Leon Richard Fishman, the designated beneficiary under a $300,000 life insurance policy issued by BMO Life Assurance Company, sought immediate payment of the death benefit after his wife Gail Fishman died of cancer in December of 2024.

The Court of King's Bench of Manitoba ruled against him on the central question: BMO was entitled to investigate a potential civil fraud defence before paying the claim, notwithstanding the claimant's compliance with the statutory proof-of-claim requirements. The decision was rendered on September 18, 2026.

Cannabis disclosure raises questions about application

Gail Fishman obtained the policy in March 2017. In her application, she denied using tobacco, marijuana, hashish or nicotine products during the periods specified in the insurer's questions, which extended as far back as five years. At the time of her death, all premiums had been paid, and the policy remained in force. It had been in force for more than two years.

Under Manitoba's Insurance Act, a life insurance policy generally becomes incontestable after two years, except in cases of fraud. Because the policy had been in force since 2017, BMO's ability to challenge its validity depended on establishing fraud rather than merely an inaccurate statement in the application.

Following his wife’s death, Leon Fishman submitted the documentation required to claim the benefit, including the completed BMO proof-of-death form indicating the deceased had used marijuana for "20+ years." That disclosure was directly inconsistent with the answers the deceased had given in her original application. The inconsistency raised questions about the accuracy of the original application, although the court was not being asked to determine whether the deceased had committed fraud.

BMO then requested additional information about the deceased's marijuana use history. By letter dated February 17, 2025, counsel for the plaintiff advised BMO that no further information would be provided, withdrew all previously granted consents permitting BMO to collect personal information about either party, and demanded immediate payment.

The dispute reached the Court of King's Bench of Manitoba, which was asked to determine whether satisfying the proof-of-claim requirements under section 180 of The Insurance Act prevented BMO from conducting further inquiries into potential fraud.

Beneficiary challenges insurer’s right to investigate

Both parties agreed that the plaintiff had satisfied the evidentiary requirements of ss. 180(a) to (d) — proof of the insured's death, her age, the claimant's entitlement to receive the insurance money, and the identity and age of the beneficiary.

BMO acknowledged that it could only avoid payment by establishing a defence of civil fraud and further acknowledged that the Act contains no statutory provision expressly imposing on a claimant a duty to answer the type of confirmatory questions it posed.

The plaintiff argued that s. 180 constitutes a complete code: once its requirements are met, the insurer must pay or formally deny the claim within 30 days and cannot condition payment on further disclosure about the insured's medical history or lifestyle.

Mr. Fishman characterized BMO's cannabis inquiry as an inappropriate fishing expedition inconsistent with the Act's consumer-protection purpose.

BMO maintained that its obligation to pay arises only where a valid, enforceable policy exists, and that the 30-day payment period under s. 180 is not triggered until the insurer has had a reasonable opportunity to investigate whether the policy is voidable for fraud.

BMO also relied on a clause in the insurance application authorizing the collection of information for risk assessment and claim evaluation. The insurer argued that it was entitled to investigate whether fraud rendered the policy voidable.

Proof of claim does not guarantee payment

The court found that section 180 does not expressly require an insurer to pay or deny a claim within 30 days solely because the claimant has submitted the required documentation.

The court further held that s. 180, read in its full statutory context, presupposes a valid and enforceable policy. Although no express validity precondition appears in s. 180, that requirement is necessarily implied when s. 180 is interpreted harmoniously with the surrounding provisions in Part V of the Act.

The court also rejected BMO's argument that section 180 applies only to uncontested claims.

Policy clause supports BMO’s investigation

Even accepting that s. 180 applies in contested cases, the court found that the provision is silent on the insurer's ability to investigate whether a civil fraud defence remains available.

As the court stated: "Although an insurer may ultimately deny payment only on proof of civil fraud, that limitation does not prevent it from making reasonable inquiries of the claimant or beneficiary, here one and the same, necessary to determine whether such a defence is available."

The court held that limiting the insurer to verifying only the perfunctory facts required by s. 180 would render the civil fraud exception under the Act "largely illusory" and deprive the contractual authorization clause of meaningful effect. Satisfaction of s. 180's evidentiary requirements does not preclude an insurer from investigating whether the policy is voidable for fraud.

The court also relied on a clause in the insurance application authorizing BMO to obtain information for claim evaluation. It found that questions about the deceased's marijuana use were reasonably connected to the discrepancy between her original application and the beneficiary's subsequent disclosure.

The court cautioned that its conclusion about BMO's contractual right to require answers depended on the specific wording of the policy. The decision does not establish that all life insurance contracts confer the same right.