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Brief introduction to the policyholder's obligation to answer the preliminary questionnaire
In previous publications we have already dealt with the legal obligation of the policyholder to give clear and truthful answers to the questionnaire submitted by the insurance company prior to the formalisation of an insurance contract between the parties and we have referred to the question of what the policyholder's duty to provide information actually entails.
In this sense, the matter seems to be regulated quite clearly in Article 10 of the Spanish Insurance Contract Law (hereinafter, ‘LCS’). This precept establishes the obligation of the policy holders to answer, before the completion of the insurance contract, the questionnaire that the insurance company submits to them, clearly and truthfully, whenever this questionnaire refers to circumstances that can influence the evaluation of the risk. We are not going to reproduce in this article the whole of the legislation on the subject, which is extensive and technical, but we can make a brief summary of the different nuances that, in accordance with the legal text, can be made to this obligation:
i) The policy holders are exempt from the obligation when the insurer does not submit the questionnaire to them or does not include certain details in it.
ii) If there is fraud or serious fault on the part of the policy holder, the insurance company is released from the obligation to pay the corresponding compensation.
iii) The insurance company can cancel the contract by notifying the policy holder within a period of one month of becoming aware of the inaccuracy.
Having made this introduction, we can state, by way of summary, that it seems clear that the spirit of the law indicates that the policy holder is obliged to answer the questions that the insurance company submits through a questionnaire, which are relevant for the evaluation of the risk. Thus, in the event of a reservation or inaccuracy, the company will have the possibility of cancelling the contract and will also be exonerated from the payment of the benefit when there has been fraud or serious fault on the part of the policy holder in the declaration.
The Spanish Supreme Court Decision (STS) No. 913/2023, of 8 June
Having said this, we will now examine the factual situation that concerns us in this publication. The particularity of this case lies in the fact that the policyholder took out a life insurance policy with a well-known Spanish insurer in 2013, in order to guarantee the repayment of a bank loan. In accordance with the legislation mentioned in the previous section, the insurer submitted a prior health questionnaire to him, in which he denied having suffered from any illness, sequelae of surgery or accident, expressly answering that he had not undergone medical treatment in the last seven years and that he did not have a history of high blood pressure, nervous system, digestive, endocrine (including diabetes) or blood, urinary or prostate disorders.
In view of the negative answers to the questionnaire, there was no obstacle to the formalisation of the insurance contract between the parties, but once the policy was in force, the policyholder was diagnosed with a myelodysplastic syndrome which finally led to his death. The litigation began when the policy holder's widow claimed payment of the insured sum from the insurance company, which the company refused, alleging that, in view of the policy holder's medical history, the latter had knowingly and willingly been untruthful in his answers to the questionnaire, having concealed his numerous previous pathologies, since he had suffered from, among others, hypertension since 1998, stroke in 1998, dyslipidaemia since 1998, diabetes since 2002, prostatic hypertrophy and sleep apnoea, having answered negatively to the questions on all these pathologies in the questionnaire, knowing that he was not telling the truth.
The insurance company argued that this voluntary concealment of the policyholder's medical history of pathologies and sequelae undoubtedly fell under the assumption of ‘wilful misconduct or gross negligence’ of art. 10 LCS, entitling the company not to pay the compensation. However, the widow continued with the proceedings and the First Instance Court agreed with her. Against this judgement, the insurance company lodged an appeal and the Provincial Court of Jaén again found in favour of the claimant. Finally, the insurance company lodged an appeal in cassation with the Supreme Court, which finally dismissed the appeal and ruled in favour of the plaintiff, for the reasons set out below.
The insurance company states in its cassation appeal that the concealment of all the pathologies by the policyholder undoubtedly implies the existence of malice or gross negligence, given that these pathologies are of such a nature that, had the insurer known them, it would not have accepted to take out the life insurance policy, at least in the terms in which it was taken out. The argument of the insurance company is therefore centred on the fraudulent concealment of the reality on the part of the policy holder, which is connected with the traditional regulation of fraud in our Civil Code (hereinafter ‘CC’). Thus, it is stated in art. 1269 CC that ‘there is fraud when with insidious words or machinations on the part of one of the contracting parties the other is induced to enter into a contract which, without them, he would not have done’.
However, the Supreme Court considers it proven that the policyholder died as a result of a type of leukaemia that was diagnosed during the contract and, fundamentally for the resolution of the lawsuit, that this pathology has nothing to do with the previous pathologies suffered by the policyholder. The Supreme Court thus cites its own case law (STS 345/2020, among others), when it establishes the requirements for assessing a breach of the duty of fair declaration by the policyholder, the last of these requirements being ‘that there is a causal relationship between the omitted circumstance and the risk covered’.
Thus, the Supreme Court considers that it is accredited by the intervention of different professionals that there was no causal relationship between the different pathologies that the policyholder had suffered from previously and did not declare in the previous questionnaire and the pathology that finally led to his death, which was diagnosed two years after the insurance contract came into force.
As for the assertion of the insurance company that, had it known the clinical condition of the policy holder, the company would have refused to conclude the contract, due to the very high morbidity inherent in such a condition, converting the policy holder into an ‘uninsurable risk’, the High Court considers that the insurance company has not provided sufficient proof of this circumstance.
Conclusion:
Art. 10 LCS establishes the obligation of the policy holders to respond truthfully to the questionnaire that the insurance company submits to them prior to the formalisation of the insurance contract, on those circumstances that may be relevant for the assessment of the risk. Inaccuracy empowers the insurance company to cancel the contract by notifying the policy holder within one month of becoming aware of it. Likewise, the existence of fraud or serious fault on the part of the policy holder releases the insurance company from the payment of the benefit.
Notwithstanding the above, the Supreme Court considers in its Ruling 913/2023 that, coherently with the jurisprudence contained in previous rulings, in order to appreciate a breach of the duty of loyal declaration on the part of the policy holder contained in art. 10 LCS, it is necessary that there be a causal link between the circumstance that has been concealed in the questionnaire and the risk covered. In this case, as there is no causal link between the omitted circumstance and the risk covered, the insurance company cannot be exonerated from the payment of the benefit.
From the Insurance Law Department of Belzuz Abogados, we are at your disposal to analyse and defend your problem in matters of civil liability and insurance in the most professional and efficient manner.
Adrián Macias Catalina
Departamento Direito dos Seguros | Madrid (Espanha)
Belzuz Abogados SLP
A presente Nota Informativa destina-se a ser distribuída entre Clientes e Colegas e a informaçăo nela contida é prestada de forma geral e abstracta, năo devendo servir de base para qualquer tomada de decisăo sem assistęncia profissional qualificada e dirigida ao caso concreto. O conteúdo desta Nota Informativa năo pode ser utilizada, ainda que parcialmente, para outros fins, nem difundida a terceiros sem a autorizaçăo prévia desta Sociedade. O objectivo desta advertęncia é evitar a incorrecta ou desleal utilizaçăo deste documento e da informaçăo, questőes e conclusőes nele contidas.
