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INA LIFE INSURANCE COMPANY v. COMMONWEALTH PENNSYLVANIA (08/11/77)

decided: August 11, 1977.

INA LIFE INSURANCE COMPANY, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, INSURANCE DEPARTMENT AND WILLIAM J. SHEPPARD, INSURANCE COMMISSIONER, RESPONDENTS



Appeal from the Order of the Insurance Commissioner in case of In the Matter of: INA Life Insurance Company Forms 76RL24, 76RL25 and 76RL28, Docket No. R76-6-2.

COUNSEL

S. Walter Foulkrod, III, with him Pepper, Hamilton & Scheetz, for petitioner.

Barbara Anne Brown, Assistant Attorney General, with her John H. Isom, Assistant Attorney General, Guy J. DePasquale, Assistant Attorney General, and Robert P. Kane, Attorney General, for respondents.

President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Judge Kramer did not participate in the decision. Opinion by President Judge Bowman. Judge Kramer did not participate in the decision in this case.

Author: Bowman

[ 31 Pa. Commw. Page 417]

INA Life Insurance Company (INA) submitted for approval to the Insurance Department (Department) three policy forms offering double indemnity accidental death benefits that it planned to offer as riders to its standard life insurance policies.*fn1 Included

[ 31 Pa. Commw. Page 418]

    in the proposed riders was the following limitation or condition:

INDEMNITY. If the Insured sustains an accidental bodily injury while insured under this policy which results, directly and independently of all other causes and within 365 days of the accident causing such injury, in the Insured's death, the Company agrees to pay . . . upon receipt at its Administrative Office of satisfactory proof of death, the amount of Accident Indemnity. (Emphasis added.)*fn2

A Department rate and policy examiner rejected these riders on the ground, inter alia, that said 365 day limitation conflicted with a statement of policy issued by the Insurance Commissioner (Commissioner) in conjunction with proposed regulations appearing at 4 Pa. B. 1924 (September 7, 1974). Said statement of policy provided, in pertinent part:

The Pennsylvania Supreme Court, in Burne v. Franklin Life Insurance Company, 451 Pa. 218, 301 A.2d 799 (1973), held that a policy provision that accidental death benefits would be payable only if death occurred within 90 days from the date of the accident was contrary to public policy and unenforceable. The Court further held that such provision was not applicable where there was no dispute as to the cause of death. The Court's opinion also contained dicta against any time period limitation restricting recovery of accidental death benefits where death is caused by accident.

[ 31 Pa. Commw. Page 419]

In response to the request of the Insurance Commissioner, the Attorney General issued an opinion on April 26, 1974, Pa. B. 962, May 11, 1974, [Atty. Gen. Op. No. 22] that the Insurance Commissioner may disapprove any policies 'which purport to ...


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