The Iowa Supreme Court has upheld a lower court ruling denying claims made by the Farm Bureau Life Insurance company against three other insurers. Farm Bureau Life learned that a blood test from a couple who had applied for life insurance showed both were infected with H.I.V. The company sent a letter to the couple turning down their insurance request based on their blood tests, and asked for permission to notify their doctors of the finding.
The couple declined to allow the company to notify their doctors. The couple did not find out they were infected until two years later and filed a lawsuit in Wyoming against the Iowa company in June of 2002. Farm Bureau Insurance reached a settlement with the couple being identified in court by the pseudonym Smith, and then sued three insurance companies that provided Farm Bureau its coverage in such claims.
The district court dismissed the Farm Bureau suit, saying the company did not give the other insurers timely notice of the claim. The Iowa Supreme Court upheld the district court ruling that the claim was not given in the time required by the policy.
See the entire ruling here: Farm Bureau ruling PDF