Robert J. McKennon to Present Life Insurance Seminar for OCBA on August 27, 2014

McKennon Law Group PC founding partner Robert J. McKennon will speak on an MCLE panel for the Orange County Bar Association Insurance Law Section on August 27, 2014 discussing “Recent Developments and Interesting Issues in Life Insurance Law.” Mr. McKennon, an attorney who currently represents insurance claimants after over two decades representing insurers, and Laura K. Kim, an attorney who currently represents insurance companies, agents and brokers in insurance litigation, will provide information to help litigators assess the issues associated with life insurance litigation to ensure that counsel for both parties are able to properly represent their clients. The MCLE event is scheduled to take place at the OCBA headquarters from 12:30 PM – 1:30 PM and registered attendees will receive 1.0 hour of MCLE credits.

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Should You Hire an Attorney to Assist You with Your ERISA Disability Appeal?

If your disability policy was issued and paid for by your employer, it is likely governed by the Employee Retirement Income Security Act of 1974, commonly referred to as ERISA. ERISA is a complex statute that even scares off many experienced insurance attorneys. If your claim for disability benefits, made under an ERISA plan, is denied, you are not allowed to immediately file a lawsuit to collect your past due benefits. If you do, the court will dismiss your claim. Instead, you are required to appeal that claim decision to the very company that denied your claim in the first instance.

When appealing the denial of a short-term disability or long-term disability claim, many claimants make the mistake of handling the appeal without the assistance of an attorney. This can be a costly mistake, as the appeal is the most important part an ERISA claim because it likely represents a claimant’s final opportunity to present evidence to support his or her claim. Further, claimants who try to handle their own appeal often harm their claim.

One reason for this is that when you appeal the denial of your claim for benefits, the insurance company NEVER TELLS YOU that, if your case goes to trial, you will likely not be allowed to offer new medical records or other evidence to support your claim.  Instead, you will be limited to the documents already in the insurance company’s file, called the Administrative Record.  Thus, the worst thing you can do is simply tell the insurance company that you disagree with their decision and would like to appeal without offering any new evidence or arguments for disability. Such appeals are doomed to fail. You will need to offer new evidence and/or information, not only to support your appeal, but also to use later in court.

Also, you usually only have 180 days after the denial to appeal the claim. The sooner you contact an attorney to assist you, the sooner that attorney can obtain your file, see what is missing and work with you to ensure that the Administrative Record contains sufficient medical evidence to support your claim. An attorney can also ensure that you file your appeal in a timely manner. A failure to complete your appeal in time could mean that you waived your right to bring a lawsuit challenging the claim decision.

An experienced ERISA attorney can also help identify problems with the insurance company’s decision, and raise those issues with the insurance company. That way, at trial, the Court will see that the insurance company was made aware of its errors, but failed to correct them. In addition, when confronted with the arguments of experienced ERISA attorneys such as those from McKennon Law Group PC, the insurer or administrator will often reverse itself and approve the claim for benefits.

Accordingly, when appealing a claim decision under a short-term disability insurance policy, long-term disability insurance policy or life insurance policy or plan governed by ERISA, the best thing you can do to increase your chances on appeal is to immediately hire an experienced ERISA attorney to help you fight for your benefits.

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New California Law Requires that Short-Term Disability Policies Provide Coverage for Severe Mental Illness

In a victory for insurance consumers and mental health advocates, a recent change to the California Insurance Code mandates that short-term disability insurance policies provide coverage for “severe mental illnesses” as that term is defined in the Insurance Code.

Passed in 2013, and signed in to law by Governor Jerry Brown on October 4, 2013, Assembly Bill No. 402 (“AB 402”) added Section 10144.55 to the Insurance Code, effective July 1, 2014. Section 10144.55 requires that every disability insurance policy with “a short-term limited duration of two years or less,” provide coverage for disabilities caused by severe mental illnesses. Section 10144.55(b) defines “severe mental illnesses” as schizophrenia, schizoaffective disorder, bipolar disorder (manic-depressive illness), major depressive disorders (including postpartum depression), panic disorder, obsessive-compulsive disorder (OCD), pervasive developmental disorder (autism), anorexia nervosa or bulimia nervosa.

AB 402 was introduced by California Assemblymember Tom Ammiano, and passed the California Assembly by a 57-12 vote. When the Bill was being considered by the California Senate Insurance Committee, Assemblymember Ammiano argued that:

[A]ccording to the 2010 United States census, approximately 1.2 million adults live with serious mental illness. Most of these adults continue to work right through their mental illness utilizing sick days on occasion when symptoms are severe. Occasionally, employees may need a longer period of time to adequately recover from a severe mental illness or transition onto a new medication. California State Disability Insurance can pay for a portion of an employee’s salary, but to keep the employee’s income whole, many rely on short term disability income insurance to make up the remaining lost wages and allow an injured person to continue paying mortgage, rent, tuition and car payments, as well as help cover expenses for food, child care and utilities. When these policies exclude coverage for mental illness or injury, these families are left with the decision of working against their doctor’s orders and placing employers and fellow employees at risk or facing often unmanageable financial burdens.

Following the passage of California’s Mental Health Parity Act (“Parity Act”), California already required that health insurance policies provide the same coverage for severe mental illnesses as other health issues. Now, with the passage of AB 402 and the addition of Section 10144.55 to the Insurance Code, California workers with short-term disability policies that are issued, amended or renewed on or after July 1, 2014 will have coverage if a “severe mental illness” temporarily prevents them from returning to work.

Filing a disability claim can be a complex and daunting progress, especially when the claimant suffers from a mental illness. Accordingly, it is absolutely crucial that claimants seek the advice of attorneys who have knowledge and experience in this highly specialized area of law. The attorneys at McKennon Law Group PC specialize in handling and litigating disability insurance claims, including short-term disability insurance claim and mental health claims.

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Insurance Companies May Conduct Orwellian Investigations in Order to Deny Disability Benefits

Disability typically offer their insureds little insight into their claims administration processes. If you are waiting for a decision on your claim, or anticipate filing a disability claim soon, be alert that your insurer will thoroughly investigate your claim and actively search for reasons to deny your claim for disability benefits. In order to recover on your disability claim, your disabling condition must be accurately stated and well-supported. In addition, you need to make sure that, after submitting your claim for benefits, your actions do not present a false picture of your conditions, as insurers will likely seize upon any opportunity to challenge an otherwise valid claim. Here, we focus on surveillance and social media.

Surveillance

Insurers often hire outside investigators to conduct surveillance in the hopes of catching claimants engaging in activities that cast doubt on their disability claims. An insurer may request surveillance prior to approving your claim, or after you have been paid benefits for a while. Sometimes, field investigators will schedule interviews to take place at claimants’ houses, or other agreed upon locations. An investigator may ask to videotape the session or take photos of the claimant. It is also not uncommon that insurers will ask a claimant to attend an independent medical examination or a Functional Capacity Examination and then videotape their claimants as they come and go to these examinations. Other times, insurers will ask a claimant to complete a list of the daily activities and then will dispatch field investigators to secretly videotape claimants performing regular daily activities including driving, grocery shopping, taking out garbage or working out at the gym to see if these activities are consistent with a claimant’s stated activities of daily living. Insurers may view these activities in a vacuum and decide that your limited ability to perform an activity means your condition is not so serious that you cannot work.

For instance, an insurer may point out that its videotape of a claimant driving for thirty minutes suggests the claimant is capable of prolonged sitting and working at a full time sedentary job, or the videotape of a claimant carrying a few grocery items contradicts an alleged back injury. Be wary of engaging in activities or taking actions which may produce evidence to weaken your claim. If an insurer misinterpreted an activity as a basis to deny your claim, you should challenge its decision or hire an experienced attorney to do so on your behalf.

Social Media

Over the past decade, social media has advanced to a point where it is integrated into our lives and savvy insurers embrace this trend by scouring Facebook, Twitter, Linkedin, online dating sites, and other networking sites using only a claimant’s name or email address. Often times, the information found is taken out of context to justify a denial of a valid claim. For example, insurers may find a dating profile which presents an eligible bachelor as athletic, and question the scope of his functional limitations. Similarly, insurers may view vacation pictures on Facebook as contradicting claims of financial or emotional distress, and posed pictures as contradicting the extent of your injuries. Even if posts were made or pictures were taken prior to the onset of a disability, an insurer may overlook the date and fixate on what they find as contradictory to your current restrictions and limitiations. In addition, insurers may utilize any information found to discredit claimants in litigation. After filing a claim, consider terminating your social media accounts or at least locking or privatizing all your social media accounts so that only immediate or close contacts have access to what you post online. Also, be aware of what you are posting so that your insurer cannot use this information to deny your disability insurance claim.

For additional information, please see our FAQs for Can social media impact a claim for disability benefits.

McKennon Law Group PC is very experienced with handling short-term and long-term disability insurance claims and for many years their attorneys actually represented insurance companies. Call us for a free evaluation of your disability insurance claim.

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Insurers’ Bad Faith at Different Steps of the Insurance Claims Process

California law imposes an implied covenant of good faith and fair dealing in insurance contracts under which neither party may act so as to injure the rights of the other to receive benefits under the contract. Insurers whose actions harm the rights of their insureds to receive contracted-for insurance benefits breach this implied covenant of good faith and fair dealing, or act in “bad faith.” An insurer’s bad faith may occur at many stages of the claims process, even after the initial denial. Accordingly, insureds should protect their interests and be mindful of potential bad faith on the part of their insurers, from the claims determination process and in some cases, the insurer’s litigation tactics.

Bad Faith in Determining or Administering Insurance Claims

Most bad faith suits against insurers allege unlawful or improper behavior during the claims administration process. Indeed, insurers often engage in unreasonable behavior in order to deny claims and increase their bottom lines, which effectively places burdens on insureds to challenge these denials. Evidence of bad faith may arise from the affirmative actions of the insurer, such as misinterpreting claims information, conducting biased reviews, attempting to settle claims for unreasonably low amounts or setting unreasonable or impossible standards of evidence in order to avoid approving a claim. Conversely, an insurer’s bad faith may be reflected by its inactions, such as failure to communicate with insureds or failure to conduct reasonable investigations into the circumstances surrounding claims.

Bad Faith Following a Denial of an Insurance Claim

An insurer’s duty to act in good faith toward an insured continues even after it issues a denial. For example, an insurer must provide insureds with a clear and reasonable explanation for its denial decision. In general, this explanation should clarify why the claim was not payable, reference any applicable policy exclusions and in some cases provide guidance of what an insured needs to do to perfect the claim. Failure to do so may be evidence of bad faith.

Bad Faith in Coverage Litigation

The California Supreme Court has held an insurer’s duties of good faith and fair dealing do not end once litigation begins. In White v. Western Title Insurance Co., 40 Cal. 3d 870 (1985) (superseded by statute on other grounds), the Court allowed post-litigation actions, including the insurer’s unreasonable settlement efforts, as evidence to support a claim for bad faith. Although California courts have declined to broaden this holding, the decision still serves to curb abusive conduct by insurance companies. Subsequent cases have held an insurer may be acting in bad faith in failing to fully investigate a claim, even if litigation is pending, and if the insurer engages in unreasonable conduct in addition to litigation, such as by seeking declaratory relief against the insured, threatening baseless litigation and instigating criminal investigations. Although these situations occur less frequently, these examples show an insurer does not have a free pass to engage in bad faith after issuing a denial, or once litigation commences.

Insureds have a legal and contractual right to expect insurers administer claims in good faith and provide coverage when appropriate under the insurance contract. If insurers act unreasonably in order to issue denials, insureds should consult experienced insurance litigation attorneys in order to bring suit for policy benefits and other damages, including consequential damages, compensatory damages, punitive damages and attorneys’ fees and costs.

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McKennon Law Group PC’s Very Recent Success Stories Litigating California Disability Insurance Claim Denials

The dual roles insurers hold, as funding sources and claim administrators of disability plans, often impact their impartiality. Indeed, insurers have the discretion and financial incentive to deny claims and often do so improperly. Claimants may shudder at the thought of an insurer’s access to nearly unlimited resources, trained claims personnel and attorneys, and stop fighting for their benefits in light of their insurer’s seeming decided advantage. Although recovering long-term disability insurance benefits can be an uphill battle, pursuing a denied claim for benefits is very often well worth the effort.

If insurers deny insurance claims in bad faith or by abusing their discretion, claimants may be entitled to recover past-due policy benefits plus future benefits, consequential damages, emotional distress and punitive damages (for individual policies) and attorneys’ fees and costs and interest (for employer-sponsored policies governed by the Employee Retirement Income Security Act of 1974 (“ERISA”)). Accordingly, claimants should consult with an attorney experienced in handling disability/ERISA insurance claims before forfeiting their claims for disability benefits. Experienced attorneys can help evaluate claims, communicate with insurers and preserve litigation rights. Below are a few cases in which we have helped clients recover their disability benefits:

  • Following a field engineer’s an on-the-job accident, examining doctors determined he was over 50% functionally impaired and unable to compete in the job market. The insurer terminated his long-term disability benefits after about a year, stating he was capable of working “any occupation.” Less than three months into litigation, McKennon Law Group PC convinced the insurer to reinstate his benefits and pay interest on the past due benefits. In addition, McKennon Law Group PC is currently pursuing a bad faith claim against the insurer for attorneys’ fees, consequential damages, emotional distress and punitive damages worth several million dollars.
  • When a dental hygienist purchased two individual disability policies, the insurer’s agent negligently misrepresented her income on her applications. Based on this misrepresentation, the insurer issued, and the hygienist paid for, policies with higher premiums and benefits than it otherwise would have. When the hygienist filed for disability benefits, the insurer accused her of fraud and denied the claims. McKennon Law Group PC convinced the insurer to pay all of the past-due and ongoing benefits under the policies as issued and obtained a large six-digit settlement against the agent. McKennon Law Group PC is currently pursuing a bad faith claim against the insurer for attorneys’ fees, consequential damages, emotional distress and punitive damages worth several million dollars.
  • An escrow officer was diagnosed with a variety of debilitating conditions. The insurer terminated her long-term disability benefits after one year, based on its paid physician’s determination that her medical diagnoses, evaluated individually, did not render her disabled. McKennon Law Group PC convinced the insurer to reverse its decision, reinstate the escrow manager’s full benefits without a mediation and pay interest on her past-due benefits. A motion for attorneys’ fees and costs is pending.
  • A courier was forced to stop working after her arthritis caused severe hip and abdominal pain such that she could not tolerate the extensive driving, bending and lifting required for her occupation. The insurer ignored evidence of multiple surgeries and other serious medical issues, and denied the claim. McKennon Law Group PC challenged the insurer’s denial and the insurer placed the courier back on claim and paid all past-due benefits and is paying all future benefits. In addition, the insurer paid her substantial attorneys’ fees.
  • After an attorney became disabled, she worked another part-time job. Her insurer denied her claim, stating improperly that she was capable of working at this second job. McKennon Law Group PC convinced the insurer reverse its decision and pay a six-digit settlement to buy out her policy.
  • A senior analyst at Bank of America stopped working due to severe arthritis. The insurer paid some short-term disability benefits then terminated the disability insurance claim. McKennon Law Group PC contacted the insurer, and the insurer conducted another review of the senior analyst’s claim, overturned its initial denial, paid back the past-due short term benefits and approved his long term disability claim.
  • A software developer was unable continue working following postoperative complications which caused persistent pain. McKennon Law Group PC subsequently filed a complaint and argued the insurer misinterpreted the medical evidence. While the case was pending, McKennon Law Group PC convinced the insurer to place the software developer back on claim and to pay all past-due disability benefits and to pay on-going disability benefits. McKennon Law Group PC then obtained a court order requiring the insurer to pay the software developer’s attorneys’ fees and costs.

All of these clients came to our firm desperate to have their disability insurance benefits paid. While your case may be different, these success stories show how the attorneys at McKennon Law Group PC have helped a variety of policyholders who had their disability insurance claims denied receive the benefits they deserved. If you are in need of highly experienced and qualified attorneys to handle your ERISA or individual disability insurance claims denials, call us for a free consultation.

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Robert J. McKennon Named “2014 Top Attorney” By the Orange County Register’s OC Metro Magazine

McKennon Law Group PC founding partner Robert J. McKennon was named as a 2014 “Top Attorney” by the Orange County Register’s OC Metro Magazine. This prestigious list identifies the top attorneys practicing in Orange County, California. Mr. McKennon was recognized for his work handling insurance coverage claims and litigation.

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Components of an ERISA Disability Insurance Claim

Under your employer-sponsored disability policy, you are entitled to income replacement benefits if you are disabled and unable to work due to an injury or sickness. However, recovering on the policy may involve navigating a multistep process. Below is a summary of different components to a claim for disability benefits.
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Components of an Individual Long-Term Disability Insurance Claim

When you purchase an own occupation individual disability insurance policy, the insurer promises to pay for total disability or residual disability in the event you are unable to perform the substantial and material duties of your occupation due to an injury or sickness. However, recovering under your disability policy may entail a multistep process as summarized below.
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About Directors and Officers Liability Insurance

Directors and officers liability insurance, also called D&O, covers a company’s former and current directors and officers, as well as the corporate entity, against defense fees, costs, and damages in connection with a lawsuit alleging that they committed certain wrongful acts or omissions while acting as directors and officers for the company.

Directors and officers liability insurance is liability insurance payable to the directors and officers of a company, or the company itself, as reimbursement for losses related to defense costs as a result of loss related to the legal action taken alleging the insured committed wrongful acts in their capacity as directors and officers.

D&O insurance policies may cover defense fees and costs in connection with criminal and regulatory investigations and lawsuits. D&O insurance claims potentially cover claims made by individual and company shareholders in customers, regulators, shareholder-derivative actions, and competitors.

D&O policy forms often increase legal fees and costs necessary to resolve disputes between those insured and their D&O insurers since they vary from insurer to insurer and industry to industry.

We are well suited to litigate your D&O insurance claims.We are nationally recognized experts in insurance bad faith law and litigation, and also have experience litigating D&O insurance claims. We will aggressively litigate your case to achieve success. Contact us today to learn how our Los Angeles and Orange County Attorneys can help you with your D&O insurance claims.

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