Knox v. Anderson

  • 1958 - LC - Knox v. Anderson - [BonkNote] 
    • 297 F2d 702 (CA-9 Hawaii 1961, cert. denied 270 U.S. 915 (1962) is frequently cited as the landmark case in the field of agent liability.
    • The action brought in Knox was principally founded in the tort of deceit due to the agent's grossly improper solicitation and sale of an unsuitable life insurance product to the plaintiff.

1982-1, NAIC Proceedings - Statement of the American Council Of Life Insurance Before the NASAA NAIC Joint Regulatory Insurance - 10p 

[Bonk: Statute of Limitations?]

  • Although most cases dealing with the issue of suitability have been securities cases, at least one court imposed a suitability standard on a sale of life insurance as early as 1958.
    • On appeal the court upheld a verdict against the insurance agent and stated "any insurance agent who would sell a man with ... limited income and prospects an insurance program that involved saddling him with a bank indebtedness of $125,000, an essentially term insurance type of protection, and dissipation of the accumulated cash values of his old insurance, must have known that he was not acting honestly in making the sale." Anderson v. Knox, 297 F.2d 702, 727-28 (9th Cir. 1961) cert. denied, 370 U.S. 915 (1962) - (p10)

2000 - NAIC - Suitability of Sales of Life Insurance and Annuities - 33p