Expect Focus has previously reported on a number of federal court decisions rejecting plaintiffs’ theory that in checking the “no” box beside a smoking question in a life insurance application, they reasonably expected that the insured would be provided a non-smoker premium rating as opposed to a less favorable “standard” rating (see Expect Focus, Vol. I Winter 2009; Vol. IV, Fall 2008). On April 9, 2009, Judge Madeleine M. Landrieu of the Civil District Court of the Parish of Orleans in Louisiana issued an order dismissing identical claims and agreeing with those decisions that merely answering a tobacco question in the negative on a life insurance application “does not create an obligation for the Defendants to provide such rates.”
In Finnan v. Pan American Assurance Company, the court discarded plaintiffs’ common law claims (breach of contract and negligent misrepresentation) because “[n]o evidence was presented to suggest that the insurer charged a rate distinguishing juvenile smokers from juvenile non-smokers or that there was any such thing as a ‘non-smoker’ discount for juveniles.” Due to the removal of the judge initially assigned to the case and the chaos created in New Orleans by Hurricane Katrina, the case took a lengthy, circuitous path; during the delay caused by these events, federal court cases rejecting these claims were decided. Following closely Pan-American’s briefing, Judge Landrieu cited the strong federal court precedent and concurred with the “central holding” of these prior decisions while also dismissing two statutory causes of action as inapplicable to plaintiffs’ factual assertions.