Western District of Kentucky Upholds Rescission of Supplemental Life Coverage Based on Material Misrepresentation in Evidence of Insurability

In Florentino v. Hartford Life & Accident Insurance Co., No. 3:24-CV-643-CHB, 2026 WL 751918 (W.D. Ky. Mar. 17, 2026), the Western District of Kentucky addressed a familiar but often heavily litigated issue in ERISA life insurance cases: when an insurer may rescind supplemental coverage based on alleged misrepresentations in an evidence of insurability application. The court ultimately sided with the insurer, reinforcing the broad scope of rescission under federal common law where a material misrepresentation is established.

The case arose after the decedent elected supplemental life insurance coverage through his employer’s ERISA-governed plan. While a portion of the coverage was guaranteed, the additional amount required submission of a Personal Health Application. As part of that application, the decedent answered “no” to a question asking whether, within the prior five years, he had used controlled substances (other than as prescribed), been treated for drug or alcohol abuse, or been convicted of driving under the influence.

Hartford approved the supplemental coverage the same day the application was submitted. However, less than two months later, the decedent died from acute fentanyl intoxication. A post-claim investigation revealed extensive medical records documenting a long history of opioid dependence, including relapse, treatment, and ongoing use within the relevant five-year period. Based on this information, Hartford concluded that the decedent’s response on the application was inaccurate and material to its underwriting decision. It rescinded the supplemental coverage and denied the claim.

The beneficiary challenged the denial under ERISA § 502(a)(1)(B), arguing that the rescission was improper under both the terms of the policy and applicable law. The court disagreed and upheld Hartford’s decision.

Applying federal common law principles governing ERISA plans, the court reiterated that an insurer may rescind coverage if it proves the insured made a fraudulent or material misrepresentation that induced issuance of the policy. Critically, the court emphasized that materiality—not intent—is the key inquiry. A misrepresentation is material if it affects the insurer’s risk or the hazard assumed.

Here, the court had little difficulty concluding that the decedent’s undisclosed opioid dependence met that standard. The court found the facts closely mirrored prior Sixth Circuit precedent, particularly Campbell v. Hartford Life & Accident Insurance Co., where rescission was upheld based on a nearly identical misrepresentation regarding substance abuse history. As in Campbell, the court concluded that failing to disclose ongoing substance abuse was plainly material because such information is “extremely important” to underwriting decisions.

The plaintiff raised several arguments in an effort to avoid rescission, all of which the court rejected.

First, the plaintiff argued that Hartford was required to prove the decedent intended to deceive. The court rejected this outright, noting that under federal common law, an insured’s good faith is irrelevant. Even an innocent misrepresentation can justify rescission if it is material.

Second, the plaintiff relied on the policy’s incontestability provision, arguing that Hartford failed to satisfy certain requirements—such as obtaining proper signatures and providing a copy of the application—before relying on the statements in the application. The court found this argument misplaced. Because Hartford rescinded the policy within two years of its effective date, the incontestability clause did not limit Hartford’s ability to contest the coverage.

Third, the plaintiff contended that Hartford’s rescission was invalid because it did not refund premiums as a condition precedent. The court found no support for that proposition under federal common law or the terms of the policy. To the contrary, the court noted that neither controlling precedent nor the policy language imposed any such requirement, and that the insurer had at least directed the beneficiary to seek reimbursement through the employer.

Notably, the court declined to resolve the parties’ dispute over the applicable standard of review—de novo versus arbitrary and capricious—because the outcome would be the same under either standard. This underscores the strength of the administrative record in supporting Hartford’s decision.

In the end, the court granted Hartford’s motion for judgment on the administrative record and denied the plaintiff’s motion, holding that the rescission was valid and supported by both the policy and federal common law.