Insurance, Misrepresentation, Causation, and Statutory Rescission
By Kathryn Sampson · October 9, 2010 · 2010 Ark. L. Notes
In categories: Insurance Law
Arkansas’s rescission statute, Arkansas Code Annotated § 23-79-107, codifies misrepresentation law and is relevant to applications for life or health insurance. Section 23-79-107 becomes an issue when a policy holder of a life or health insurance policy makes a claim for benefits. The carrier engages in an investigation and discovers evidence the policy holder’s attestations of health were incomplete or inaccurate at the time she applied for insurance. The carrier then denies the claim and files an action for rescission, arguing that misrepresentation voids the policy. Alternatively, the carrier denies the insurance claim; the policy holder files an action for breach of contract; and the carrier raises misrepresentation as an affirmative defense.