is one of the following:
“(1) A policy issued to an employer ... to insure employees of the employer for the benefit of persons other than the employer, subject to the following requirements:
“(a) The employees eligible for insurance under the policy shall be all of the employees of the employer, or all of any class or classes of such employees. . . .
“(b) The premium for the policy shall be paid either from the employer’s funds or from funds contributed by the insured employees, or from both. . . .
“(c) An insurer may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer;
“(2) A policy issued to a creditor . . . which creditor . . . shall be deemed the policyholder, to insure debtors of the creditor . . . subject to the following requirements:
“(a) The debtors eligible for insurance under the policy shall be all of the debtors of the creditor ... or all of any class or classes of such debtors. The policy may provide that the term ‘debtors’ shall include:
“a. . . . purchasers ... of goods . . . for which payment is arranged through a credit transaction;
“(b) The premium for the policy shall be paid either from the creditor’s funds or from charges collected from the insured debtors, or from both. . . .
*590“(d) The amount of the insurance on the life of any debtor shall at no time exceed the scheduled amount of indebtedness to the creditor.
“(e) The insurance may be payable to the creditor or any successor to the right, title, and interest of the creditor. Such payment shall reduce or extinguish the unpaid indebtedness of the debtor to the extent of such payment. Any excess insurance above the scheduled amount shall be payable to the second beneficiary; if there is no second beneficiary, the insured’s estate.”

I believe the above statute to be unambiguous in its treatment of group life insurance policies. Whether issued to an employer or to a creditor, policies that come within the statute should be considered sui generis as to the applicability of the Missouri suicide law. That is, regardless of which kind of group policy is considered, the words “delivery” and “issuance” used in the same statute should be defined consistently. The statute explicitly provides for delivery of the group policy with no reference whatsoever as to delivery of individual certificates. Reading this statute in conjunction with § 376.620 provides the inescapable conclusion that it is the delivery of a group policy and not an individual certificate that controls.

Finally, I note that the Missouri legislature has apparently chosen not to amend § 376.620 since Perkins.

I would affirm the district court’s decision.