Limits for cancelling life insurances
Much has been spoken about some insurance companies that cancel group life insurance policies executed several years ago in which the insured – normally employees or ex-employees of the companies contracting the insurance (the so-called estipulantes (legal entities contracting the insurance for the benefit of the insured and vested with representation powers before the Insurance Company) – have been strictly paying premiums on a monthly basis. The fact is already public and widely known, once several insured groups filed actions in Court and obtained favorable provisional remedies, judgments and appellate determinations to maintain said insurance contracts. The situation is the following: the insured receives a letter from the insurance company informing that, as of a certain date, the policy will no longer be valid. Sometimes, the letter contains a proposal for a new insurance, normally with a significant higher premium value and an extremely lower value for the insured capital. Many times, as in the case of some groups composed of retired ex-employees, no proposal is offered. The insurance companies simply allege that they are grounded on contract clauses allowing that the contract is extinguished upon the end of each term, pursuant to a 30 day prior notice given by any of the parties and informing the lack of interest in renewing the same. The insurance companies simply allege to whoever asks for further explanations that the insurance contract is not perpetual, but will have a determinate term, which enables the failure in renewing it upon the end of its term; however, the situation at issue is not that because we are not referring to contracts for a determinate term, but to contracts for an indeterminate term that have been renewed as of the beginning, without any of the parties pronouncing themselves otherwise. As professor Cláudia Lima Marques well referred to, they are the so-called long-term captive contracts in which the insured expects that the agreement is maintained according to the principle of objective good faith making unfeasible cancellation or failure of renewal, as wished. Thus, for such reason, contract clauses and even legal provisions alleged by insurance companies have not been accepted by the Judiciary – because they are contrary to the lawful interests of thousands of insured that have been regularly paying for years the premium value in the legal and fair consideration of the contracted coverages, which has already been consolidated in precedents at the 26th Chamber of Private Law of the Higher Court of Justice of São Paulo (TJSP). Actually, the Judiciary has been acknowledging the undisputed, legal and certain right of thousands of insured parties, mainly those retired, ensuring them the continuance of the insurance contract, under the same previous conditions, in consideration of the monthly premium payment under the same conditions it has always been done, but clearly with the necessary adjustments. Our courts have been adopting articles 421, 422 and 423 of the Civil Code as legal grounds, which ratify the principles of the social role of the contract, probity and objective good faith, grounded on the Federal Constitution. Specifically, in the case of the retired, the Elderly Statute has been applied, along with the warning that it would be very comfortable for the insurance companies to, throughout the years when the casualty rate was knowingly lower, be benefitted from the payment of premiums by their insured, and then, after years elapsed and a greater possibility of a harmful event, they simply cancel or do not renew the insurance contract, without offering any reasonable justification. Nevertheless, even if such group life insurance policies are considered to have a determinate term, are annually and automatically renewed, there is another legal impediment for cancellation. Article 774 of the Civil Code sets forth that "the tacit contract renewal for the same term pursuant to express contract clause cannot occur more than once”. In fact, if such policies were not for an indeterminate term, according to the article above, the sole possible automatic renewal after the new Civil Code became in force would be in 2003; however, most of those policies remained in force, i.e., they were automatically renewed without any questioning or notice otherwise by the contracting parties after 2003. Thus, the insurance contract that has been remained in force, with the tacit acceptance from the parties for decades, and in 2004, the policy failed to be annual and thereafter has become an indeterminate term policy, superseding and making null the clause setting forth the renewal as a rule and thus hindering the cancellation. Also, article 801, paragraph 2, of the Civil Code should be noted; it provides that the group life insurance must have the consent from three quarters of the insured group. As we are referring to long-term contracts for indeterminate term, article 801 of the Civil Code should be equally construed, once if the rule provides a condition necessary for modifying the policy, for the purposes of cancellation - a much more burdensome act for the insured – it would not be reasonable to waive the requirement. Thus, from any viewpoint used to analyze the issue, we draw to the conclusion that the clause alleged by such insurance companies to cancel or not to renew the policies should be considered as not written, and the contract should remain in force under the same conditions and with the same guarantees for the insured. We cannot forget that all is grounded on article 1, item III of the Federal Constitution that ratifies the principle of human dignity, from which the principle of objective good faith derives, determining that the parties behave on a correct, transparent and loyal basis that has been certainly not occurring on the part of some insurance companies.