Quiat on Claims : New York Disability Insurance Lawyer & Attorney : Michael Quiat : Uscher Quiat Uscher & Russo Law Firm : ERISA, Denied Claims

Because of a relatively few bad apples, the vast majority of lawyers have a mostly undeserved rep with the public.

Lawyer jokes abound and lawyers’ friends are only too happy to share the latest one with their pals who are members of the bar. Such conduct on the part of our friends doesn’t bother us one whit. We know that with all of this laughing and “hoo-hawing”, the first person these seemingly disdainful friends call when there is a serious problem of any kind is the butt of their lawyer jokes – us.

It makes it kind of easy for us to bear the jokes when we know that when the chips are down, the “laugher” is going to run “crying” to us for help and advice.

The reason we are on this subject at this “up” time of the year is an email we just received from a client, which makes all of the hard work, stress and lawyer jokes worthwhile.

Down through the years, we have come to understand that most clients consider the rule of thumb for lawyers is:

If the lawyer gets a good result, the client considers it is because the client had a peachy case; if there is a poor result it is because the lawyer handled the matter badly.

With this mantra stacked against us, it is really tough to get even a left-handed compliment from a client, no matter what the result.

That’s why we were so pleasantly surprised and delighted when one of our clients, whose matter was resolved in early 2010, thought it appropriate to write us to say “Thank You” in a heartfelt and sincere way. In our experience, it is unusual for a client to see and understand the value of what lawyers do beyond the fees we get paid. It is even more extraordinary when the client feels the need to communicate that feeling to us, especially long after the matter is concluded.

The email was just a few words, but it goes up in our Hall of Fame:

“December 28, 2010

“Dear Mr. Quiat:

“It is the end of the year a time for reflection and giving thanks. I wanted to let you how thankful I am for the services you provided us. I have kept your voice mail on my cell phone, it cheers me up everytime I listen to it. Thanks once again. “Best wishes for a happy, healthy, and prosperous new year. Good luck digging out from the snow!
                                                                    “a very grateful and appreciative client,…”

This matter involved a medical doctor who had an unusual medical problem on top of a particular clause in his policy which would, at first blush, seem to preclude any disability income benefits for him. The solution, which led to full benefits for him, took a close reading of the policy, intense medical research and a clear, well-reasoned appeal to the insurance company.

The fact that the work on his case followed the normal pattern of what we do in matters of this kind did not hide the value to him of what we do. And this doctor felt that what we do requires a THANK YOU even long after the matter was concluded.

Such thoughtfulness touched us deeply and brightens our recollection of the work we did in 2010. For that I thank the doctor from the bottom of my heart. It’s good to know that someone out there really understands what we do.

                                                  A Happy and Healthy New Year To All!!!

• Email This
• Print
• Comments
• Trackbacks
• Share Link

One wonders when in a happy mood writing a blog around a major holiday whether others, not so fortunate, have the same feelings of joy and expectation. Should one write for those who are up or those who are down?

While facing this dilemma this holiday season, we decided to compromise – try to say something that will apply to both sides of the holiday equation – the happy ones, the sad ones and the ones in between.

In fighting with insurance companies for the benefits policies purportedly promise their beneficiaries, we have discovered the secret of being – NEVER GIVE UP! And, this goes for living in general.

Down through the years, we have noticed that we can be on the balls of our bottoms one day and on top of the world the next. Life has a habit of changing one’s status without warning of any kind.
We deal with people who are frequently on the lowest rung of life’s ladder because they are seriously disabled and cannot work and earn a living for themselves and their family.
What could be worse than being ill or disabled (for how long, you are not certain) and not being able to bring in money for food or rent?

On top of that, your salvation is in the hands of a disability insurance company which, in effect, makes its money by not paying people in your circumstances.
We have been in those situations many times with our clients. The present looks bleak and the future looks even bleaker.

And then, without warning, things change. The insurance company, for reasons known only to itself, decides to give your case some priority or launches a new review of your claim and comes up with a positive result for you.

After years of fighting and deep disappointment, your world gets brighter in a split second. How does it happen? No one knows. But, if you aren’t in the game when the change hits, you are out of luck.

The reverse is also true. You may be sitting on top of the world in regards to family, occupation and life in general. Without warning, illness or injury strikes and your world is turned upside down in an instant.
 

The world is constantly changing and your lot changes with it. There are people who are at the top of the world today who will be in the dumps tomorrow. There are people who seem without hope today who will be at the zenith of their lives tomorrow.

Why and how does this happen? We can’t say. Is there a Supreme Force or is it the luck of the draw? No one knows for sure.

But, what we do know for sure is that in disability insurance claims, the same as in life, if you are not in it, you can’t win it.

So, ring the bells, light the candles, sing the songs, but hang in. Your moment in the sun may be the very next one.

Enjoy the holidays and always look forward to better times.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

When a ‘kick-in-the-slats” state like Texas gives the heave-ho to the discretionary clause in disability income insurance policies, it’s time for the rest of the states (and maybe the courts) to take another look at a discretionary clause ban.
 

In early December, in a strong, well-reasoned ruling, the Texas Commissioner of Insurance booted the discretionary clause out of the State of Texas starting in 2011. 

Any one reading this blog should know that the discretionary clause in a disability policy gives an insurance company an inordinate advantage when challenged by an ERISA policyholder over a disability denial.
 

This advantage was not mandated by Congress when it first enacted ERISA in 1974. This downer for the disabled was a “gift” of the Gods of the U.S. Supreme Court in Firestone v. Bruch, 489 U.S. 101 (1989), when the majority engaged in a pedantic discussion of trust versus contract law and decided to give administrators of disability insurance policies a more or less free hand by putting disabled workers through the almost insurmountable task of proving that the denial decision of an administrator was “arbitrary and capricious”.
 

The Firestone court opted for a trust-style review of how to weigh plan administrator denials rather than a contract-style review. Courts were ordered to give deference to the plan administrator denial (usually an insurance company which has to pay the claim, if approved) which automatically erects a steep hill which a disability claimant has to climb. (Apparently the Court overlooked the fact that no person in their right mind would set up a trust in which the trustee and the beneficiary had such obviously conflicting interests).
 

What a holiday present for insurance companies which have had a long history of taking maximum advantage in any situation. And, the insurers certainly have maxed out on the “deference” gift given them by the Supreme Court!
 

Down through the years, Federal District judges, bridling at not being able to judge ERISA cases as they see them because of Firestone, have tried to devise ways within the restrictions of Firestone to still do justice to the many wrongly denied disabled claimants whose cases they hear.

ERISA contains a preemption clause which generally keeps states from interfering with the Federal ERISA legislation. Many states were quick to recognize the advantage Firestone gave insurance companies and the unconscionable burden it placed upon the backs of those already so disabled that they could not work.

Led by the National Association of Insurance Commissioners, some states have already found an exception to the preemption clause – the language used in a policy is not preempted and, therefore states can ban the use of deference clauses in policies issued in their state, without violating ERISA.
 

At this time, some 22 states have tried to level the playing field for their citizens in ERISA disability income claims. Deference to insurers has been a topic of discussion in the ERISA disability insurance field for many years and slowly states have seen the wisdom and justice of giving claimants a chance to prove their case just as a plaintiff does in every other type of litigation – by a preponderance of the evidence with no head start for either side.
 

To have Texas, a state not known for being partial to wimpy notions, jump on the bandwagon so strongly, indicates that the advantage given to insurance companies in these types of cases is so one-sided, that even a state where sissy stuff is sneered at, says, “Enough”.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

It comes as no surprise to those whose law practice entails getting money for clients from life insurance companies, that with insurers, there is no such thing as a “slam dunk” claim.
 

Before we started working as adversaries to insurance companies, we always thought a life insurance policy would be the exception to the usual ”let’s find a way around paying rule”, i.e., the policyholder has died, so let’s pay the policy. Boy, were we mistaken.
 

One would think there is no more definitive condition than death. In that regard you would be right. But, when it comes to an insurance policy, you are overlooking the credo of the insurance industry: Maybe we can find a way around it. And, they are very creative in trying to find ways to avoid paying.
 

A major reason for a turndown when it comes to paying life benefits is what the insurers call a “material misrepresentation” on the policy application. Because of the inadequate vetting system insurers choose to use when underwriting a life insurance application, many policies are issued which are based upon applications in which the policyholder had a spate of selective and “forgetful” memory.
 

Being in a hurry to grab premium dollars, many insurance companies rush their applicant screening (if any) and only take screening seriously when a policyholder dies and it comes time to pay the death benefit. Suddenly, a complete and thorough investigation is in order, including dotting every “i” and crossing every “t”. We call this “post-claim underwriting” and it is rampant in the life insurance industry.
 

Why leave a policyholder feeling secure for years only to deny a death benefit for a purported misrepresentation which the insurer concocted after payment is due? The insurer will tell you it is to maintain the integrity of its risk assessment system so as to be fair about the degree of risk and not to pay illegitimate claims.
 

But, why can’t the companies assess the risk before issuing the policy? They have access to and can review all medical records of the insured and can decline to issue a policy if there is reason to do so. That would leave them in the position of not issuing a policy they would later find they should not have issued and leave the purchaser free to seek protection elsewhere. However, that would mean no premium dollars to the insurer.
 

It used to be that all life insurance policies had a 2-year incontestability period, after which the insurer could not deny a claim based upon misrepresentation in the policy application. But, now nearly all states allow an exception for “fraudulent misrepresentation” in policy incontestability clauses, making the 2-year period completely illusory.
 

With an exception for “fraudulent misrepresentations, there is no time limit to restrict the carrier from contesting payment, even many, many years after the policy was issued. All the insurer has to do is allege “fraudulent misrepresentation” and the death benefit is off to the races on a very muddy track. So much for the peace of mind a life policy is supposed to bring.
 

Life insurance is a highly competitive business in which companies are willing to take risks for premiums. If you turn down an applicant, your competitor may very well say yes, leaving you out in the cold.
 

From the company’s point of view, it is better to zip through the vetting of the application, knowing that you can always try to reject the claim after the person dies. This procedure also is less costly to the insurer which does not have to spend serious money taking care to look at the application, before a policy is issued.
 

Zipping through the app procedure gets the premium dollars rolling in faster. Never mind that the later rejection of the claim may cause the beneficiary a disastrous hardship at the worst possible moment in their life.
 

This procedure, entrenched at most life companies, is a win-win for them.
 

And, that’s just the way insurance companies like it.

• Email This
• Print
• Comments
• Trackbacks
• Share Link