Insurance Company Bias in ERISA Cases: Hartford’s History of Bias and Discovery of an Insurer’s Biased Claims Administration Process

Posted in: Abuse of Discretion, Conflict of Interest, Disability Insurance, Discovery, ERISA, Health Insurance, Insurance Litigation Blog, Life Insurance September 26, 2018

The Employee Retirement Income Security Act (“ERISA”), a 1974 federal law, sets minimum standards for many employee benefit plans and serves to provide protection for individuals in these plans.  Discovery in ERISA cases is often limited because the statute’s primary goal is to provide inexpensive and expeditious resolution to employee benefit claims.  District courts are generally limited to the administrative record unless a so-called structural conflict of interest exists.  Considering that insurers make benefit determinations on life, health and disability insurance claims and profit when an adverse decision is made, this scenario creates an inherent conflict of interest whenever an insurer administers a claim.

Courts find that a conflict of interest exists where the “entity that administers the plan, such …

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When Guarding the Henhouse, Some Foxes Go Rogue: When an Insurer’s Conflict of Interest Factors into Administrating Group Long-Term Disability ERISA Plans

Posted in: Abuse of Discretion, Accidental Death or Dismemberment, Conflict of Interest, Disability Insurance, Disability Insurance News, ERISA, Health Insurance, Insurance Litigation Blog, Life Insurance, News July 25, 2018

Few Americans can retire on their savings alone.  Many workers participate in an employee benefits plans, which serve to provide financial security in case of disability or retirement.  In the case of insurers that decide who qualifies for life, health and disability insurance benefits, there exists a major concern about the significant conflict of interest that exists when these insurers make these decisions and also pay for these benefits.  Will these insurers exalt their own interests of bottom line profitability over the interests of ERISA plan participants and beneficiaries who file claims for life, health and disability benefits? It is not a leap of logic that this conflict of interest results in insurance companies wrongfully denying ERISA benefit claims.

In

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Ninth Circuit Grants a Small Reprieve to the Abuse of Discretion Standard of Review, Ruling That Discretionary Language Provisions in Self-Funded ERISA Will Apply

Posted in: Abuse of Discretion, De Novo Review, Disability Insurance News, ERISA, Insurance Litigation Blog, Standard of Review August 24, 2017

When litigating ERISA-governed short-term disability, long-term disability, life and medical insurance claims, a major consideration is which “standard of review” will apply to the Court’s review of the insurer’s decision – abuse of discretion or de novo.  The de novo standard of review is more claimant friendly.  When applying the abuse of discretion standard of review, the Court is required to give some deference to the insurer’s decision.  Under the de novo standard of review, the Court does not give any deference to the insurer’s decision, but simply makes a determination as to whether available evidence establishes that the insured was disabled under the terms of the Plan.

The abuse of discretion standard of review, which is friendlier to insurers, …

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9th Circuit puts final nail in coffin for discretionary clauses in insurer-funded ERISA plans

Posted in: Abuse of Discretion, Case Updates, De Novo Review, Disability Insurance, Disability Insurance News, ERISA, Health Insurance, Insurance Litigation Blog, Life Insurance, Policy Interpretation, Preemption, Standard of Review May 24, 2017

Disability and life insurers frequently include clauses in their insurance policies affording them complete discretion to decide whether a claim has merit.  The clauses usually state the insurer has total discretion to decide whether the claimant is eligible for the policy’s benefits, to decide the amount, if any, of benefits to which they are entitled, to interpret the policy’s terms how they see fit, or something similar.  Employers regularly include these same types of “discretionary clauses” in their employee welfare benefit plan documents, and if a group insurance policy is the funding source of the plan’s benefits, they then delegate that discretion to decide the merits of claims to the insurer.

Employee benefit plans and the corresponding group insurance policies …

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How Do Insurers Deny Valid Disability Insurance Claims?

Posted in: Abuse of Discretion, Bad Faith, Disability Insurance News, ERISA, Insurance Bad Faith, Insurance Litigation Blog February 08, 2017

The McKennon Law Group PC periodically publishes articles on its California Insurance Litigation Blog that deal with related issues in a series of articles dealing with insurance bad faith, life insurance, long-term disability and short-term disability insurance, annuities, accidental death insurance, ERISA, and other areas of the law. This is the second in a series of articles on How Insurance Companies Deny Claims. To speak with a highly skilled Los Angeles long-term disability insurance lawyer at the McKennon Law Group PC, call (949)387-9595 for a free consultation or visit our website at www.mckennonlawgroup.com and complete a free consultation form.

In our recent article entitled “The Prevalence of Life, Health and Disability Benefit Claim Denials is Astounding: It’s Worse Than You …

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The Prevalence of Life, Health and Disability Benefit Claim Denials is Astounding: It’s Worse Than You Thought

Posted in: Abuse of Discretion, Bad Faith, Disability Insurance, Disability Insurance News, ERISA, Health Insurance, Insurance Bad Faith, Insurance Litigation Blog, Life Insurance February 02, 2017

The U.S. Department of Labor estimates that a whopping 75 percent of long-term disability claims are denied.  With over six decades of collective experience representing both insurers and their policyholders, the lawyers at McKennon Law Group PC have seen insurers routinely deny valid claims.  But that DOL statistic shocked even us!  Irrespective of the precise percentage, one thing is certain: life, health and disability insurers often deny valid benefit claims.  They deny claims at such an astounding level it leaves reasonable people wondering – is it an ingrained business practice aimed at maximizing insurer profits?

There is empirical support.  According to a recent column in the Los Angeles Times about denied health insurance claims:

Insurance companies are playing the odds …

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Robert McKennon Publishes Article: Ninth Circuit: 'Independent' Physicians may Favor Insurers

Posted in: Abuse of Discretion, ERISA, Insurance Litigation Blog, Legal Articles, News Blog, Standard of Review September 08, 2016

In the September 8, 2016 edition of the Los Angeles Daily Journal, Robert McKennon of the McKennon Law Group published an article regarding the use of so-called “independent” physicians used by insurance companies as a pretense to deny valid claims.  In the article entitled “9th: ‘Independent’ Physicians may Favor Insurers,” Mr. McKennon summarized the recent U.S. Court of Appeals for the Ninth Circuit case, Demer v. IBM Corporation LTD Pan, 2016 DJDAR 8929 (9th Cir. Aug. 29, 2016), in which the Court noted that insurance companies frequently pay doctors a substantial amount of money to review files, and therefore their opinions are likely biased in favor of the insurance company that pays them.

The article is posted below with …

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With Discretionary Language Even Barred in Self-Funded ERISA Plans, is This the Death of The Abuse of Discretion Standard of Review In California?

Posted in: Abuse of Discretion, De Novo Review, Disability Insurance News, ERISA, Standard of Review October 12, 2015

Recently, we explained that District Courts within the state of California, applying California Insurance Code section 10110.6, ruled that, even if an insurance Plan contains language giving discretion to a claim administrator, that language is unenforceable, and de novo is the proper standard of review.  See The Death of the Abuse of Discretion Standard of Review in ERISA Disability Insurance Cases in CaliforniaA recent ruling expanded the application of California’s anti-discretionary language statute to self-funded plans, further signaling the end of the abuse of discretion standard of review in California Federal Courts.…

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ERISA Disability Insurance Claimants Take Note – Discovery Is Allowed In De Novo Review Cases

Posted in: Abuse of Discretion, De Novo Review, Disability Insurance News, ERISA, Standard of Review September 14, 2015

Well-intentioned policymakers enacted the Employee Retirement Income Security Act of 1974 (“ERISA”) over forty years ago to provide for the protection of participants’ employee benefits in part by establishing a uniform set of rules to ensure efficient proceedings.  One of these notable rules limits the scope of permissible evidence for actions commenced under ERISA section 502(a)(1)(B).  This scope of evidence further depends on whether the reviewing federal court employs an abuse of discretion, or de novo, standard of review.  Because discovery can be an expensive and time consuming process, insurers and claims administrators often take the position that discovery is irrelevant and not permitted under ERISA.  As the cases below show, although limited, discovery is not forbidden in de novo …

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Insurers Do Not Have Discretionary Authority, Absent Clear Language in Official Plan Documents

Posted in: Abuse of Discretion, Administrative Record, Case Updates, De Novo Review, Disability Insurance, Disability Insurance News, ERISA, Insurance Litigation Blog, Insurance Questions and Concepts, Policy Interpretation, Standard of Review April 30, 2015

In actions brought under the Employee Retirement Income Security Act of 1974 (“ERISA”), two roads diverge in federal court—and the court’s choice regarding the applicable standard of review can make all the difference in the scope of permissible evidence.  If the court applies the abuse of discretion standard of review, the court more typically (but not always) only considers evidence received by the insurer in time for its decision and limits its review to the “administrative record” to determine whether the insurer’s denial was an abuse of discretion.  Alternatively, the court may review a case “de novo,” and may consider documents not previously provided to the insurer to determine whether the insured is entitled to benefits. …

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