Could cashing an insurance reimbursement check bind the recipient to the statement printed above its endorsement line?

Plain-English summary

The Attorney General found no general South Carolina statutory or case-law prohibition on an insurance reimbursement check bearing a statement above the endorsement line that the recipient claimed the benefits and made no false or concealed material statements. The opinion also said that an endorsement of this kind was not void as a matter of public policy and cited cases recognizing check endorsements as a means of forming binding agreements.

It did not decide whether a particular insurance contract authorized the required endorsement or whether any particular claimant's statements were true. The office said such contract and factual matters were outside its opinion process.

Currency note

This opinion was issued in 2010. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did South Carolina law generally prohibit the check endorsement described in the opinion? A: The AG said it was unaware of a general prohibition and did not consider that endorsement void on public-policy grounds.

Q: What did the printed statement require the payee to acknowledge? A: The quoted statement said the check represented claimed insurance benefits and asked the payee to certify that no false statements or material concealment had occurred.

Q: Did the AG decide whether a particular insurance policy allowed the requirement? A: No. The opinion said that depended on the parties' contractual relationship and facts it could not determine.

Background and statutory framework

A senator asked whether a check issuer could use the recipient's endorsement as a signature for a binding agreement. The office reviewed the endorsement language printed on the example check and discussed the absence of a general South Carolina prohibition.

Citations and references

The original opinion text below cites White Truck Sales of Indianapolis, Inc. v. The Shelby National Bank of Shelbyville and cases concerning check endorsements.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/february-24-2010-1/
• Original PDF: https://www.scag.gov/wp-content/uploads/2011/03/reese-g-g-os-9020-2-24-10-endorsement-of-check1.pdf

Original opinion text

HENRY MCMASTER
ATT'ORNEY GENERAL

February 24, 2010

The Honorable Glenn G. Reese
Senator, District No 11
P. 0. Box 142
Columbia, South Carolina 29202
Dear Senator Reese:
In a letter to this office you questioned whether an entity that issues a check to an individual for reimbursement of an insurance claim or as a payment can require that the signature endorsement on the back of the check also be considered as a signature for a binding contract. The copy of the check which you forwarded states on the back above the line for a signature of endorsement that "I acknowledge that this check represents insurance benefits to which I have claimed entitlement. I also certify that I have made no false claims or statements or concealed any material fact."

Generally, "[a] binding contract between... (individuals is) ... created by... (the) ... endorsement and negotiation ofthe check." White Truck Sales oflndianapolis, Inc. v. The Shelby National Bank of Shelbyyille, 420 N.E.2d 1266 (Ct.App. Ind. 1981). As to the particular type endorsement referenced above, based upon my review, I am unaware of any State statutory provision or case law that would prohibit such a required endorsement. In the opinion of this office, such an endorsement is not void by public policy. Also, such type endorsement is recognized generally. See: Clawson v. Burrow, 250 S.W.3d 59 (Ct.App. Tenn. 2007); Lampton v. Allstate Insurance Co., 586 So.2d 205 (Ala. 1991). Moreover, there may be a requirement in the contractual relationship between the parties regarding the issuance of a check for reimbursement of a claim that would specifically authorize such a required endorsement. Such is a matter for review by a private attorney as this office has repeatedly stated that an opinion of this office cannot determine facts, noting that the determination of facts is beyond the scope of an opinion of this office. See: Ops. Atty. Gen. dated November 12, 2008; March 19, 2008; October 8, 2007. Nevertheless, as stated, this office is unaware of any general prohibition to such a required endorsement.

REMBERT

c. D ENNIS Bun.oJNG • POST OFFICE Box 11549 • Cou:JMBIA, SC 29211-1549 • TEl..EPHONE 803-734-3970 • FAcsrMrLE 803-253-6283

The Honorable Glenn G. Reese
Page2
February 24, 2010

With kind regards, I am,
Very truly yours,
Henry McMaster

Cl:/;Ls_
By:

REVIEWED AND APPROVED BY:

Robert D. Cook
Deputy Attorney General

Charles H. Richardson
Senior Assistant Attorney General