EASTERN CLAIMS CONFERENCE 2009

KEYNOTE SPEAKER - Dr. Sheila Murray Bethel


Dr. Sheila Murray Bethel provided a dynamite appearance at this year's Eastern Claims Conference in New York City on March 2, 2009. She spoke just one day prior to releasing her latest book: A New Breed Of Leader
(8 Qualities That Matter Most In The Real World,
What Works What Doesn’t & Why)
By: Sheila Murray Bethel, PhD.

Here are some highlights as outlined by the author:

The winds of change are blowing across the globe. They demand a new feeling of purpose, new actions, and yet-unseen solutions. People everywhere hunger for a new breed of authentic men and women who are physically strong, mentally quick, politically limber, emotionally stable, intellectually superior and unselfish consensus builders.
Truly great leaders of the 21st century will possess a strategic sense, an inherent understanding of how the framework of their thinking and the tides of time fit together and how their powers should be applied to achieve a larger purpose.
It is time to view the tried and true concepts of leadership through a new filter and then update them. By combining the best leadership qualities of the past with a set of new descriptors, measures and actions, we will begin to change the huge disconnect that exists between our daily lives and our leaders in business, government, and other institutions.

The 21st Century Leadership Puzzle

There are eight qualities in the New Breed Leadership Puzzle. The value of each piece lies in the tools it gives you to shape your personal leadership strength and to reinforce your ability to serve others.


Competence Matters…Building Purpose
Competence is doing the right thing, the right way, at the right time and it tops your list of leadership qualities that matter most. When you know what you are doing, have the experience and knowledge to take risks and make wise decisions, have a deep sense of purpose and a healthy dose of charisma, you can lead people through beneficial actions into positive results. living in a constant state of innovation where your competence is continually nurtured, moves your dream into reality. When you recognize that competence begets competence and that knowledge shared is knowledge multiplied, you’re saying, in effect, to your followers, “We can learn and grow together.” You build a sense of connectedness and a community of growth. When vision and purpose are backed by competence, you can move mountains.

Accountability Matters…Fostering Trust
Very little in the realm of leadership is more important than the trust that accountability generates. Leading is primarily about the relationship between the leader and the led, and trust is at its core. It’s the contract you make with your followers by holding yourself to account and then following up with strong ethical actions. Your leadership deepens when followers know you’re reliable and that you are a person on whom they can depend
Accountability is about doing what’s right even when no one is looking. It is the backbone of any successful entity and continually speaks to the integrity and ethics of your organization and you as a leader. Whether you’re leading at home, in the community or at work, even one example of accountability can set others on the right road.

Openness Matters…Generating Integrity
Openness involves candor and frankness. Its most important byproduct, integrity, is at the heart of earning the right to be called a leader. Integrity reveals your true intentions and greatly affects your followers and your entire organization because it reflects on everyone who is associated with you. Transparent actions and policies are the currency by which you garner the loyalty, commitment and willingness of your followers. When your words and actions match, credibility cannot help but follow, and then you earn trust. Being an open leader enables you to lift everyone and everything to a better place because of the integrity it generates. It is vital for leaders at all levels, in all sectors, across the globe to embrace a level of openness that transforms ideas and processes, visions and strategies.



Language Matters...Connecting Relationships

The power to communicate is the key to forging productive relationships. Your words inspire or discourage, hurt or help, divide or connect, cause fear or give hope. String them together artistically and sensitively, and they become a brilliant instrument by which you connect with your followers
The impact of your skillful use of language cannot be exaggerated. You never know whom you will touch with your words or how you will influence their lives. Be assured that when you speak in aspirational language, you lift minds and hearts. When you speak in clear, honest language, human bridges are built. When you use your verbal expertise to reinforce the organization’s goals, values, ideas, and ideals in the minds and spirit of your followers, your communication becomes an art form. You serve your followers best when your mission is articulated by both what you say and what you do. Words really matter.


Values Matter…Forging Community

Your principles are like a fixed beacon giving direction and purpose to the other seven qualities that matter most to a New Breed Leader. “Values” is a subtle, intangible and elusive quality with different meanings for different people under different circumstances. You have values that give you a moral compass. Most companies and organizations have a set of values that represent them to their constituents. Even our communities have certain values that make them different from a nearby town or city. Because of the enormous daily changes and challenges it is a worthy and honorable process to closely examine these values that influence you and your “communities.” The authenticity you establish from a renewed set of principles gives you the creditability to guide others as they navigate the sometimes-daunting issues of our new century.


Perspective Matters…Establishing Balance
Now is time to fill your leadership toolbox with as much intellectual, emotional and physical perspective as you can gather for your journey to the new horizons of the future. Most importantly, when you have the counterpoint of past and present to help you transition into the future; you are ready to be a New Breed leader. Your fresh clear perspective and the balance it generates—yields a sense of promise, a sense of a better life, and a sense of progress that builds community and connectedness. As you learn from past failure, you are less likely to make the same mistake again. When you gain insight from past success, you can preserve your strengths and build on them. A real world, true-to-life perspective gives you the staying power to handle the crush of daily events.


Power Matters…Mastering Influence
Power is the prime mover of people and events. You can’t lead effectively without it. Great leaders do not shrink from power, nor do they seek it unnecessarily. They know that having clout often intimidates others, so they use their power judiciously. They “pull rank” only in emergencies. It is about influencing others to follow you, even when they don’t know where you are headed. Those who make the greatest contribution will use power wisely. They understand that the highest and best use of power is to direct others and help them achieve their full potential.
Of all the examples you set as a leader, the wise use of humble power has the most long term impact. If the basis of your desire for power is one of service, then your leadership acquires an aura of dignity and your influence is increased a thousand fold.

Humility Matters…Inspiring Authenticity
Humility, like leadership itself, it is earned, not claimed. The most humble and effective leaders do not even think about taking steps to be humble. They just “are.” Humility is a state of “being.” Humility comes from deep within you. It’s how you feel about your self, how you value others. It’s an attitude, philosophy and a belief system that says, “The way for me to be the best leader possible is to be the best servant to my followers.” Authentic leaders know that humility is not weakness and arrogance is not strength. When a leader is humble, it is usually because he or she scores high on emotional intelligence. Such leaders are comfortable with themselves, without a need to constantly talk about themselves or brag about what they have, what they do or who they know.

Transcendent Challenges of 21st-Century Leadership

It is a time of transcendence, a time of limitless possibilities. No generation of leaders, at every level of society and across the globe, has had such an opportunity to solve our greatest problems and bring all peoples together to work and live in a safe and harmonious planet. You can stand up and be counted as one who will do his or her part and knowing that in combination with millions of other leaders, you’ll leave deep footprints forming a global path to a better world for all the generations that follow.
#
(1,414 words.)
© 2009 Dr. Sheila Murray Bethel

Based on the new book, “A New Breed Of Leader, 8 Qualities That Matter Most in the Real World…What Works, What doesn’t and Why,” (Berkley, March 2009), by Sheila Murray Bethel, PhD. Best Selling Author, Global Leadership Expert and Award winning Speaker, www.anewbreedofleader, 800-548-8001

Eastern Claims Conference 2009

Pay valid claims more efficiently and detect fraudluent claims sooner. These are just a few of the topics covered this year, and every year at the Eastern Claims Conference - the premier conference for the life, disability and medical claims industry.

Another terrific line up of speakers is slated for this year's Eastern Claims Conferece ("ECC") scheduled for March 1st - 3rd in bustling NYC! Top special investigative unit leaders, legal specialists, and industry experts will be speaking on the industry's latest trends and hottest topics. STOLI/IOLI, ERISA updates, Deposition prep, and a "Brass Tacks" Disability Round Table discussion group are just a few of the vital sessions you do not want to miss!

The ECC has established itself as the premier destination for nationwide and international claims professionals to gather and get the latest updates on industry devlopments while networking with their peers and the top vendors serving the life, disability and medical claims business. While some are "cutting back," the ECC has gone all out to secure top industry experts and leading professionals to share their knowlegde and experience during these difficult times. Don't miss your chance to learn from the best in the city that never sleeps!

For more information, go to www.easternclaimsconference.com.

ICMG 2009 - How To Run A Successful Conference In A Tough Economy

How do you have a successful conference during a time when almost everything else is trending downward? Two words; Value & Improvisation.

The Inter-Company Marketing Group has long been a unique venue for networking with other industry professionals and forging strategic alliances. Companies participate in ICMG because they have seen the solid track record of ROI for their time and money. In a day of tightening budgets, companies are looking to spend their marketing dollar only where they have the best chance of return. ICMG is well-known for the value they bring to their members.

It was for this reason that it was so surprising to find ICMG was working with marketing consultants from The van Aartrijk Group LLC to better understand what their members wanted and how to best provide it. Whether as a part of that strategy or in addition to it, ICMG also added a group on LinkedIn and enhanced the annual meeting by building it into a networking community. So rather than simply trust what had worked in the past, ICMG instead chose to build on that reputation and deliver an even better product for the future. Improvisation at its finest!

Brave New Workshop, led by Caleb McEwen provided comic relief while communicating the point that improvisation is paramount in today's business world. BNW covered the "8 Secrets of Innovation:"
* Accept all ideas (you don't have to adopt them all...just accept them for consideration)
* Defer judgement
* Share focus/accept all sytles
* Make a declaration (say what you think!)
* Create a "status-less" environment (everyone's ideas matter)
* Create a reward system that recognizes innovation (praise over critique)
* "Yes" first (accept and then add to ideas)
* Perceive change as fuel

If we allow the problems of our times to weight us down, we will be sure to sink. However, if we take hold of the rising tide of change, we can ride the wave of success. Well, if ICMG is any example of the results achieved by seizing the power of change and capitalizing on improvisation - count me in!

Inter-Company Marketing Group meets LinkedIn!

What happens when the most dynamic insurance industry conference meets the leading business networking website? For starters, you get 34 new members in the first week. Not too shabby. Further proof that ICMG attendees understand the benefits of networking.

When Audrey Wittenburg added the ICMG as a group on LinkedIn she started with a question about how existing members are already using the online networking site. This shows the open-mindedness that makes ICMG members successful at creating strategic alliances that add value to their companies. Audrey recognized that LinkedIn is working to connect business professionals in meaningful ways in an online setting. Knowing the existing success of ICMG in making such connections in a conference setting, she recognized the natural alliance.

This alliance will be helpful to ICMG members both prior to and following the show in maximizing their planning and follow up with fellow members. Similarly, alliances forged at this year's ICMG conference will undoubtedly bring success in 2009 for the respective members and their companies. Whether you are a carrier seeking distribution or a distributor seeking products, if you have been to the ICMG before, you probably have a success story to share.

Additionally, service providers such as Disability Insurance Specialists provide the support for the development of new products or any related services that may not be present within the carrier, reinsurer or distribution source. For example, this year we will be co-marketing a new product along with our alliance partner, Vision Financial - Short Term Care Insurance built for the Worksite market.

To be the first to seize this opportunity or simply to tap into the wealth of other products and services provided by Disability Insurance Specialists, we would appreciate the opportunity to talk with you further. C'mon by booth #3 in the exhibit hall or drop a card behind the handsome photos of Tom Loftus, Bill Bossi or Tad Verney on the connection board and we'll be sure to track you down.

See you in sunny Florida!

Supreme Court Rules on Insurer's Conflict of Interest

MetLife (Metropolitan Life Ins. Co.) and Long Term Disability Plan for Associates of
Sears, Roebuck and Company v. Wanda Glenn. US Supreme Court opinion - 6/19/08.

Background:

Glenn was a long-time employee and manager of Sears women's department. She was covered by Sear's ERISA-governed LTD plan, insured by MetLife. The plan documents invested MetLife with discretionary authority. In 2000, Glenn took a medical leave based on cardiac problems (cardiomyopathy and ventricular dysfunction) and submitted a disability claim. MetLife approved the claim (under the own-occ definition), and advised Glenn to seek social security disability income benefits (“SSDI”), which would then be deducted, dollar-for-dollar, from her MetLife benefits. MetLife referred Glenn to an SSDI attorney to represent her, and provided that attorney with medical records from MetLife’s claim file.

The SSA determined that Glenn was disabled and awarded her SSDI benefits. The SSA’s determination was based in part on information not provided by MetLife and in part on the absence of certain MetLife documentation which was not submitted to SSA. (Glenn never submitted to SSA a MetLife APS and PCA stating she could perform sedentary work.) After deducting her attorney’s fees, MetLife recouped from Glenn the balance of the retroactive benefit award, applying it to the resulting overpayment, and reduced Glenn’s monthly benefit by “almost 100%” of her monthly SSDI benefit. Shortly thereafter (at the 2-year test change), MetLife decided Glenn did not meet the policy’s any-occ definition of totally disabled (stating that her condition had improved to the point where she could perform sedentary work) and terminated her benefits. Glenn appealed, presenting to MetLife some (but not all) of the documentation which she previously submitted to the SSA which was not part of MetLife’s file. Specifically, she never presented to MetLife a letter by the APS physician stating she could not work full-time and could not work under any type of stress. MetLife maintained their termination on appeal.

Glenn filed suit in the US District Court and lost, the Court deferring to MetLife’s discretionary authority. Glenn appealed, and the 6th Circuit Court of Appeals reversed, stating that MetLife operated under a conflict on interest and citing various acts supporting that conclusion.

MetLife appealed to the U.S. Supreme Court, which rendered its decision on 6/19/08. Justice Breyer delivered the majority opinion of the Court; Justices Stevens, Souter, Ginsburg, and Alito concurred. Chief Justice Roberts filed an opinion concurring in part and concurring on the judgment, but dissenting relative to how a court should assess a conflict of interest. Justice Kennedy filed an opinion concurring in part and dissenting in part relative to how a court should assess a conflict of interest. He also would have remanded to the 6th Circuit for additional findings.) Justice Scalia filed a dissenting opinion in which Justice Thomas concurred, criticizing how the majority opinion eroded the deference that is to be accorded to an ERISA fiduciary with discretion. He also would have remanded to the 6th Circuit for additional findings.)

Questions Presented to the Supreme Court:

1. Does an insurer who has both discretionary authority to make claim decisions and also funds the plan benefits automatically operate under a conflict of interest?

2. If so, how should that conflict of interest be assessed on judicial review of an adverse claim determination?

Summary:

The Court unanimously agreed that MetLife was operating under a conflict of interest, as its claim determinations had a direct impact on its net income. However, the majority opinion failed to clarify exactly how a theoretical conflict of interest should be factored in to an assessment of whether the conflicted claim administrator abused its discretion. In that respect, federal District (trial) Courts and Circuit Courts of Appeals are somewhat free to continue pursuing divergent standards of review, including the advice contained in the dissenting opinions.

The Existence of a Conflict of Interest:

The Court reiterated that the standard for review of a claim determination made by a claim administrator with discretionary authority is to determine whether the claim administrator abused its discretion. It then stated that the existence of a conflict of interest was just one factor to be considered in making that determination, but in and of itself, does not automatically mean that that the claim administrator necessarily abused its discretion in arriving at a financially self-serving adverse claim determination. The Court then unanimously found that MetLife (or any claim administrator with discretionary authority who is also financially responsible for the payment of claims) necessarily operates under a conflict of interest.

Evaluating a Conflict of Interest:

In reviewing the 6th Circuit’s decision, the Court noted that other factors were considered in arriving at that determination.

The Court of Appeals ultimately set aside MetLife’s denial of benefits in light of a combination of several circumstances: (1) the conflict of interest; (2) MetLife’s failure to reconcile its own conclusion that Glenn could work in other jobs with the Social Security Administration’s conclusion that she could not; (3) MetLife’s focus upon one treating physician report suggesting that Glenn could work in other jobs at the expense of other, more detailed treating physician reports indicating that she could not; (4) MetLife’s failure to provide all of the treating physician reports to its own hired experts; and (5) MetLife’s failure to take account of evidence indicating that stress aggravated Glenn’s condition.

The Court declined to develop a “bright-line” rule for evaluating conflicts of interest and other factors, stating:

Benefits decisions arise in too many contexts, concern too many circumstances, and can relate in too many different ways to conflicts—which themselves vary in kind and in degree of seriousness—for us to come up with a one-size-fits-all procedural system that is likely to promote fair and accurate review.

However, the Court did note several ways that a conflicted claim administrator could reduce, or even eliminate, conflict of interest as a relevant factor.

It should prove less important (perhaps to the vanishing point) where the administrator has taken active steps to reduce potential bias and to promote accuracy, for example, by walling off claims administrators from those interested in firm finances, or by imposing management checks that penalize inaccurate decisionmaking irrespective of whom the inaccuracy benefits.

Chief Justice Roberts, while agreeing with the result, disagreed with how a conflict of interest should be factored in. Specifically, he stated that the existence of a conflict of interest should have no weight, and should not add weight to other factors, unless the claim administrator acted improperly because of that conflict of interest.

The majority’s approach would allow the bare existence of a conflict to enhance the significance of other factors already considered by reviewing courts, even if the conflict is not shown to have played any role in the denial of benefits. The end result is to increase the level of scrutiny in every case in which there is a conflict—that is, in many if not most ERISA cases - thereby undermining the deference owed to plan administrators when the plan vests discretion in them. I would instead consider the conflict of interest on review only where there is evidence that the benefits denial was motivated or affected by the administrator’s conflict. No such evidence was presented in this case. I would nonetheless affirm the judgment of the Sixth Circuit, because that court was justified in finding an abuse of discretion on the facts of this case—conflict or not.

He went on to cite specific examples where the evidence showed that the claim administrator’s conflict motivated an improper determination:

It may, for example, appear on the face of the plan [citation omitted] (offering hypothetical example of a plan that gives “a bonus for administrators who denied benefits to every 10th beneficiary”); it may be shown by evidence of other improper incentives, see [citation omitted] (insurer provided incentives and bonuses to claims reviewers for “claims savings”); or it may be shown by a pattern or practice of unreasonably denying meritorious claims, see [citation omitted] finding a “pattern of erroneous and arbitrary benefits denials, bad faith contract misinterpretations, and other unscrupulous tactics”). The mere existence of a conflict, however, is not justification for heightening the level of scrutiny, either on its own or by enhancing the significance of other factors.

Justice Kennedy agreed with the majority’s analysis, but disagreed with the result. Rather than confirming the 6th Circuit’s decision (reversing MetLife’s determination), he stated the case should have been remanded to the 6th Circuit to determine whether MetLife had taken any of the suggested steps to insulate its claim department from the insurer’s financial considerations, thus extinguishing the conflict of interest as a factor in assessing whether or not MetLife abused its discretion.

But as far as one can tell, the Court of Appeals made no effort to assess whether MetLife employed structural safeguards to avoid conflicts of interest, safeguards the Court says can cause the importance of a conflict to vanish. … By reaching out to decide the merits of this case without remanding, the Court disadvantages MetLife solely for its failure to anticipate the instructions in today’s opinion.

In their dissenting opinion, Justices Scalia and Thomas reviewed the history of ERISA relative to treating a claim administrator in the same way as a trustee.

… our cases make clear that it is to be governed by the law of trusts. Under that law, a fiduciary with a conflict does not abuse its discretion unless the conflict actually and improperly motivates the decision. There is no evidence of that here. …

The Restatement [of Trusts] does indeed list in Comment d certain circumstances (including conflict of interest) that “may be relevant” to deciding whether a trustee has abused his discretion. … In trust law, a court reviewing a trustee’s decision would substitute its own de novo judgment for a trustee’s only if it found either that the trustee had no discretion in making the decision, [citation omitted], or that the trustee had discretion but abused it, [citation omitted.] Otherwise, the court would defer to the trustee. … A trustee abuses his discretion by acting dishonestly when, for example, he accepts bribes. [citation omitted] A trustee abuses his discretion by failing to use his judgment, when he acts “without knowledge of or inquiry into the relevant circumstances and merely as a result of his arbitrary decision or whim.” [citation omitted] A trustee abuses his discretion by acting unreasonably when his decision is substantively unreasonable either with regard to his exercise of a discretionary power or with regard to his assessment of whether the preconditions to that exercise have been met. [citation omitted] And—most important for this case—a trustee abuses his discretion by acting on an improper motive when he acts “from a motive other than to further the purposes of the trust.” … The four abuses of discretion are clearly separate and distinct.

Relative to the deference to be accorded a claim administrator with discretion, Scalia stated:

A trustee without a conflict could take either of two reasonable courses of action, but a trustee with a conflict, facing the same two choices, would be compelled to take the course that avoids the appearance of self-dealing. He would have to do that even if he thought the other one would better serve the beneficiary’s interest, lest his determination be set aside as unreasonable. … A trustee’s conflict of interest is relevant (and only relevant) for determining whether he abused his discretion by acting with an improper motive. It does not itself prove that he did so, …

Reasonable is reasonable. A reasonable decision is one over which reasonable minds seeking the “best” or “right”
answer could disagree. It is a course that a trustee acting in the best interest of the beneficiary might have chosen. Gradating reasonableness, and making it a “factor” in the improper-motive determination, would have the precise effect of eliminating the discretion that the settlor has intentionally conferred upon the trustee with a conflict, for such a trustee would be foreclosed from making an otherwise reasonable decision.

I conclude that the only possible basis for finding an abuse of discretion in this case would be unreasonableness of petitioner’s determination of no disability. The principal factor suggesting that is the finding of disability by the Social Security Administration (SSA). But ERISA fiduciaries need not always reconcile their determinations with the SSA’s, nor is the SSA’s conclusion entitled to any special weight. [Citation omitted.] The SSA’s determination may have been wrong, and it was contradicted by other medical opinion.

We did not take this case to make the reasonableness determination, but rather to clarify when a conflict exists, and how it should be taken into account. I would remand to the Court of Appeals for its determination of the reasonableness of petitioner’s denial, without regard to the existence of a conflict of interest.



Impact:

The Court’s opinion will most likely result in a flurry of activity by conflicted claim administrators (employers administering their own self-funded claims and insurers administering their own insured claims) to insulate their claim departments from financial considerations in order to diminish or extinguish conflicts of interest as a factor in an abuse of discretion assessment. Some companies may look to a TPA, acting independently of any financial considerations, to provide claim services in order to resolve their conflict whereas many would likely prefer to keep their claim administration in-house. In that case, there may be more of move to add such a separation only when claims have already been denied, such as an “appeals only” service. This would allow insurers to keep claims in-house while using the TPA to create a “Chinese Wall” on those claims which present the greatest likelihood of undergoing judicial scrutiny and the ambiguous standard of review described above.

Lessons Learned:

The majority, as well as Chief Justice Roberts, viewed MetLife’s failure to investigate and address the conflicting SSA determination as a significant abuse of discretion. When denying or terminating benefits based on an any-occupation definition of disability relative to a claimant known to have been approved for SSDI, claims associates should consider including in the denial / termination letter, as an additional item to be provided on appeal, all SSDI award letters and any documentation submitted to SSDI not referenced in the denial / termination letter. This should be considered regardless of whether or not the claims administrator assisted the claimant in obtaining SSDI benefits.

6th US Circuit Court of Appeals Supports Claim Outsourcing! (Supreme Court Considers Same)

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.

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!