Hodgson

RAYE, Acting P.J.

Purchasers of life insurance are sometimes provided interim coverage while the application for insurance is being considered by the insurer. The terms of the interim coverage are set forth in a "conditional receipt," sometimes referred to as a "`binder.'" ( Smith v. Westland Life Ins. Co. (1975) 15 Cal.3d 111, 113 , 123 Cal.Rptr. 649 , 539 P.2d 433 .) In the present matter, Michael Hodgson, father of plaintiffs Kara and Mikayla Hodgson and husband of plaintiff Carrie Hodgson, completed an application for life insurance with defendant Banner Life Insurance Company (Banner) and paid an initial premium. [1] The application included a conditional receipt. Defendants Poage Center Insurance Services and its successor, BISYS Insurance Services, (Poage) served as general agent for Banner. Within days, Banner returned the check for the initial premium and declared the conditional receipt ineffective, explaining that the company did not provide interim coverage for the policy amount sought by Michael. The company continued to process Michael's application for permanent coverage. Approximately two weeks later, Michael suffered mortal injuries in a motor vehicle accident.…

Purchasers of life insurance are sometimes provided interim coverage while the application for insurance is being considered by the insurer. The terms of the interim coverage are set forth in a “conditional receipt,” sometimes referred to as a “ ‘binder.’ ” (Smith v. Westland Life Ins. Co. (1975) 15 Cal.3d 111, 113 [ 123 Cal.Rptr. 649 , 539 P.2d 433 ].) In the present matter, Michael Hodgson, father of plaintiffs Kara and Mikayla Hodgson and husband of plaintiff Carrie Hodgson, completed an application for life insurance with defendant Banner Life Insurance Company (Banner) and paid an initial premium. 1 The application included a conditional receipt. Defendants Poage Center Insurance Services and its successor, BISYS Insurance Services, (Poage) served as general agent for Banner. Within days, Banner returned the check for the initial premium and declared the conditional receipt ineffective, explaining that the company did not *1362 provide interim coverage for the policy amount sought by Michael. The company continued to process Michael’s application for permanent coverage. Approximately two weeks later, Michael suffered mortal injuries in a motor vehicle accident.…

I concur except as to part V of the majority opinion, in which I concur in the result.

Insurance Code section 10115 (all unspecified statutory references are to the Insurance Code) provides where an applicant dies before a life insurance policy for which he has applied has been issued, the policy will be in effect as if the policy had been issued and delivered on the date of the application (all other conditions of the statute having been met) if “payment is made equal to the full first premium at the time [the] application for life insurance ... is signed by the applicant and either (1) the applicant received at that time a receipt for said payment on a form prepared by the insurer, or (2) in the absence of such a receipt the insurer receives the said payment at its home office. . . .” (Ibid., italics added.)

The parties agree Michael did not receive a receipt for payment on a form prepared by Banner at the time he signed his application, and that Banner received Michael’s personal check for the first month’s premium at its home office and returned it to him without it having been negotiated.

On these facts, the majority holds “the second requirement of section 10115 is…