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August 19, 2013
Court allows insurance payout to insured wife’s killer

The Ontario Court of Justice has ruled that a man who killed his estranged wife may collect the $51,000 death benefit of a life insurance policy because he was mentally ill at the time he stabbed her to death.

The incident dates to 2006 when the Toronto man stabbed his 58-year-old wife 24 times while she slept and then bludgeoned her with a marble statue.

The man was tried for second degree murder but was found not criminally responsible for the crime due to mental illness.  He had been diagnosed with and received periodic treatment for schizophrenia and mood disorders for several years prior to the incident.

Following treatment in a mental institution, the man was released in 2010.  He then filed a death claim with the insurer.  However, his son contested the claim.  The case then went to litigation.

The Ontario Superior Court of Justice initially ruled that, based on the common-law practice that a person cannot benefit from the proceeds of crime, he was not eligible to receive the benefit.

“[The man] committed second degree murder of his ex-wife.  Even though he was found not criminally responsible, he still physically committed the crime,” ruled Justice Andra Pollak.

The man then appealled to the Ontario Court of Appeal.

In its review of the case, the higher court reversed the first ruling, arguing that if a person is found “not criminally responsible” he/she did not intend to commit the crime or benefit from it.

“If a person found not criminally responsible on account of mental disorder is not ‘morally responsible’ for his act, then there is no rationale for applying the rule of public policy,” said Justice Marc Rosenberg.

As part of the ruling, the Court of Appeal dismissed an application by the provincial attorney general’s office to forfeit the policy’s death benefit to the province under the Ontario Civil Remedies Act (OCRA).   That act is designed to allow the province to seize proceeds from unlawful activity; for example, cash or other valuables found by police in drug raids.   However, from the high court ruling, it appears that OCRA’s jurisdiction does not cover proceeds from contractual benefits of lawful products such as life insurance.   

The case has provoked considerable debate in the legal community and among insurance experts.  If an individual is not responsible for a crime leading to an insured person’s death, can he/she apply to receive the death benefits from that person’s life insurance policy?  In this case, the moral and legal answers to that question appear to differ.

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