Section 21 Penalties Based on Knowledge or Conduct of Insurance Agent

• Library: Damages 2012

As with many other issues concerning application of the vexatious penalty statutes, the cases are not consistent concerning whether penalties can be imposed based on the knowledge or conduct of the insurance agent. Many cases hold that the knowledge of the insurance agent is imputed to the insurer in determining whether it can avoid coverage because of concealment or misrepresentations in making the application for insurance. Several cases, however, also hold that this imputed knowledge is not sufficient to base an award of vexatious penalties on. In State ex rel. John Hancock Mut. Life Ins. Co. v. Hughes, 152 S.W.2d 132 (Mo. 1941), there was a judgment for vexatious penalties based on evidence that the insurance agent knew of the decedent’s true health condition but did not incorporate the information into the insurance application. The Supreme...