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Eleventh Circuit Court of Appeals rules that stranger-originated life insurance is incontestable two years after issuance date

On January 25, 2017, in Pruco Life Insurance Company v. Wells Fargo Bank, N.A., No. 13-12135, the Eleventh Circuit Court of Appeals held that a stranger-originated life insurance policy (a policy owned by a person having no insurable interest with respect to the insured under Florida law) could not be contested by the issuing insurance company more than two years after the date of issuance. The Court of Appeals certified the question to the Florida Supreme Court, which so ruled in Wells Fargo Bank, N.A. v. Pruco Life Ins. Co. 200 So. 3d 1202, 1206 (2016). The Florida Supreme Court relied on the plan language of Fla. Stat. Section 627.455 which generally imposes this condition with respect to all life insurance policies.