South-Western Legal Studies in Business

Insurer Has No Duty to Provide Details to Applicant of Health Test Results
Description Appeals court held that a life insurance company had no duty to reveal to a policy applicant the details of blood and urine sample tests used to help set policy rates.
Topic Insurance
Key Words

Life Insurance; Duty to Disclose; Medical Tests

C A S E   S U M M A R Y
Facts McLachlan had life insurance with New York Life (NYL). He applied to increase his coverage. As part of the application, he was required to submit blood and urine samples to help determine the premium. The lab report to NYL showed McLachlan had high alkaline phosphate levels and an elevated creatinine level. NYL told McLachlan his rate would be higher because of the phosphate levels, but did not mention creatinine. McLachlan accepted the insurance and told his doctor of the phosphate. His doctor monitored that but not creatinine. The level of creatinine rose and caused kidney failure, which necessitated a transplant. McLachlan sued NYL for negligence for failure to disclose the test results. The district court dismissed the suit. McLachlan appealed.

Affirmed. The insurer-insured relationship does not give rise to a fiduciary duty in Louisiana. Further, there was no privity between the parties as to the future policy. NYL owed no duty to disclose to McLachlan the details of all tests. The purpose of the tests was to determine insurance rates, not provide medical information for McLachlan. NYL told McLachlan his policy rate would be high due to phosphate levels, which put him on notice of a health problem, but NYL was not responsible for providing detailed health information nor even assuring that the test results were accurate.

Citation McLachlan v. New York Life Insurance Co., 488 F.3d 624 (5th Cir., 2007)

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