## Facts

- Frank and Jody Deramus applied for life insurance with Jackson National Life Insurance Company in January 1988.
- As part of underwriting, Jackson required blood and urine testing, including an HIV test, under a policy denying coverage to HIV-positive applicants.
- In April 1988, the lab reported Frank’s HIV test was positive.
- Jackson rejected Frank’s application but did not disclose the HIV-positive result to Frank or Jody and did not state the reason for rejection.
- About two years later, Frank learned independently that he was HIV-positive during medical treatment.
- In April 1991, shortly before his death, Frank requested Jackson send the 1988 test results to his physician; Jackson complied and confirmed the 1988 HIV-positive result.
- Jody Deramus, individually and as administratrix of Frank’s estate, sued Jackson alleging that Jackson had a duty to disclose the HIV-positive result and that its conduct was actionable under various theories.

## Issues

1. Whether, under Mississippi law, an insurer that obtains medical test results for underwriting owes a legal duty to disclose an applicant’s HIV-positive result to the applicant, spouse, or a designated physician.
2. Whether the insurer’s possession of sensitive medical information creates a confidential or fiduciary relationship imposing disclosure obligations.
3. Whether ordering and receiving underwriting test results constitutes a voluntary assumption of a duty to disclose abnormal results.
4. Whether contract principles or public policy can supply an affirmative disclosure duty not otherwise recognized by Mississippi law.

## Decision

- The district court granted summary judgment for Jackson and denied the plaintiff’s motion for summary judgment.
- The court held Jackson owed no legally enforceable duty under Mississippi law to disclose the HIV-positive test result obtained during underwriting.
- The Fifth Circuit affirmed in a per curiam decision, adopting the district court’s reasoning.

## Legal Principles

- In Mississippi, the existence and scope of a duty in negligence is a question of law; absent state authority recognizing a duty, a federal court sitting in diversity will not create a new one.
- An insurer conducting medical testing for underwriting purposes, without undertaking to provide medical diagnosis or counseling, does not owe a general duty to disclose adverse test results to an applicant or the applicant’s physician.
- The insurer–applicant relationship at the underwriting stage is ordinarily an arm’s-length commercial relationship and does not, without special circumstances, create a fiduciary or confidential relationship.
- A voluntary assumption of duty requires an undertaking beyond the insurer’s self-interested underwriting activities; requiring tests for risk evaluation alone does not establish an assumed duty to disclose.
- Public policy concerns, even involving serious medical conditions, do not alone justify imposing a novel affirmative disclosure obligation absent support in state law.

## Conclusion

The Fifth Circuit affirmed summary judgment for the insurer, holding that Mississippi law did not impose a duty on a life insurer to disclose an applicant’s HIV-positive underwriting test result, and that neither fiduciary, assumed-duty, contract, nor public policy theories supplied such a duty on the facts presented.


Deramus v. Jackson Nat'l Life Ins. Co., 92 F.3d 274 (5th Cir. 1996)