Senior United States District Court Judge William Acker offered his views on ERISA LTD cases to the Senate. Follow this link to read his views.
The Judge has a number of interesting insights including the overwhelming difficulty faced by most LTD claimaints that is simply built into the system.
As reported by Scott Mulhauser/Erin Shields on the insurancenewsnet.com website.
Senate Finance Committee Chairman Max Baucus (D-Mont.) will convene a hearing on Tuesday to examine the difficulties workers face in securing benefits they are entitled to from private long-term disability insurance plans. The hearing, entitled “Do Private Long-Term Disability Policies Provide the Protection They Promise?” will take place at 10:00 a.m. on Tuesday, September 28 in Room 215 of the Dirksen Senate Office Building.
At the hearing, Baucus will focus on whether private-sector long-term insurance claims are being unfairly denied or terminated by the companies providing long-term disability insurance covered under the Employee Retirement Income Security Act (ERISA). The hearing will also examine how these private insurance companies have handled workers’ appeals of denials and terminations. Baucus will raise questions about possible improvements that can be made to ensure claimants and beneficiaries of long-term disability insurance plans covered under ERISA are treated fairly.
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In a recent ERISA Long Term Disability case, the Court granted Plaintiff’s Motion for summary judgment and ordered Defendant to pay all of Plaintiff’s overdue benefits during the “own occupation” period.
In _____________ v The Great Atlantic & Pacific Tea Company LTD Plan, the Honorable George Caram Steeh (E.D. Michigan) confirmed that Defendant had improperly withheld payment of LTD benefits during the Plan’s “own occupation” period despite the fact that Defendant had obtained numerous “paper reviews” by its own physicians. The Court ordered Defendant to pay all of the overdue benefits and ordered Defendant to reconsider its decision under the “any occupation” definition of disability.
This case demonstrates the critical importance of determining the correct standard of review.
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SMDA Partner, Patrick Derkacz, attended the 13th ACI National Advanced Forum on Litigating Disability Insurance claims held in historic Boston last week. This seminar was two solid days of presentations and discussions with the countries leading Disability Insurance Litigation attorneys. It was a great opportunity to discuss the latest developing trends and caselaw in this niche area of practice, not to mention the killer crabcakes at Legal Seafood on the edge of Boston Harbor.
Just like other forms of insurance , your Long Term Disability Insurance is only as good as the Company providing it and the policy they sell. Every time I see a “Good Hands” commercial or a “like a good neighbor” commercial I think that for every dollar an insurance company spends on advertising it is a dollar that it cannot spend to pay claims.
A recent ranking of insurance companies identified a number of familiar names as the worst including several Long Term Disability Insurers. While my experience is strictly unscientific, I have seen a number of these same insurers consistently denying meritorious claims. I have filed many ERISA claims and lawsuits to reverse these denials.
So, be careful who you get your LTD insurance from. There is probably a reason that one company’s policy is less expensive. If meritorious claims are denied, the company can afford to accept a lower premium rate. Here are the top ten (or bottom ten) companies based on claims denied rankings:
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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.”
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In a recent decision, Delisle v Sun Life, the 6th Circuit Court of Appeals affirmed a decision requiring Long Term Disability Insurer Sun-Life to pay disability benefits even though 6 of its hired physicians supported its decision to terminate benefits.
In finding that Sun-Life’s decision was arbitrary and capricious the Court recognized that 5 of the 6 physicians were “under regular contract with Sun Life” and that such physician reviewers may have an incentive to make a finding of not disabled in order to save their employers money and preserve their own consulting arrangements.
The Court also pointed out Sun Life’s failure to attach any weight to the fact that plaintiff was awarded SSD benefits. In fact, Sun Life failed to even acknowledge the award in any of the three denial letters.
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Farmer’s Insurance was recently hit with a $130,000,000.00 jury verdict in a class action law suit filed on behalf of a group of 76,000 Oklahomans. The plaintiff’s were Farmer’s customers in Oklahoma who made claims from June 1994 through mid-2007. The homeowners claim that Farmers, a subsidiary in Los Angeles of Zurich Financial Services AG, deliberately underpaid their claims.
The suit apprently was originally brought by a single policyholder Bill Burgess who sued Farmers in 2001 over a policy on his home. Mr. Burgess felt he had been underpaid on his claim for wind and storm damage. The lawsuit was changed to a class action after lawyers found information in the insurer’s claim files indicating that denying payment for overhead and profits was a “widespread practice,” plaintiff’s attorney said.
Melissa Amschwand and her husband-Thomas did everything they were told to maintain Tom’s life insurance when he was diagnosed with terminal cancer. After he died and his widow applied for his life insurance benefits they were told for the first time that Tom needed to have worked a single day in order to trigger his life insurance benefits. What is really egregious is that prior to his death, Tom and his wife repeatedly asked for a copy of the policy to make sure that he was covered. The company never provided the requested information. In fact, the company repeatedly assured Tom and Melissa over the phone that he was covered.
After he died, the company dropped the bomb on Melissa that Tom had failed to satsify the “Active Work Rule” which required that Tom work a single day to trigger the life insurance policy. Instead of paying the life insurance benefit of over $400,000 the company merely refunded the life insurance premium amount.
Long Term Disability Insurance Lawyer Blog