National Investigation Uncovers Systemic Practice Among Life Insurers Depriving Beneficiaries of $5 Billion!April 29, 2016 McKennon Law Group PC
Four years ago we blogged about Metropolitan Life Insurance Company’s (“MetLife”) inconsistent use of the Social Security Administration’s Death Master File database to deprive beneficiaries of $40 million in life insurance benefits. See http://www.mslawllp.com/metlife-pays-40-million-to-settle-allegations-that-it-failed-to-properly-identify-and-pay-life-insur/. That database, created by the Social Security Administration, is consistently updated with the names and identity of everyone for whom a death certificate is filed in the United States. The Administration licensed it to life insurance companies so they could easily identify decedents, a necessary part of their business.
Obtaining Letters From Doctors and Co-Workers Can Help Prove a Disability Based Upon Subjective ComplaintsApril 25, 2016 McKennon Law Group PC
Insureds suffering from disabling conditions that cannot be objectively verified (for example pain, fatigue, migraines, and confusion) are often denied long-term disability benefits because of the difficulty of proving their claims. In an attempt to deny a claim for disability benefits, a plan administrator will often assert that there is not enough objective evidence to support a disability classification under the terms of the policy. Most often, these disabling conditions render the insured incapable of pursuing either their own occupation or any gainful occupation, and the insured’s condition satisfies the definition of total disability within the policy at issue. However, insureds do not necessarily need to provide objective evidence of a disabling condition that inherently cannot be proven with objective evidence, even when satisfactory proof of such a condition is required by the policy. Recently, Fernando M. Olguin, United States District Judge for the District Court for the Central District of California, outlined evidence an insurer must consider in determining whether an insured is entitled to disability benefits under ERISA due to a disorder that is not capable of objective proof. Pamela Jahn-Derian v. Metropolitan Life Insurance Co., No. 2:13-cv-07221-FMO-SH, 2016 WL 1355625 (C.D. Cal. March 31, 2016).
Long-Term Disability Insurers Cannot Ignore, and Cannot Unreasonably Discount, the Subjective Symptoms of their InsuredsMarch 08, 2016 McKennon Law Group PC
Short-term disability and long-term disability insurers very often deny claims for benefits by stating that the claimant’s alleged restrictions and limitations are not supported by the claimant’s medical records. While a broad statement like this can mean a number of things, it often means that an insurer does not believe an insured’s complaints of pain or other subjective symptoms are disabling as they have not been proven by objective evidence. However, insurers will rarely state in their denial letters that they do not believe an insured has the subjective symptoms reported because there is no objective proof of such symptoms. Rather, they will typically ignore or downplay an insured’s subjective complaints and simply state that the medical records show that the insured can perform their occupational tasks and is thus not disabled under the terms of the policy. However, as the Ninth Circuit continues to make clear, it is an error to require objective medical evidence of complaints that are inherently subjective in nature. See Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623, 635 (9th Cir. 2009).
Would You Believe that an Insurer’s Policy Violates the “Efficient Proximate Cause” Doctrine? Believe it!February 11, 2016 McKennon Law Group PC
A homeowners’ insurance policy does not always mean what it says. That is, in effect, what the California Court of Appeal recently concluded in Vardanyan v. AMCO Ins. Co., 243 Cal. App. 4th 779 (2015), a case involving the well-established “efficient proximate cause” doctrine. The insurer’s policy explicitly stated it did not cover property damage caused by collapse of a building unless the collapse was caused “only by” hidden decay, hidden insect damage or a couple other listed perils. Although the collapse was caused in part by non-listed perils that were excluded by the policy, the Court of Appeal still concluded the loss should be covered if the jury on remand decides one of the listed perils is the most important cause of the loss. It looked not just to the written contract language, though the claim would have been excluded if it did that, but to public policy as well. The court held the insurer’s collapse provision “is an unenforceable attempt to contract around the efficient proximate cause doctrine.”
Supreme Court Requires Plan Fiduciaries to Act Fast if They Want to Ensure Reimbursement from Plan ParticipantsJanuary 29, 2016 McKennon Law Group PC
Spending money quickly on lavish trips and fine dining could prevent collection on a debt owed to your ERISA plan. At least this may be the case if you are a plan participant who recently recovered money from a third party for injuries that already resulted in a payment of expenses by your plan.
Exchanging correspondence with a plan administrator requesting reconsideration of a denial may preserve the right to sue by extending contractual time limitations and demonstrating that the pursuit of administrative remedies would be futile. The United States District Court Southern District of California determined that the date of an initial claim denial did not trigger a pension plan’s two-year time limitations clause, since the language within the clause indicated that resolution of the claim, rather than awareness of the claim, is the triggering event. Watkins v. Citigroup Retirement Systems, No. 15-CV-731 DMS (NLS), 2015 WL 9581838 (S.D. Cal. Dec. 30, 2015). The Court also declined to dismiss the plaintiff’s complaint for failing to exhaust administrative remedies due to the defendant’s persistent restatement of its position in response to Plaintiff’s repeated requests for reconsideration. Id.
McKennon Law Group PC is proud to announce that its founding shareholder Robert J. McKennon has been recognized as one of Southern California’s “Super Lawyers” and appears in the 2016 edition of Southern California Super Lawyers magazine published on January 20, 2016.
Hanging on the Past: What to Remember About the Abuse of Discretion Standard of Review as it Applies to ERISA CasesJanuary 08, 2016 McKennon Law Group PC
Although we recently explained that policies offered, issued, delivered, or renewed on or after January 1, 2012 are afforded de novo review as a result of California Insurance Code section 10110.6 (see The Death of the Abuse of Discretion Standard of Review in ERISA Disability Insurance Cases in California), a recent ERISA case helps to remind us that older ERISA plans, which vest discretion in plan administrators and claim administrators, remain subject to the more lenient abuse of discretion standard of review. Accordingly, it remains critical to understand how courts review a plan administrator’s decision to deny benefits under this standard of review.
Department of Labor Proposes New, Claimant-Friendly ERISA Regulations for Disability Insurance ClaimsDecember 10, 2015 Scott Calvert
From time to time, the U.S. Department of Labor promulgates new regulations governing disability insurance benefit claims and health insurance benefit claims that are governed by the Employee Retirement Income Security Act of 1974, commonly referred to as ERISA. The regulations must be followed by plan administrators and claim administrators when reviewing disability insurance and health insurance benefit claims submitted by claimants. Recently, the Department of Labor proposed changes to the regulations governing long-term disability insurance benefit claims and short-term disability insurance benefit claims.
The November 27, 2015 edition of the Los Angeles Daily Journal features an article written by Robert McKennon and Joseph McMillen of the McKennon Law Group entitled: “When is Insurer’s Delay a Breach?.” In the article, Mr. McKennon and Mr. McMillen discuss an important decision from the U.S. District Court for the Northern District of California, Travelers Indem. Co. of Connecticut v. Centex Homes, 11-CV-03638-SC (N.D. Cal., filed Oct. 8, 2015) in which the court wrestled with the issue of how much delay is too much before an insurer crosses the line and breaches its defense duty. In other words: What is the point at which an insurer’s delay in defending amounts to a breach of its duty to defend?