The rule is clear-cut when someone murders another, but what about lesser offenses. If someone drives while driving with more than the permitted alcohol-to-blood ratio in his system and as a result gets into an accident that kills his spouse, may he still recover life insurance proceeds on her life? What if there is no alcohol, but the driver was guilty of careless driving? Or how about speeding? The line isn’t always easy to draw.
What if the husband kills his wife, but is found not criminally responsible for the death on account of a mental disorder?
The question of whether someone who has been found to not be criminally responsible because of a mental disorder (or to use the older language, is not guilty by reason of insanity) of killing another may collect life insurance on the deceased’s life was recently considered by the Ontario Court of Appeal in Dhingra v. Dhingra, 2012 ONCA 261 (CanLII). In that case Ved Dhingra hit is former wife several times with a marble statue causing her death. He was charged with second degree murder, but found not criminally responsible by reason of a mental disorder.
Mr. Dhingra applied for the proceeds of a life insurance policy on his wife’s life of about $50,000. The Ontario Superior Court of Justice denied his claim, and he appealed to the Court of Appeal.
The Court of Appeal held that public policy did not prohibit someone who was not criminally responsible by reason of a mental disorder from recovering the insurance proceeds on the life of the person he killed. In those circumstances, the person receiving the insurance proceeds is not considered criminally or morally blameworthy for the death to fall under the public policy rule.
Justice Rosenberg noted that many other common law countries have similar exemptions from the public policy rule:
 The approach in other common law countries is generally to exempt persons with a mental disorder that would give rise to an insanity defence from the effect of the public policy rule. For example, in the United States, those states that have adopted § 2-803 of the Uniform Probate Code would exempt persons who are not “criminally accountable for the felonious and intentional killing of the decedent”. Most so-called “slayer statutes” similarly exempt the insane beneficiary from operation of the public policy rule: see Laurel Sevier, “Kooky Collects: How the Conflict Between Law and Psychiatry Grants Inheritance Rights to California’s Mentally Ill Slayers” (2007) 47 Santa Clara L. Rev. 379; and Gary Schuman, “Life Insurance and the Homicidal Beneficiary: The Insurer’s Responsibilities Under State Slayer Laws and Statutes” (2001) 51 Fed’n Def. & Corp. Counsel Q. 197.
 This same approach is generally followed in other common law jurisdictions such as Australia and New Zealand. In the United Kingdom, the common law would seem to exempt from forfeiture someone who was not guilty of “deliberate, intentional and unlawful violence, or threats of violence”: see R. v. National Insurance Commissioner, ex parte Connor,  1 All E.R. 769 (Div. Ct.), at p. 774. Thus, a person found not guilty by reason of insanity would not be subject to the forfeiture rule: see Chris Triggs, “Against Policy: Homicide and Succession to Property” (2005) 68 Sask. L. Rev. 117, at p. 126. In any event, even if the forfeiture rule did apply to an insane accused, the common law has been varied to give the court discretion not to apply the forfeiture rule where “the justice of the case requires the effect of the rule to be so modified”; the court is to consider “the conduct of the offender and of the deceased and ... such other circumstances as appear to the court to be material”: see the Forfeiture Act 1982 (U.K.), 1982, c. 34, s. 2(2).The Court of Appeal considered Ontario’s Civil Remedies Act that allows the Attorney General to apply for an order forfeiting property that is the proceeds of an unlawful activity. Under the legislation, the Attorney General may apply for forfeiture even if the person against whom the order is sought was not criminally responsible by reason of a mental disorder. The Court of Appeal held that although the Civil Remedies Act allows the Attorney General to make a forfeiture application, the legislation does not alter the common law public policy rule.