Filed Under:,

Appeals Court Rules Against Disability Insurer

(AP Photo/Wally Santana)
(AP Photo/Wally Santana)

A 3-judge panel at the 9th U.S. Circuit Court of Appeals has decided 2-1 to give a paralyzed California man a new chance to get more benefits from a group long-term disability (LTD) insurance carrier.

In a split decision, the panel majority found that a U.S. District Court judge should have paid more attention to how much the fact that the plan administrator, Unum Life Insurance Company of America, was also the plan insurer should have affected the court's analysis of whether Unum Life might have abused its discretion to interpret the group LTD policy.

Unum agreed that Stephan was permanently disabled. When the company calculated Stephan's monthly benefits, it based the calculations on Stephan's monthly salary and excluded Stephan's annual bonus.

Like many insurance policies, the group LTD plan that covered Stephan included a provision giving the insurer the discretion to interpret the terms of the policy. The federal courts generally hold that, when a benefit plan includes a discretionary clause, the courts can review the facts in a benefits decision involving the plan from scratch only if the insurer appears to have abused its discretion.

Featured Video

Most Recent Videos

Prospects not listening to voice mail? Arrange a phone date

Provided by LIFEHEALTHPRO

Redesigning your phone life is more important than finding the “best words” for a voice mail in today’s culture.

Behind the scenes with Vicki Gunvalson [VIDEO]

Provided by LIFEHEALTHPRO

In this exclusive interview, Vicki Gunvalson shares how she built a $15 million a year annuity business by planning for...

Regulator: Market may need to reinvent LTCI

Provided by LIFEHEALTHPRO

Cioppa says Maine's governor wants to spur the creation of better products.

Dementia: It's more than Alzheimer's

Provided by LIFEHEALTHPRO

An association calls for policymakers to remember lesser-known neurodegenerative conditions.

Related resources

More Resources

Comments

Power your business with up-to-the-minute insurance news, analysis, and best practices from LifeHealthPro Daily eNewsletter – FREE.

Power your business with LifeHealthPro Daily eNewsletter – FREE.

Enter a valid email address.
Close
Nichole Morford

Nichole Morford
Managing Editor

Thank you for subscribing to LifeHealthPro Daily!

Check Out More eNewsletters Now! Close

Advertisement. Closing in 15 seconds.