Sansfaçon, Lavallée, Baudouin

Appeal from a judgment of the Superior Court granting an application claiming life insurance benefits. Dismissed.

On October 23, 2015, the appellant insurance company issued to its insured a new $1.5 million life insurance policy for a 20-year term. The insured committed suicide on February 19, 2018.

The trial judge declared that the [translation] “Suicide” exclusion clause under the [translation] “General provisions” of the insurance contract was null and did not apply to the respondents, the beneficiaries of the insured’s life insurance. The judge held that the clause violated the requirements set out in article 2404 of the Civil Code of Québec (S.Q. 1991, c. 64) (C.C.Q.).

Article 2404 C.C.Q. must be read together with article 2441 C.C.Q. and, more broadly, with all the provisions of the Code relating to the law of insurance of persons. Thus, an insurer may not refuse payment of the sums insured by reason of the suicide of its insured unless the insurer expressly stipulated in the insurance contract that coverage would be excluded. In such case, the exclusion applies only if the suicide occurs within a period of two years of uninterrupted insurance. The insurer may limit the scope of this exclusion to a shorter period but cannot lengthen the scope beyond this period.

In this case, the judge did not err in finding that the [translation] “Suicide” exclusion clause was not indicated by a heading as per the requirements of article 2404 C.C.Q. The purpose of this provision is to clearly indicate to the insured the limitations of the coverage provided and to draw the insured’s attention to the existence of any coverage limitations. Its purpose is not to protect the insured from obscure, illegible, or confusing clauses. This protection is already provided through the contra proferentem rule introduced by article 1432 C.C.Q.

There is no need to disregard the principles set out in Lemay c. Assurance-vie Desjardins (C.A., 1988-02-09), SOQUIJ AZ-88011293, J.E. 88-351, [1988] R.J.Q. 659, [1988] R.R.A. 185 (sum.) whereby the insurer is responsible for highlighting and drawing attention to the effects of the exclusion clause. A purposive interpretation of article 2404 C.C.Q. reveals the legislative objective, which is to require that insurers group exclusion clauses and clauses reducing coverage under an appropriate heading to make it easier for the insured to locate them. The comments of the Minister of Justice, the scholarly commentary, and the case law confirm this interpretation. In this case, the heading [translation] “Suicide” does not disclose the fact that the insurance coverage is totally excluded if the suicide occurs within two years of the making of the contract.

Contrary to what the judge concluded, article 2404 C.C.Q. does not require that every clause related to every type of coverage be grouped in the same location. However, this conclusion does not affect the outcome of the dispute. Under article 2404 C.C.Q., every exclusion or reduction clause relating to the same coverage must be grouped under the same appropriate heading so that they are easier to locate, which was not the case here. The derogation from article 2404 C.C.Q, a public order provision, means that the exclusion clause is null.

Last, the judge did not commit a palpable and overriding error in finding that the insurer was in default for failing to pay the sums insured within 30 days after receipt of the required proof of loss (article 2436 C.C.Q.). Receiving the coroner’s report following the investigation into the insured’s death would not have changed anything.

Legislation interpreted: article 2404 C.C.Q.

Text of the decision: http://citoyens.soquij.qc.ca