## Facts

- An insurer issued a $200,000 life insurance policy to an insured that required any beneficiary change to be made by a “signed request” sent to the insurer.
- The insured previously complied with that procedure by filing a written request naming her son as primary beneficiary and another individual (Caswell) as contingent beneficiary.
- The primary beneficiary died before the insured, leaving Caswell as the remaining beneficiary under the policy designation.
- The insured later executed a will that specifically identified the policy and purported to distribute the policy proceeds to persons and charities other than Caswell.
- After the insured’s death, competing claims arose between Caswell and estate-related parties asserting rights under the will.
- The insurer filed an interpleader action to have the court determine entitlement to the proceeds.

## Issues

1. Whether a will provision that specifically identifies a life insurance policy can operate as a change of beneficiary when the policy requires a signed request sent to the insurer and that method was not used.
2. Whether the insured’s will constitutes “substantial compliance” with the policy’s change-of-beneficiary procedure.
3. Whether an insurer’s filing of an interpleader action waives compliance in a way that validates an otherwise ineffective beneficiary change.

## Decision

- The Appellate Division reversed the order denying Caswell’s motion for summary judgment.
- The court held that the policy’s beneficiary designation controlled as a matter of law.
- The court ruled that the will’s attempted disposition of the proceeds did not effect a beneficiary change and did not constitute substantial compliance with the policy requirements.
- The court held that the insurer’s commencement of an interpleader action did not validate the testamentary attempt to change beneficiaries.
- Summary judgment was granted to Caswell as the surviving contingent beneficiary.

## Legal Principles

- When a life insurance policy prescribes a method for changing beneficiaries and does not authorize change by will, a testamentary provision inconsistent with the existing designation is ineffective absent compliance with the policy method.
- “Substantial compliance” requires that the insured take steps reasonably sufficient to carry out the policy’s prescribed change process; a will, without a signed change request communicated to the insurer as required, is insufficient.
- An insurer’s interpleader filing may reflect neutrality and may waive insistence on certain procedural formalities, but it does not convert an unexecuted or unauthorized beneficiary change into a valid one.
- Courts treat the change-of-beneficiary clause as a contractual requirement; the insured’s intent, standing alone, does not override noncompliance with the policy’s specified procedure.

## Conclusion

The court enforced the policy’s beneficiary designation over the insured’s contrary will, holding that a specific testamentary disposition of life-insurance proceeds neither satisfies nor substantially complies with a policy requirement that a signed change request be sent to the insurer, and that an interpleader filing does not alter that result.


Lincoln Life & Annuity Co. of N.Y. v. Caswell, 31 A.D.3d 1, 813 N.Y.S.2d 385 (1st Dep’t 2006)