Facts
In addition to other policies, the parties had an "income replacement insurance in case of illness". The plaintiff had been partially or fully incapable of work since May 8, 2000, and the insurance company provided daily allowance payments of over CHF 100,000 from June 8, 2000 to February 28, 2002. In the context of a criminal investigation against the plaintiff for arson, obstruction of justice, and multiple counts of fraud, the insurance company asserted a claim of around CHF 150,000 as a civil party on April 2, 2002. By letter dated April 17, 2002, the insurance company declared, based on Art. 40 of the Insurance Contract Act (VVG), its withdrawal from all insurance contracts, as the police investigation had revealed that at least part of the claims asserted were not justified.
The plaintiff accepted the blanket withdrawal from the other insurance contracts but disputed it with regard to the income replacement insurance and requested the insurance company to resume the daily allowance payments. As the insurance company did not comply with this demand, the plaintiff filed a lawsuit with the District Court of Rheintal, seeking the payment of the remaining daily allowances and an invalidity pension for the first quarter.
Considerations
The Federal Supreme Court had to decide whether the insurance company was entitled to withdraw from all insurance contracts, including the income replacement insurance, based on Art. 40 VVG, or only from those contracts related to the fraudulent acts and the…