Paul S. Ranes, M.D. v. The Paul Revere Life Insurance Company

We must decide whether an insurer may be estopped from denying disability coverage for unreasonable delay in processing the insured’s application.

I

In January 1989, Paul Ranes, a surgeon living in Washington State, applied for disability insurance with Paul Revere Life Insurance Company. The application had two parts. Part I required general health and financial information, which Ranes completed on January 3. Part II was a medical form asking for more detailed health information. The application stated: “The insurance applied for will not take effect unless the issuance and delivery of the policy and payment of the first premium occur while the health of the Proposed Insured remains as stated in the Application.” It also provided that: “Applicants will be informed whether or not their application has been accepted within 60 days or be given the reason for any further delay.”

Ranes completed Part II of the application on January 26,1989, during a medical examination required by Revere. On the medical form, Ranes indicated that he had an impairment of his eyes. For twenty-five years he had had occasional flare-ups of iritis and in the previous five years had been treated for…