Thinking About a Policy Buyout?
How Lump Sum Settlements Work: Part 2
In this two-part series we are addressing the two most common scenarios in which insurance companies pursue lump sum buyouts. In Part 1, we talked about buyouts for individuals who are totally and permanently disabled and have been on claim for several years. In Part 2, we will address the other scenario in which buyouts occur: after a lawsuit has been filed.
In the context of an individual disability insurance policy, a lawsuit is generally filed in one of two common scenarios: (1) a person on claim with a legitimate disability has their benefits terminated; or, (2) a person with a legitimate disability has their claim denied. A lawsuit is typically considered to be the last line of defense in the disability claims process. By the time a lawsuit has been filed, the claimant’s attorney has likely exhausted every available means to resolve the claim without legal action. Litigation is costly, time-consuming, and can drag on for years.
If an insurance company offers a lump sum buyout during litigation, it will typically be at one of three stages in the case: (1) after the Complaint and Answer are filed; (2) after all stages of pretrial litigation and discovery are complete; or (3) after the claimant/plaintiff wins at trial.
The first stage of any lawsuit is the filing of the Complaint. This is a document the plaintiff files with the court outlining all of the claims and allegations against the defendant. After receiving a copy of the Complaint, the defendant then has a specified period of time in which to file an Answer responding to the plaintiff’s allegations.
Prior to the filing of a lawsuit, a contested claim has likely been reviewed only by the insurance company’s in-house attorneys. However, once litigation begins, the insurance company will retain a law firm experienced in insurance litigation to handle the case. After the filing of the Complaint, the insurance company’s outside counsel will have the opportunity to evaluate the strength of the case and the claim. Viewing the case through the prism of their experience, the insurer’s litigation team may recommend offering a buyout to avoid the risk, costs, and time associated with the lawsuit.
The second point of a lawsuit at which a buyout may occur is after all stages of pretrial litigation are complete. Once the parties have had the opportunity to conduct discovery and litigate any pretrial motions, they will have a full picture of the case and their prospects at trial. Through discovery both sides will be able to obtain all documents and interview all witnesses the other side intends to use at trial. Through the filing of pretrial motions the parties can attempt to prevent or limit the use of certain evidence or witnesses at trial.
At this juncture, the insurance company may seek to avoid the risks of trial and settle the claim before the first juror is ever impaneled. The disability insurance company’s incentive to resolve the case at this point – even after both sides have invested substantial resources in the litigation – is the financial exposure and bad publicity it faces with a loss at trial. Additionally, a bad result at trial for the insurance company could create undesirable legal precedent for future cases.
If a jury (or a judge, depending on the case) determines that the insurance company has unlawfully denied or terminated a legitimate disability claim, the insurer will not only be required to pay the disability benefits the claimant/plaintiff is entitled to, but may also be liable for damages and other costs. The disability insurer may be required to pay back benefits, plaintiff’s attorneys’ fees and costs, consequential damages, and punitive damages.
In the context of a disability insurance lawsuit, consequential damages come in the form of any financial harm to the claimant/plaintiff resulting from the insurer’s denial or termination of benefits. For example, if the insurer’s termination of benefits led to the claimant/plaintiff losing their house in foreclosure, the insurer could be liable for consequential damages. Punitive damages are designed to deter the insurer from denying legitimate disability claims in the future, and can be multiplied several times over if the insurer is found to have acted in bad faith. Additionally, some states allow acceleration of benefits – in which the courts can order the insurer to immediately pay future benefits that would owed to the claimant/plaintiff over the full life of the policy.
The final stage at which a lump sum buyout may be offered is after a victory at trial by the claimant/plaintiff. You may be wondering why anybody would entertain a settlement offer right after a being awarded back benefits, damages, and costs at trial – why accept anything less? The answer is simple: appeals. The insurance company can tie up a trial court victory in the court of appeals for years, which they can use as leverage to offer a settlement smaller than the trial award.
Though these three stages of litigation are the most common points at which a buyout may occur, buyouts themselves are uncommon during litigation. Depending on the situation, the specter of a long, drawn out legal battle can either provide the insurance company with the incentive to settle the lawsuit early with a buyout or harden its resolve to fight the claim to the bitter end. You cannot count on simply filing a lawsuit and expecting the insurance company to be eager to settle. Some insurance companies want to settle early and avoid the financial risks and bad publicity of a defeat at trial, while others take a hard line and use their nearly limitless resources to fight a war of attrition. Ultimately, whether or not a disability insurer offers a lump sum buyout in the midst of litigation depends largely on the individual facts of the case, the risks at trial, and the parties and attorneys involved.
Thinking About A Policy Buyout?
How Lump Sum Settlements Work: Part 1
Lump sum buyouts are a frequent source of questions from our clients and potential clients. With that in mind, the next few posts will address different aspects of the buyout process.
Buyouts typically occur in one of two situations: 1) after you’ve been on claim for several years, or 2) after a lawsuit has been filed. This blog post will focus on the first scenario.
Lump sum buyouts that occur outside of litigation normally won’t occur unless and until the insurance company decides that you are totally and permanently disabled under the policy definition. Typically, the disability insurer won’t consider whether this is the case until you’ve been on claim for at least two years. If the insurer determines that you’re totally and permanently disabled, it will then determine whether it makes sense financially for the company to offer you a percentage of your total future benefits rather than keep paying your monthly benefits for the entire duration of your claim.
To understand how the insurance company calculates whether a buyout is in its financial interest, you should understand how insurance company reserves work. The purpose of reserves is to ensure that the insurance company has the resources to fulfill its obligations to policyholders even if the company has financial difficulties. Thus, disability insurers are required by state regulators to keep a certain amount of money set aside, or “reserved,” to pay future claims. Any money required to be kept in a reserve is money that the insurer can’t spend on other things or pay out in dividends. The amounts required to be kept in the reserve are determined by the state, depending on factors like how much the monthly benefit is and how long the claim is expected to last.
For a disability insurance claim, a graph of the required reserve amount over time looks like a Bell curve: low at the beginning, highest in the middle, and low again towards the end of the benefit period. The ideal time for a settlement, from an insurance company’s perspective, is at or just before the high middle point–typically about five to seven years into the claim, depending on the claimant’s age and the duration of the benefit period. At this point, the company is having to set aside the highest amount of money in the reserve.
If the insurance company can pay you a percentage of your total future benefits, it can not only save money in the long run, but it can release the money in the reserve. The disability insurer can then use those funds for other purposes, including providing dividends for its investors. In addition, the insurance company will save all of the administrative expenses it was putting towards monitoring your disability claim.
In the next post, we’ll address how and why buyouts occur after a lawsuit has been filed.
Ed Comitz and Patrick Stanley Named to Arizona’s Finest Lawyers
Edward Comitz and Patrick Stanley have been selected by their peers as Members of Arizona’s Finest Lawyers. Mr. Comitz and Mr. Stanley practice in the areas of healthcare, disability insurance and commercial litigation. The AFL has a limited membership of individuals who have attained positions of honor and trust in the legal community through their noteworthy achievements.
Disability Insurance Q&A: How Should Doctors Approach Their Treating Physicians About a Disability Claim?
Question: How should doctors approach their treating physicians about a disability claim?
Answer: Your treating physician’s support can often be critical to getting your claim approved. A hurried, uninterested physician may not have time to devote to your claim. In addition, fully discussing your condition with a professional, compassionate treating physician will help ensure supportive medical records. When to discuss your potential claim with a physician is an important timing issue. Also, when the time comes to speak to the treating physician about the claim, a disabled dentist or doctor should ensure that the treating physician understands the definition of “disability” under the insurance policy, so that he or she can accurately opine as to the inability of the doctor or dentist to work.
Some of our previous blog posts on this important issue are available here and here.
Does Your Unum Claims Handler Have a Personal Financial Incentive to Deny or Terminate Your Disability Claim?
The transcript of Unum Group’s May 23, 2013 Annual Shareholder Meeting provides some disturbing insight into what may motivate claims personnel at Unum to deny or terminate a legitimate disability claim.
Unum’s Chief Executive Officer, President and Director, Thomas R. Watjen reported to the shareholders that they had “overwhelmingly approved” an employee cash incentive system based on performance:
The fourth item of business is the approval of our annual incentive plan, which provides employees the opportunity to earn cash incentive awards based primarily on the company’s performance each year. Our company performs well, employees get treated well from a financial standpoint. Our company doesn’t perform well, employees don’t get treated as well. . . . So our shareholders see, as we as directors and managers see, how to run the company successfully by creating an incentive system based on performance. So that has been overwhelmingly approved.
Later in the meeting, Unum’s Chief Financial Officer, Richard P. McKenney, spoke about the performance of Unum’s “closed block of business,” which includes its individual disability policies issued prior to the mid-1990s–the type of policies that Unum no longer sells.
We do have our Closed Block business. These are policies which are written some time ago. We serve those customers equally as well. But the returns in these businesses are lower.
Taken together, the two statements paint a picture of claims personnel handling the closed block of business under pressure to improve the returns, or else they “won’t get treated as well” or receive as sweet an incentive bonus.
We often hear from claimants who are incredulous that their claims have been denied or terminated despite a mountain of evidence of their disability. This may be one explanation, and having an attorney to advocate for you as a claimant can be essential when you have a financially-motivated adjuster reviewing your claim.
The full transcript of the Unum Annual Shareholder Meeting is available at Seeking Alpha.
Pima County Medical Society Publishes Ed Comitz and Karla Thompson’s Article Re Surveillance in Disability Insurance Claims
The January 2013 edition of Sombrero, the publication of the Pima County Medical Society, features an article by disability insurance attorneys Edward O. Comitz and Karla Baker Thompson. The article, “Surveillance Misuse in Claims Investigations,” reviews some of the ways in which evolving technology has led to overly intrusive surveillance of claimants by insurance companies.
Among the surveillance techniques being utilized are stakeout operations, tailing (sometimes using a “decoy” investigator), pretexting (obtaining your personal information under false pretenses), and GPS and cell phone tracking. For example, some private investigators use a stingray, which is a cell phone tracking device that operates as a miniature cellular tower from inside of the PI’s vehicle. The device enables an investigator to connect to a claimant’s cell phone, even when it’s not in use, and, after taking measurements of the phone’s signal strength, triangulate its location. Since most people tend to carry their cell phones at all times, the device then allows the investigator to track the insured’s movements remotely.
The law surrounding some of these intrusive surveillance techniques, which have been made possible by modern technology, is not yet settled, and it is important that anyone on claim with their disability insurance carrier remain vigilant to the possibility of surveillance at all times, regardless of whether a human being is conducting the surveillance. Long gone are the days when surveillance was only conducted by someone with a camera sitting in a car outside an insured’s home.
Berkshire Criticized by Maryland Insurance Commissioner for “Artful Neglect”
Disability insurers have a duty to fully investigate claims for benefits, as the insurance companies are well aware. Unfortunately, some claims departments may focus their efforts on looking like they are investigating and considering information rather than actually doing so.
Berkshire, a disability insurance company that sells own-occupation policies to dentists and doctors, has garnered criticism from at least one state’s insurance commissioner for this very practice.
In Berkshire Life Insurance Company v. Maryland Insurance Administration, 142 Md. App. 628, 791 A.2d 942 (App. 2002), Berkshire attempted to claim that its insured was only partially disabled, and therefore it was only obligated to pay a fraction of the total benefits that were payable under the policy. In finding that Berkshire’s conduct was “arbitrary and capricious” in violation of Maryland’s insurance statutes and ordering it to pay restitution to the policyholder, the Maryland Insurance Commissioner also found:
Overall, Berkshire’s actions here represent what may be termed as “artful neglect.” Berkshire gives the appearance of investigating a claim in order to render a good faith claims determination. As part of this appearance, Berkshire timely requests financial information from its insured and then timely requests more information from its insured. In direct contrast to this “appearance,” however, Berkshire does not analyze the information at all, much less use an analysis in a cogent and rational way to support a proper claims determination.
In a more recent Arizona case, Nunley v. Berkshire Life Insurance Company of America, 2009 WL 529901 (D. Ariz. 2009), Berkshire tried to have the United States District Court rule that it could not be subject to punitive damages in a case involving a disabled dentist’s total disability claim. The Court, however, denied Berkshire’s motion, finding that Berkshire might have to pay punitive damages because it did not investigate the dentist’s claim adequately or in a timely fashion.
This “artful neglect” is unlawful, and may subject a disability insurance carrier to bad faith liability. A disability insurance claimant who thinks her insurer is not adequately investigating the claim should contact an attorney to help protect her rights.
Insurance Bad Faith: Private Investigators and Their Surveillance Practices
Insurance companies often will hire a private investigator to aid in terminating disability insurance claims. Ostensibly, the purpose of a private investigator is to expose dishonest individuals of fraudulent disability insurance claims. A private investigator may even advertise as a “Disability Insurance Fraud Specialist.” All too often, however, insurance companies and their investigators are not seeking to expose fraud, but to manufacture it. They produce “evidence” only to aid in denying disability insurance claims—even wholly legitimate ones. They do so because there is a strong financial incentive to deny disability insurance claims.
Our firm has dealt with these insurance companies and their private investigators time and again. We know how they operate and how to prepare our clients. We have developed a short list of basic information about private investigators so you can know what to expect:
- When are they watching? In a previous post, we noted the five most popular times for disability surveillance: (1) holidays, (2) birthdays, (3) weekends, (4) activities claimant listed in insurance company’s activity log; and (5) near the end of fiscal quarters.
- Who are they? Typically, private investigators are just as the name indicates – private people from private companies. Disability insurance companies contract with these private companies to conduct surveillance on disability claimants.
- What are their surveillance methods? Particular tactics will vary depending upon the private investigator, the disability insurance company and the disability claimant. However, many methods are common across the board. Basically, the private investigator will inconspicuously follow a disabled claimant with a video-capturing device as the disabled claimant undergoes day-to-day activities. If the private investigator has difficulty locating the disabled claimant, the investigator may use different tactics, such as pretexting, stake-outs or tracking devices, to locate and track the claimant. Our last blog post describes these other tactics in detail.
Private Investigator Surveillance Methods and Terms
Private investigators use a variety of tactics to produce evidence that may be used to deny your disability insurance claim. Below is a list of different private investigator surveillance methods and terms.
Disability Surveillance – refers to the monitoring, recording and documenting of activities or behavior of another. In the disability context, this surveillance is called sub rosa surveillance. Sub rosa, a Latin phrase which translated means “under the rose,” denotes the secretive and clandestine nature of private investigator actions.
Disability Stake outs – according to Shannon Detective Service, Inc.—a private investigation company whose client list includes Arizona Counties Insurance Pool, CNA Commercial Insurance, Danielson Insurance, Farmers Insurance, Federated Mutual Insurance Company, Hartford Insurance, Insurance Company of the West, Liberty Mutual Insurance, Nationwide Insurance, Progressive Insurance, Seabright Insurance Company, Sedgwick Claims Service, Travelers Insurance and Westfield Insurance—this is a stationary surveillance method by which a private investigator documents and records a claimant’s activities. The hallmark feature of a stake out is that the private investigator does not move or follow the disabled claimant. In a typical stake out operation the private investigator may station in front of your home or office and record you as you come and go. The goal of the stake out is to produce evidence that will enable the insurance company to deny your disability insurance claim. An ABC News story shows how an insurance company successfully denied a doctor’s disability claim with evidence produced during a stake out.
Disability Pretexting – the Federal Trade Commission (FTC) defines pretexting as “the practice of getting your personal information under false pretenses.” Private investigators are engaging in illegal conduct when they use pretexting to obtain your personal information from a financial institution. See 15 U.S.C. § 6801, et seq.
Here’s an example of how this works: someone pretends to be you and calls your bank. The person claims to have forgotten your checkbook, account number, social security number or other sensitive information. He then tries to get this information from the bank. Such conduct constitutes pretexting and violates federal law. Id.
Although private investigators claim to use only “appropriate” pretexting methods, methods which are not illegal per se, these are the same techniques which are used to facilitate identity theft and consumer fraud. Check out the FTC website for more information about pretexting and how you can protect yourself.
Disability Tracking Devices and GPS – this area of the law is still evolving. In a recent Supreme Court case, United States v. Jones, the Court held that attaching a GPS device to a vehicle constitutes a “search” under the Fourth Amendment; therefore, law enforcement officials need a warrant before installing the device. 132 S. Ct. 945, 949 (2012). Although the Court did not address the attachment of GPS devices in the private investigation context, its decision largely turned on the physical trespass involved in attaching a GPS device to another person’s vehicle. Id. The Court stated:
It is important to be clear about what occurred in this case: The Government physically occupied private property for the purpose of obtaining information. We have no doubt that such a physical intrusion would have been considered a “search” within the meaning of the Fourth Amendment when it was adopted.
Id. Therefore, this ruling may be used to argue against private investigator installations of GPS devices since such installation would also constitute a physical trespass. Private investigation companies, such as Shannon Detective Services, Inc. (SDS), are now looking how to bypass the physical trespass issue altogether through implementation of other technologies that do not require physical attachment. Here are two examples of other technologies cited from the SDS website:
- Disability stingrays (a device that can triangulate a cell phone signal to locate a user) will become popular in the future as a way to skirt around the new GPS laws for law enforcement.
- Disability ping of cell phones (by accessing a user’s cell phone GPS chip) will also fill the gap created by GPS legislation since the FCC has mandated GPS chips to be installed in all new cell phones by 2018.
May 2012 is Disability Insurance Awareness Month
It is once again Disability Insurance Awareness Month, and while the insurance companies may like to celebrate by encouraging people to purchase disability insurance, we’d like to take this opportunity to repeat some information from one of our previous blog posts regarding what your disability insurer can and can’t legally do in Arizona if you file a claim.
What your disability insurance company can do
- Audit your billing records and tax returns
- Review your medical files
- Use a private investigator to conduct photographic and video surveillance
- Look at your public Facebook profile and photos
- Follow your tweets on Twitter
- Order an Independent Medical Exam
- Have their doctor opine about your disability
- Ask for a Functional Capacity Evaluation
- Contact your treating physician
- Schedule in-person interviews with you
- Interview your friends, family, co-workers and employees
- Demand precise quantifications of how you spent your time in every professional activity pre- and post-disability
- Pay your claim under a reservation of rights
What the disability insurance company cannot do
- Impose requirements on you that are not contained in your insurance policy
- Attempt to influence the opinions of independent medical examiners
- Misrepresent policy provisions
- Conduct abusive interviews
- Unfairly delay a decision on your claim
- Fail to conduct a timely, adequate investigation of your disability claim
- Destroy key documents
- Lie about actions taken on a claim
- Place their financial interests ahead of your contractual rights
- Force you to litigate by offering an unreasonably low lump-sum buyout
When it comes to claims investigation, disability insurance companies sometimes skirt the limits of what they can legally do. If you believe your insurance carrier might be acting in bad faith, contact an attorney to protect your disability benefits.
The Insurer Who Spied on Me – ABC News Investigation
Good Morning America recently reported on The Hartford going too far in their surveillance of some people with disability insurance claims, then unfairly cutting off benefits based on the video surveillance.
Read the full article here: The Insurer Who Spied On Me
Disability Insurance Policies: Which type do you own?
The type of disability insurance policy you have can affect the disability benefits you receive and the legal rights to which you are entitled. Below is an overview of the basic types of disability insurance policies.
Individual Disability Insurance:
As the name suggests, individual disability insurance policies are purchased by individuals directly from the carrier and provide long-term disability benefits in the event of sickness or injury. Individual polices fall into two categories: “general” and “occupational.” A “general” disability policy insures against sickness or injury that precludes the insured from performing all work while an “occupational” policy provides relief if the insured cannot perform the material and substantial duties of his or her own occupation. Thus, an “occupational” policy will provide greater coverage to the insured, who will be entitled to benefits even if he or she is able to engage in another occupation. Individual policies usually provide coverage in set amounts, e.g., $5,000 per month, rather than as a percentage of the insured’s salary.
Group Disability Insurance:
Group disability insurance polices are made available to participants of organizations, such as members of the American Medical Association. Unlike most individual policies, group policies typically confer benefits calculated as a percentage of the insured’s base salary, usually from 50-75%. These policies may limit the maximum amount of disability benefits payable, e.g., no more than $5,000 per month, regardless of base salary. Further, group policies often reduce disability benefits when the insured receives income from other sources such as Social Security disability benefits or worker’s compensation.
Employer-Sponsored Disability Insurance:
Employer-sponsored disability insurance policies are typically the least expensive policies and are similar to the “group” policies described above, providing employees with disability insurance based on a percentage of their base salary as part of the employer’s overall benefits package. Unlike group policies, however, employer-sponsored policies are governed by the Employee Retirement Income Security Act of 1974 (ERISA), which has significantly affected the administration and litigation of disability insurance claims. Unfortunately, ERISA deprives insureds of significant rights to which they would normally be entitled under state law. These include the right to a trial by jury and the possibility of punitive damages where the carrier has acted unreasonably or maliciously.
Has My Disability Insurer Acted in Bad Faith Under Arizona Law?
Under Arizona insurance law, the relationship between a disability insurance company and its policyholder/insured is a special relationship giving rise to heightened duties not ordinarily found in other contractual agreements. Rawlings v. Apodaca, 151 Ariz. 149, 163, 726 P.2d 565, 579 (1986); Dodge v. Fidelity & Deposit Co., 161 Ariz. 344, 346-47, 778 P.2d 1240, 1242-43 (1989). Arizona courts further recognize that a disability insurance company’s duties to its insured are non-delegable and that an insurer remains liable for actions taken by a delegate (like reinsurers and third-party claim administrators) who take over disability claims and act in bad faith:
[A]n insurer who owes the legally imposed duty of good faith to its insureds cannot escape liability for a breach of that duty by delegating it to another, regardless of how the relationship of that third party is characterized. Clearly, an insurer may seek assistance by delegating performance of its duty of good faith to non-servants through whatever organizational arrangement it desires. In doing so, however, the insurer cannot give this delegate authority to deprive its insureds of the benefit of the insured’s bargain. If the insurer were allowed to delegate the duty itself, an injured insured would have no recourse for breach of the duty against either the insurer, from whom the duty is owed, or its delegate, with whom the insured has no contractual relationship. Such a result would render a cause of action for breach of the duty virtually meaningless. Thus, we hold that, although an insurer may delegate the performance of its duty of good faith to a non-servant, it remains liable for the actions taken by this delegate because the duty of good faith itself is non-delegable.
Walter v. Simmons, 169 Ariz. 229, 238, 818 P.2d 214, 223 (Ct. App. 1991) (citations omitted) (emphasis added); see also State Farm Mut. Auto. Ins. Co. v. Mendoza, 2006 WL 44376, at *12 (D. Ariz. Jan. 5, 2006) (“Insurers cannot escape their duty of good faith and fair dealing by delegating tasks to third-parties . . . .”) (citing Walter).
To establish a claim for bad faith, the a dentist or physician must show: (1) that the insurer acted unreasonably in the investigation, evaluation or processing of his/her claim; and (2) that the insurer acted knowingly or with reckless disregard as to the reasonableness of its actions. Leavey v. Unum/Provident Corp., No. CV-02-2281-PHX-SMM, 2006 WL 1515999, at *3 (D. Ariz. May 26, 2006); Zilisch v. State Farm Mut. Auto. Ins. Co., 196 Ariz. 234, 238, 995 P.2d 276, 280 (2000); Acosta v. Phoenix Indem. Ins. Co., 214 Ariz. 380, 153 P.3d 401, ¶ 13 (Ct. App. 2007). Intent can be inferred from the defendant’s conduct. Services Holding Co. v. Transamerica Occidental Life Ins. Co., 180 Ariz. 198, 207, 883 P.2d 435, 444 (Ct. App. 1994) (noting that “the intent requirement of the second element [of a bad faith claim] can be established by conduct”). Moreover, an insurer can be held liable in insurance bad faith for the distinct acts of misconduct discussed on our Homepage, regardless of whether the insured’s claim is even paid. As the Zilisch court held:
The carrier has an obligation to immediately conduct an adequate investigation, act reasonably in evaluating the claim, and act promptly in paying a legitimate claim. It should do nothing that jeopardizes the insured’s security under the policy. It should not force an insured to go through needless adversarial hoops to achieve its rights under the policy. It cannot lowball claims or delay claims hoping that the insured will settle for less. Equal consideration of the insured requires more than that.
196 Ariz. at 238, 995 P.2d at 280; see also Leavey, 2006 WL 1515999, at *5 (noting that “reasonable jurors could conclude that defendants acted unreasonably in their evaluation and processing of Plaintiff’s claim,” despite the fact that the insurer never missed a payment).
Disability insurance companies’ duties include the following:
To not impose requirements on the insured that are not contained in the policy.
To treat the insured fairly and honestly at all times.
To not try to gain an unfair advantage over the insured. To give as much consideration to the insured’s interests as its does to its own.
To make claims decisions without regard to profitability. To not attempt to influence the opinions of independent medical examiners.
To not destroy or alter documents to conceal evidence of claim handling.
To not lie about actions taken on a claim.
To act reasonably in handling the claim.
To not misrepresent facts or policy provisions to avoid paying benefits.
To reasonably interpret contract provisions.
To not take unreasonable legal positions.
Each of the foregoing duties remain the liability of the primary insurer and are non-delegable as noted above.
If you think that your Arizona disability claim has been denied in bad faith, a disability insurance attorney can help you determine what legal claims you might have against your insurer.
Ed Comitz – My Own Story
Living an active lifestyle has always been important to me. It was not until I suffered a severe neck and head injury that I wondered if I would ever be able to enjoy sports or be active again.
Within months of my injury, I began experiencing constant, agonizing pain in my neck and shoulder, lost manual dexterity and fine manipulation skills with my left hand, and had difficulty moving, all of which caused a precipitous decline in the quality of my life. I felt physically distressed – as if I were constantly being injured.
MRI’s revealed two large disc protrusions. From there, I embarked on a year-and-a-half journey of treatment options without success: sports medicine, physical therapy and rehabilitation programs, consults at the Mayo Clinic and throughout the country, surgical consults, multiple epidural injections (interlaminar and transforminal), facet injections, trigger point injections, massage, chiropractic, traction, Ibuprofen and muscles relaxers. Despite my unrelenting commitment to get better, my condition unfortunately progressed to the point where the entire left side of my body was enormously tense, including my hip, leg and foot. I started losing proprioception in my foot and ambulated with an irregular gait, and my functionality was becoming worse by the day.
This was enormously shocking. I then consulted with another neurosurgeon and had more MRIs, which now revealed possible spinal cord involvement. I was admitted to Barrow Neurological Institute, where I underwent a multi-level discectomy and fusion. I have spent over a year rehabilitating and the process has been self-revealing, always too slow, but with significant progress over time. I now enjoy skiing, playing tennis, hiking, biking, swimming and jogging in moderation. While I have improved exponentially since the surgery, I still have limitations and struggles, and know that my condition can be aggravated if I do not take very good care of myself.
Most of my clients are physicians and dentists, and many have conditions similar to mine. As an attorney, I can keep working – if I drop a pen or get a cramp in my side, I can take a break or stretch, then resume working. If I were a medical professional, though, I would not be able to sustain positioning for long periods of time, each and every day, and would be concerned about patient safety.
I am strongly committed to my clients and practice, am sympathetic to physical limitations and restrictions that others may not fully understand, and use my experience to provide my clients with the results they deserve. My firm provides representation to professionals nationwide and throughout metropolitan Phoenix, Scottsdale, Tucson, Flagstaff and Yuma.
Too Sick to Work? They Disagree
In the February 10, 2010 edition of SmartMoney Magazine, Brad Reagan writes:
Once employees go on disability, critics say, insurers today are more likely to require hour-long chats on the phone, hound patients for medical updates and push them back to work as soon as possible—often clashing with doctors who think the workers need more recovery time. “These claims are now managed, whereas they used to just be monitored. It can be very intrusive,” says Terry Smith, a principal in Mercer’s health and benefits practice.
To be sure, the disability battle is complex . . . . In 2004 and 2005, insurer Unum Group agreed to pay $24 million in fines to various state regulators over its handling of disability claims. In addition, the company agreed to review previously denied claims between 1997 and 2004—and ultimately reversed 42% of them in the patient’s favor.
. . . In 2004 and 2005, insurer Unum Group agreed to pay $24 million in fines to various state regulators over its handling of disability claims. In addition, the company agreed to review previously denied claims between 1997 and 2004—and ultimately reversed 42% of them in the patient’s favor.
Solid Record With All Major Disability Insurance Carriers
Our Firm and its attorneys have resolved cases with all of the leading disability insurance companies and third-party administrators in the country, including, among many others: Berkshire, Boston Mutual, CIGNA, Disability Management Services (“DMS”), Disability Reinsurance Management Services (“DRMS”), Equitable, First Unum, Great-West Life and Annuity Insurance Company, Guardian, The Hartford, Integrated Disability Resources, Jefferson Pilot, Liberty Mutual, Lincoln Financial, Mass Mutual, Met Life, Monarch, New York Life, Northwestern Mutual Life, Paul Revere, Penn Mutual, Provident, Prudential, Reassure America Life Insurance Company, Reliance, Royal Maccabees, Standard, Swiss Re, and Unum (formerly UnumProvident). We have also litigated and resolved cases against third-party vendors of insurance companies, including Behavioral Medical Interventions (BMI) and PsyBar.
Planning for Possible Health Problems: How Much Disability Insurance Should You Have?
As Chris Clark writes in a DoctorPlanning.com article “Planning for Possible Health Problems: How Much Disability and Long-Term Care Insurance Should You Have?”, health problems are one of the most common reasons people retire before they intended. But knowing how much and which disability and long-term care coverages to purchase can be complicated. Disability attorney Ed Comitz provides some advice in Mr. Clark’s article:
Edward Comitz, an attorney who leads the health and disability insurance practice for a Phoenix law firm, recommends buying individual policies instead of the typically cheaper group ones, because employer-sponsored plans are subject to employment-law restrictions that include limits on jury awards if a claimant ends up in court fighting for benefits.
And don’t pay the premiums from the practice, he says, because an individual policy could be characterized as a group one if the practice is paying the bills.
A Disability Insurance Q-and-A
Phoenix and Tucson-area disability attorney Ed Comitz recently responded to some common disability insurance questions for the Pima County Medical Society’s January 2010 issue of Sombrero. He answers questions doctors and other healthcare professionals often ask, such as, “What is the difference between ‘own occupation’ and ‘any occupation’ in disability insurance?” and “Why do so many doctors’ claims get denied, and how can a law firm help?”
Ed Comitz Interviewed For
PHYSICIANS PRACTICE Magazine
Columnist for the Chicago Tribune and freelance writer Janet Kidd Stewart interviewed Ed Comitz regarding his advice for physicians when purchasing disability insurance policies. The interview focused on physician disability claims, issues with coverage, the types of physician policies available, and examples of situations where physicians have been denied coverage. Purchasing the right policy is the first step in risk avoidance. Ms. Kidd Stewart’s article, “Planning for Possible Health Problems – How Much Disability and Long-Term Care Insurance Should You Have?” appeared in the January 2010 issue of Physicians Practice magazine.
Disability Benefits Terminated Due to Facebook Photos
The Canadian Broadcasting Corporation has reported that Nathalie Blanchard, who had been on long-term disability leave from her job at IBM due to depression, had her benefit payments terminated after she posted photographs of herself on Facebook that depicted her vacationing, having fun at Chippendale’s and enjoying her birthday party. Her insurer, Manulife, confirms that it uses Facebook as a tool for investigating its insureds. Ms. Blanchard contends that her doctor advised her to engage in fun activities to combat depression. The story is a reminder to insureds to be aware of insurance company surveillance. The CBC’s full article can be read here: http://www.cbc.ca/news/canada/montreal/depressed-woman-loses-benefits-over-facebook-photos-1.861843
