The insurer is obliged to implement its death coverage after the termination of the group providence contract if the disability began beforehand, regardless of whether the said disability is covered by another group insurance contract.
This is what the Second Civil Chamber of the French Cour de Cassation ruled in a decision dated 21 September 2023 (Case No. 21-22.197). In this case, an employer had taken out a group providence contract with an insurer in 2003 for its senior management employees. Disability and incapacity cover were taken out with another insurer.
In January 2013, the employer terminated the group pension contract and took out a new contract with another insurer.
One of its employees became unable to work in 2011, two years before the group contract was terminated. He died in October 2013.
When the employee’s insurers (both the first and the second) refused to cover the consequences of his death, the employee’s heirs took the matter to court.
The question arose as to whether the first insurer owed its death coverage when the death occurred after its cancellation and the disability was covered by another insurer.
Confirming the appeal decision, the Cour de cassation replied in the affirmative on the basis of Article 7-1 paragraph 1er of Law no. 89-1009 of 31 December 1989, known as the “Loi Evin”, amended by Law no. 2001-624 of 17 July 2001, which states that:
- Death coverage cannot be suspended in the event of the employee’s incapacity for work or disability
- Termination of the collective providence insurance contract has no effect on the continuation of this cover when the death occurs while the employee was incapacitated or disabled.
In so doing, the Cour de cassation affirmed the autonomous nature of death coverage, which is binding on the insurer, even when disability and incapacity cover have been taken out with another insurer.
In this case, the first insurer to guarantee the death was therefore obliged to cover the consequences of the death under the terminated provident policy.