Bradley & Riley PC

The Iowa Supreme Court issued an opinion today that is worth a read for insurance agents and financial planners.  A summary of the case is as follows:

  • Decedent named his daughter as beneficiary of the first $35,000 of life insurance (as required under the divorce decree) and his second wife as beneficiary of the remaining life insurance policy.
  • After obligation to daughter ended under divorce decree, decedent told insurance agent to name second wife as beneficiary of entire policy.
  • Change to the beneficiary designation was evidently never completed, even though insurance agent told decedent, his second wife, and her parents on several occasions that she was the sole beneficiary of the policy
  • Decedent died and policy paid out $35,000 to daughter, remainder to second wife
  • Wife sues the life insurance agent and insurance company for negligence and negligent representation
  • District Court & Court of Appeals dismissed the claims under the theory that insurance company/agent had no duty of care to a beneficiary, only to the owner/insured under the policy
  • Iowa Supreme Court reversed those decisions and sent the case back to district court for a full trial on the issues

The Iowa Supreme Court ruled on July 6th that a duty of care can be imposed on a life insurance agent under the following circumstances:

  • Plaintiff must show he was the direct, intended, and specifically identifiable beneficiary of the policy
  • Plaintiff must also show negligence on the part of the agent
  • Plaintiff must produce evidence from the written instrument itself that the plaintiff is the intended beneficiary of the policy

The Iowa Supreme Court ruled also on July 6th that a claim of negligent misrepresentation can be imposed on a life insurance agent under the following circumstances:

  • Information was provided by the agent in the course of his business, profession, or employment
  • Information was not given for his own benefit, but was provided for the benefit of the person who received the information
  • How the information would be used and the possible harm that might result from providing incorrect information were both foreseeable

To view the complete ruling click on the link below:

For more information please contact Attorney Janice Kerkove at

Categories: Business Law

© 2024 Bradley & Riley PC. All rights reserved.