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Court Rejects Long Term Disability Insurer (Unum’s) Denial after a Decade

The federal 8th Circuit Court of Appeals rejected a Long Term Disability Insurer’s (Unum Life Insurance Company) claim denial in the case of Chronister v Unum Life. Citing an important change in the law since Metlife v Glenn the Court determined that Unum’s failure to comply with its own claims handling manual was an important factor leaving the “firm impression that Unum’s decision to deny the claim was an abuse of discretion.”

Unum’s claims manual unequivocally requires Unum to give “significant weight” to the SSA’s disability determination and to reject that determination only if there is “compelling evidence” that the decision is (1) legally erroneous or an abuse of discretion, (2) inconsistent with the medical evidence, (3) inconsistent with the insurance policy’s definition of disability, or (4) “[t]here is other evidence that clearly shows that the claimant is not disabled.” The manual further requires that ‘should Unum’s disability determination differ from that of the SSA, Unum “must [] articulate the reason and analysis [based on the four factors listed above]; and [] support that reason and analysis with reference to facts and information in the claim file documentation.”

The Court found the fact that Unum “nowhere mentions the SSA’s determination that Chronister was disabled” in the denial letter compelling evidence that Unum violated its own claims handling procedures leading to the Court to conclude that Unum abused its discretion and leading the Court to order Unum to pay benefits which were pending for more than a decade.