In the recent case of Love v. Love, the Queen’s Bench for Saskatchewan confirmed that you can change a beneficiary designation by email – but it ultimately ruled that the email in the case before the Court did not meet the requirements for a valid declaration under Saskatchewan's Insurance Act.
The facts of the case were as follows:
Lori Love and Dennis Love were married October 9, 1976. They had four children. In 1999, Dennis designated Lori as the beneficiary of a life insurance policy worth $135,000.00. Lori and Dennis divorced in 2006.
On March 8, 2006 Dennis sent an e-mail to his employer’s HR department. The subject line of the e-mail was “Change of Beneficiary”. The e-mail contained the following communication:
“Due to my recent divorce I would like to change the beneficiary on my pension etc. (from my former wife to my son). Can you provide me with what ever paper work is required and I will fill them out and return them to you. Thanks.”
The HR Manager forwarded a Group Coverage Change Form (“the change form”) to Dennis. She did not discuss with Dennis the procedures or the importance of signing, dating and completing the form. The change form was found in Dennis’ file after his death and it was only partially completed.
Dennis died intestate on February 22, 2009. A legal battle ensued over the life insurance proceeds. The key issue before the Court was whether Dennis effectively changed the designated beneficiary on his life insurance policy in accordance with the Insurance Act.
The relevant provisions of the Insurance Act are:
152(2) Subject to section 153 [deals with irrevocable designations], the insured may alter or revoke the designation by a declaration.
The term ‘declaration’ is defined as follows:
133… (e) “declaration” means an instrument signed by the insured:
(i) with respect to which an endorsement is made on the policy; or
(ii) that identifies the contract; or
(iii) that describes the insurance or insurance fund or a part thereof;
in which he designates, or alters or revokes the designation of, his personal representative or a beneficiary as one to whom or for whose benefit insurance money is to be payable.
The Court then considered the following provisions of Saskatchewan's Electronic Information and Documents Act, 2000:
3… (b) "electronic signature" means information in electronic form that a person has created or adopted in order to sign a document and that is in, attached to or associated with the document;
4(1) This Part does not apply to:
(c) trusts created by wills;
(d) powers of attorney...
(e) documents that create or transfer interests in land and that require registration to be effective against third parties; or
(f) any other provisions, requirements, information or documents prescribed in the regulations.
14(1) A requirement pursuant to any law for the signature of a person is satisfied by an electronic signature.
In Ontario, we have a similar act called the Electronic Commerce Act, 2000.
The Court found that Dennis' email could be considered a document signed by him. It then went on to examine the effect of what was said in the email.
The Court quoted the following statement made in Norwood on Life Insurance Law in Canada:
...and the fact that an insured may write to the insurer mentioning a particular person and asking for a beneficiary declaration form may not be considered as evidence that the insured intended to benefit the person that the insured had in mind, but only as an indication that the insured was contemplating a future designation.
The Court concluded that the email on its own was not a direction within the meaning of the Insurance Act.
There was a direct reference to Dennis’ pension plan, but there was no reference to the life insurance policy which was the subject of the application. Dennis’ son argued that the word “etc.” should be construed as meaning the life insurance policy but the Court refused to go that far.
The Court stated that in order to be an effective declaration there must be a clear description of the policy affected and a clear direction with respect to the new beneficiary. In this case, Dennis just referred to “my son” without naming any one son in particular (he had three sons and one daughter). The Court said that the email reflected an indication that the Deceased was contemplating a future designation, not an effective declaration of change.
Thanks for reading.
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