(August 2 – 13:05 ET) – A life insurer has been ordered to pay off on a policy held by a dead drug trafficker.
Transamerica Life Insurance Company of Canada lost an appeal yesterday of a judgement delivered back on December 18, 1998. The insurance company claimed it shouldn’t have to pay out on a life insurance policy for a drug trafficker who died when the packages containing cocaine burst in his stomach, killing him. The company claimed that he should effectively be barred from benefiting from his crime.
Paul Oldfield bought a $250,000 policy from Transamerica in 1993, naming his wife as beneficiary. On April 27, 1996, he died in Bolivia after the rupture of one of 30 bags or condoms of cocaine, which were found in his stomach. The death was ruled accidental.
Although Oldfield and his wife separated in 1995, he agreed to keep the policy in force in lieu of child or spousal support. The policy was in force when Oldfield died, but Transamerica refused to pay. “There is nothing ambiguous about the insurance contract,” the appeals judge wrote, “As Mr. Oldfield died while the policy was in force, Transamerica is contractually obligated to pay Mrs. Oldfield the face amount of the policy.”
The judge found that because the death was accidental, even though it was caused by a criminal act, the policy must be paid. The judge notes that under the Insurance Act only deliberate criminal conduct intended to trigger the insurance payoff automatically voids a policy.