Lindstrom v. Aetna Life Ins. Co., 55225

• Decision Date: 17 January 1973
• Docket Number: No. 55225,55225
• Citation: 203 N.W.2d 623
• Parties: Mary Lou LINDSTROM, Appellee, v. AETNA LIFE INSURANCE COMPANY, Appellant.
• Court: Iowa Supreme Court

Page 623

203 N.W.2d 623

Mary Lou LINDSTROM, Appellee, v. AETNA LIFE INSURANCE COMPANY, Appellant.

No. 55225.

Supreme Court of Iowa.

Jan. 17, 1973.

Gleysteen, Nelson, Harper, Kunze & Eidsmoe, Sioux City, for appellant.

McDonald, Sayre & McDonald, Cherokee, for appellee.

Heard before MOORE, C.J., and LeGRAND, UHLENHOPP, REYNOLDSON and McCORMICK, JJ.

REYNOLDSON, Justice.

Plaintiff as beneficiary named by an insured under a group accidental death and dismemberment policy, instituted this action against the insurer, Aetna Life Insurance Company, to recover a $10,000 accidental death benefit. Uncontroverted facts were developed by pleadings and cross-motions for summary judgment. Trial court sustained plaintiff's motion and granted her judgment against Aetna for $10,000, interest and costs. Aetna appeals and we reverse.

March 31, 1966, Aetna issued to Western Auto Supply Company, a Missouri corporation, group life insurance policy No. GL--313379 and a policy of group accidental death and dismemberment coverage designated as policy No. GC--313379. These policies were delivered at the Missouri home office of Western Auto, the designated policyholder, and were to provide coverage for proprietors of Western Auto's associated stores.

On August 24, 1966, Daryl D. Lindstrom (plaintiff's husband), proprietor of an associate store at Cherokee, Iowa, signed and delivered to Western Auto a request for the group coverage. Pursuant to the request, Western Auto mailed from Missouri to Lindstrom at Cherokee a 'Group Insurance Certificate.' This certificate was executed by Aetna and furnished by it to Western Auto.

Lindstrom disposed of his interest in the Cherokee store on December 15, 1969. In this situation the applicable provision of the master policy, made a part of the certificate, terminated the accidental death and dismemberment coverage, '* * * on the last day of the calendar month in which the individual ceases to be within a class of individuals eligible for insurance under the group policy * * *.'

Reference must now be made to chapter 509, The Code, entitled 'Group Insurance,' and specifically to the following statute:

'509.2 Provisions as part of group life policy.

'No policy of group life insurance shall be delivered in this state unless it contains in substance the following provisions * * *:

'8. A provision that if the insurance * * * on a person covered under the policy ceases because of termination * * * of membership in the class * * * eligible for coverage under the policy, such person shall be entitled to have issued to him by the insurer, without evidence of insurability, an individual policy of life insurance * * * provided application for the individual policy shall be made, and the first premium paid to the insurer, within thirty-one days after such termination * * *.

'10. A provision that if a person insured under the group policy dies during the period within which he would have been entitled to have an individual policy issued to him in accordance with subsections 8 or 9 above and before such an individual policy shall have become effective, the amount of life insurance which he would have been entitled to have issued to him under such individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium therefor has been made.'

Daryl D. Lindstrom sustained death in an auto accident on January 31, 1970. He had exercised no conversion privileges under either the group life or the group accidental death and dismemberment policies. The group life policy contained contractual provisions almost identical with the above quoted statute. Aetna paid the $10,000 life insurance benefit to this plaintiff as named beneficiary.

No such contractual provision was included in the accidental death and dismemberment policy. By its terms, coverage terminated on December 31, 1969. Plaintiff's claim based on this policy was denied by Aetna.

In essence, Aetna contends trial court erred in holding: 1) the accidental death and dismemberment policy was life insurance within the meaning of § 509.2, The Code, 2) delivery of the certificate constituted delivery and completion of the contract, and 3) consequently Iowa law applied and the provisions of that statute (quoted above), read into the policy, provided coverage for Lindstrom at the date of his death and justified judgment for plaintiff.

I. We recognize, as did trial court, that insurance policies, including group policies, are to be construed in favor of the individual insured. Eckard v. World Insurance Company, 250 Iowa 782, 96 N.W.2d 454 (1959); Zeigler v. Equitable Life Assur. Soc., 219 Iowa 872, 259 N.W. 769 (1935). This case, however, presents not the problem of construing a policy's provisions, but an issue of statutory construction and conflict of laws. We also set aside the question whether the insurance in question was group life insurance (if so, concededly governed by § 509.2, The Code) or group accident insurance governed by other sections in chapter 509. We have stated an accident policy, in respect to the amount to be paid upon death, is essentially a policy of life insurance, Kellogg v. Iowa State Traveling Men's Ass'n, 239 Iowa 196, 29 N.W.2d 559 (1947); Wahl v. Interstate Business Men's Acc. Ass'n, 201 Iowa 1355, 207 N.W. 395 (1926). However, our result in the instant case does not require us to decide the applicability of that rule.

II. Vital to this decision is the question whether Missouri law or Iowa law shall be applied. Assuming the coverage was group life insurance, if Iowa law is to control, then under § 509.2(8) and (10) the insurance was still in force at Lindstrom's death. If Missouri law is to apply, no benefits are available under this group policy. It is conceded Missouri has no statutory or common law requiring that all group life policies or policies for payment of accidental death benefits include conversion privileges comparable to those specified in the above Iowa statute.

In Iowa, as elsewhere, the field of insurance is intensely regulated by statute. We must now determine the legislature's intent in chapter 509, The Code, and specifically § 509.2, which provides 'No policy of group life insurance shall be delivered in this state unless it contains * * *' those provisions relied on by plaintiff. In construing such statutes we of course search for the legislative intent as shown by what the legislature said, rather than what it should or might have said. Rule 344(f)(13), Rules of Civil Procedure.

As indicated by its title, chapter 509 relates only to group insurance. Section 509.1, entitled 'Form of policy,' states 'No policy of group life, accident or health insurance shall be delivered in this state unless it conforms to one of the following descriptions: * * *.'

There follows lengthy, detailed and complex restrictions on such insurance, limiting who may be a policyholder, who may qualify as an insured, and related matters, including those regarding premium payments. As noted above, § 509.2 is then entitled 'Provisions as part of group life policy.' We have already set out those portions of that section which now concern us.

The preliminary inquiry must be whether the certificate mailed to Lindstrom in Iowa was such an essential part of the contract that the situation falls within the statutory prohibition against delivery in this state of a policy not containing the § 509.2 provisions.

Plaintiff, vigorously supporting the significance of the certificate, relies on its delivery in Iowa, its execution by Aetna, and the fact Aetna was licensed to do business in this state. Such emphasizes the group policy provision which states, 'The Insurance Company will issue to the policy holder for delivery to each insured individual, an individual certificate, setting forth a summary of the essential features of the insurance coverage to which the individual is entitled and stating to whom the benefits are payable.' She argues there could be no insurance in effect insuring the life of Lindstrom until delivery of the certificate to him in Iowa.

Aetna contends the certificate was informational only and not part of the insuring contract. It relies on language in the master policy specifying the policy was delivered in Missouri and that, 'This policy is a contract between the Policyholder (Western Auto Supply Company) and the Insurance Company and shall be construed in accordance with the law of Missouri.' It further asserts the following portions of the certificate support its position:

'GROUP INSURANCE CERTIFICATE

'AETNA LIFE INSURANCE COMPANY

'HEREBY CERTIFIES that Group Policies Nos. GL--313379 and GC--313379 have been issued to

'WESTERN AUTO SUPPLY COMPANY

'to insure certain individuals who meet eligibility and other requirements as set forth in the group policies.

'The group policies are contracts between the Policyholder and the Insurance Company and shall be construed in accordance with the law of Missouri, where they were delivered.

'The insurance described in this Certificate is provided under and is subject in every respect to all of the terms of the group policies which alone constitute the contracts. The obligations under the group policies of the Insurance Company and the rights under the group policies of all persons will be determined by the terms of the group policies. * * * Certain terms of each of the group policies are described on this and the following pages of this Certificate.'

Other facts deemed controlling by Aetna are: the policy was delivered in the state of Missouri to the policyholder Western Auto Supply Company, a Missouri corporation, at its headquarters in Missouri; the policy was written by Aetna's agent in Kansas City, Missouri, and was filed with the Missouri insurance commissioner.

We cannot agree it was the...