The Supreme Court agreed to consider whether an insurer has a conflict of interest when they adjudicate claims on policies they sell, according to the attached story printed April 28, 2008 in the Insurance Journal.
http://www.insurancejournal.com/news/national/2008/04/28/89482.htm
"Disability insurance plans cover 28 million Americans, and insurers paid more than $7.2 billion in long-term disability claims to more than 500,000 people in 2006" say sources cited in the report. The Supreme Court is considering whether there exists a substantial financial incentive for the insurance carrier to deny claims in favor of inflated profits.
The 6th US Circuit Court of Appeals ruled in the case Glenn v. MetLife that the insurance carrier must reinstate benefits because they "acted under a conflict of interest," unjustly terminating Glenn's benefits. Solicitor General Paul Clement of the Bush administration offered his opinion that companies like Met who make more money when they deny a claim present a classic case of conflict of interest.
Some argue that costly legal battles associated with unjust denials and bad public image would inflate expenses and decrease sales, sufficient to offset any suggested "gains" which might be garnered by the suggested dubious conflict. This case is clear in individually sold plans, where awards are not altogether uncommon such as the case in Lee Ingalls v. Paul Revere. Revere terminated Ingalls claim with approximately $70,000 of liability remaining. The judgements that followed cost the carrier over $3 million. However, Group LTD claims are covered under ERISA, the Employee Retirement Income Security Act, which limits such extra-contractual damages.
MetLife has appealed the 6th Circuit's decision to the Supreme Court and all eyes will be on the ruling which is expected by July.
Wednesday, May 7, 2008
DIS to present at Munich Re's Customer Appreciation Conference in Charleston, SC
Tom Loftus, VP Business Development will join Bert Sosnin of Munich Re for a presentation on the hidden clues found in Life and Disability claim submissions. Look for our report on the presentation and content following the conference which takes place on May 18 - 20, 2008!
DIS's Bill Bossi making connections at ICMG
Bill Bossi from DIS greets an exhibit hall guest at the InterCompany Marketing Group Conference. It's no coincidence that Jay Pettapiece from Vision Financial was our neighbor in the exhibit hall. DIS and Vision co-promote our combined services through the "Worksite Benefits Alliance," providing turnkey services for products sold in the Worksite.
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