Adams v. STATE CAPITAL LIFE INSURANCE COMPANY

Annotate this Case

182 S.E.2d 250 (1971)

11 N.C. App. 678

Doris Womack ADAMS v. STATE CAPITAL LIFE INSURANCE COMPANY.

No. 7110SC311.

Court of Appeals of North Carolina.

July 14, 1971.

Certiorari Denied September 7, 1971.

*251 William T. McCuiston, Raleigh, for plaintiff appellant.

Young, Moore & Henderson by B. T. Henderson, II, Raleigh, for defendant appellee.

Certiorari Denied by Supreme Court September 7, 1971.

CAMPBELL, Judge.

There was no dispute as to the facts involved, and since there was not presented any genuine issue as to any material fact, summary judgment was the correct procedure. G.S. ยง 1A-1, Rule 56.

An application for insurance is a mere offer, which must be accepted before a contract of insurance can come into existence. Silence and inaction do not amount to an acceptance of an offer. No inference or presumption of acceptance can be drawn from mere delay or inaction by the insurer in passing on the application in the absence of additional circumstances. Bryant v. Occidental Life Insurance Co., 253 N.C. 565, 117 S.E.2d 435 (1960).

*252 At most the evidence on behalf of the plaintiff shows a conditional payment of the first premium. This would not constitute a contract of insurance. The conditional receipt attached to the original application and which Agent Dunn referred to when he told the plaintiff that her check would serve as a conditional receipt stated:

"* * * If the application be unconditionally approved by the Company at its Home Office on the plan, for the amount and at the premium rate applied for, and if also the applicant at the date of the application or the medical examination whichever is the later date, is an acceptable insurable risk under the Company's rules, the insurance so applied for shall be effective from such later date. * * *"

In Cheek v. Pilot Life Insurance Co., 215 N.C. 36, 1 S.E.2d 115 (1939), it was held that a receipt does not of itself constitute a contract of insurance. "`* * * If the application is not accepted in the proper exercise of the company's right, and the insurance, therefore, is refused, the binding slip ceases eo instanti to have any effect. It does not insure of itself, but is merely a provision against any illness supervening it, if there is afterwards an acceptance of the application, upon which it depends for its vitality.' The contract of insurance becomes effective upon approval of the application at the home office and the delivery of the policy is not a prerequisite." The undisputed evidence in this case established the fact that the application was never accepted by the defendant, and there was no evidence that in making the determination not to accept the application, the defendant company acted unreasonably, arbitrarily, or in bad faith. See McLean v. Life of Virginia, 11 N.C.App. 87, 180 S.E.2d 431 (1971).

Affirmed.

MALLARD, C. J., and HEDRICK, J., concur.