Protecting Survivors of Domestic Violence within the Insurance Regime: Opportunities to Seek Termination or Variation of Insurance Contracts

Abstract

A person whose life is insured under a life insurance contract for the benefit of another person does not have a contractual or common law right to terminate or otherwise affect the terms of the contract. As well, such contracts remain valid even after termination of the relationship that provided an insurable interest at the commencement of the contract. The existence of a life insurance contract might provide an incentive for the policy owner/beneficiary to cause harm to the insured person in order to collect the insurance money. Recovery of the insurance money is precluded on grounds of public policy if the beneficiary is found liable for the death of the insured person. However, this is no comfort for the victim; indeed, this situation has the potential to create or exacerbate the vulnerability of victims of domestic violence, who are mostly women and children. Manitoba, British Columbia and Alberta have enacted provisions entitling persons whose lives are insured to seek judicial remedies aimed at alleviating the safety concerns in specified circumstances, notwithstanding the applicant's lack of privity of contract. This paper examines the bases and nature of the remedial options and explores how they can effectively protect persons whose lives are insured for the benefit of the policy owner and the appropriate threshold for granting remedies. Applicants may seek remedies under the insurance legislation in conjunction with protection orders in the family or criminal context. Courts are likely to assess similar factors when considering appropriate remedies under the insurance and family law regimes. Although these remedies are not a panacea for domestic violence, they may be significant in preventing violence against women and children whose lives are insured by other family members and where the latter's motivation for violence may include recovery of insurance money.

Keywords: life insruance contract, domestic violence