Court: No recovery allowed under life insurance policy used for ‘wagering’

Insurance Matters

By Don R. Sampen

Don R. Sampen is a member of the appellate practice group of Clausen, Miller P.C., where he focuses on appellate, commercial and insurance-related litigation. He also teaches insurance law at Loyola University Chicago School of Law. His column appears twice monthly.

Posted September 6, 2022 11:42 AM

The 7th U.S. Circuit Court of Appeals, applying Illinois law, recently held that a life insurance arrangement in which the insured purchased the policy through non-recourse loans and eventually assigned the policy benefits to others, constituted an unlawful wager — making the policy void ab initio. The case is Sun Life Assurance Co. of Canada v. Wells Fargo Bank, N.A., 2022 U.S. App. Lexis 22813 (7th Cir., Aug. 17). The insurer, Sun Life, was represented by Cozen O’Connor of Chicago. Reed Smith LLP of Chicago and ArentFox …

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