Insurers Entitled To Rely On Additional Reasons Post-Declinature

The High Court has confirmed that insurers will not be limited to the initial reasons listed for declinature, and may rely on misrepresentations subsequently made by an insured.

In the recent case of Houlihan v Friends First Life Assurance Company Limited, the High Court has confirmed that an insurer was entitled to rely on additional reasons for declining liability under a policy, which were not included in the original declinature letter and were only raised in the context of the coverage proceedings. 

The policy at the centre of the dispute was an income protection plan which provided cover for disability if the insured was totally unable to carry out his normal occupation due to a recognised illness or accident and was not involved in carrying out any other occupation for profit, reward or remuneration.  The plaintiff ceased work in April 2009 due to medical difficulties after approximately 19 years of continuous employment and submitted a claim in September