• Reliance Standard Disability Overview of Denials, Appeals, Applications & Lawsuits
  • Reliance Standard Disability Lawsuit and Claim Denial Options with a Disability Lawyer
  • How to File a Reliance Standard Disability Appeal Following a Long Term Disability Benefit Denial
  • Reliance Standard Life Insurance - Disability Benefit Claim Attorneys-Appeals, Lawsuits and Claims
  • Reliance Standard Disability Insurance Claim Denial ERISA Appeal Tips
  • Reliance Standard Denial of Disability Benefits for an Attorney Reversed by Kansas Judge

Reliance Standard Wrongfully Denies Life Insurance Waiver of Premium and Must Pay $188,000

In Jody Rizzo v. First Reliance Standard Life Insurance Company, plaintiff’s late husband, Angelo Rizzo, participated in a group life insurance policy provided as a benefit by his employer, Barnes & Noble, where he was employed as an assistant store manager. The policy was issued by Reliance Standard. On about November 12, 2012, Mr. Rizzo stopped working due to his multiple medical problems. He died approximately 15 months later at the age of 42.

The life insurance policy had a “waiver of premium” (WOP) clause which paid a plan participant’s premiums if that person became totally disabled. Total disability was defined as a “complete inability to engage in any type of work for wage or profit for which he/she is suited by education, training or experience.”

On March 1, 2013, Reliance Standard wrote to Mr. Rizzo informing him of how to apply for WOP benefits, and explained to him that his life insurance coverage policy could only be maintained if his employer paid for seven more months of benefits. Reliance told him since he was no longer working, he could only maintain the policy if his WOP application was approved, or he converted the group policy to an individual policy within 31-days of a denial of his WOP application.

Mr. Rizzo timely applied for WOP benefits, but On October 9, 2013, 203 days after his application, Reliance sent a letter denying his application on the grounds that he was not totally disabled under the terms of the policy. Reliance alleged that between November 8, 2012, and November 1, 2013, Mr. Rizzo could perform a sedentary occupation, and identified four such occupations which it believed Mr. Rizzo could perform.

The October 9, 2013 letter also informed Mr. Rizzo that he had 180 days from the date of the letter to appeal the denial of WOP benefits. Meanwhile, on February 24, 2014, Mr. Rizzo died.

Mrs. Rizzo alleged that she did not receive the WOP denial letter until after Mr. Rizzo’s passing, and she contacted Reliance. Then, she only received it on March 6, 2014 after she requested it.

Mrs. Rizzo ultimately filed this ERISA lawsuit alleging that Reliance wrongfully denied her late husband’s WOP application and she was therefore entitled to the benefits of the policy. Reliance moved to dismiss the lawsuit on the grounds that Mr. Rizzo failed to exhaust his administrative remedies and therefore, the lawsuit was time-barred.

The United States District Court for the District of New Jersey held since Reliance failed to comply with timelines established by ERISA and case precedent, it deemed Mrs. Rizzo to have exhausted her administrative remedies. It further ruled in Mrs. Rizzo’s favor and awarded her the $188,000 life insurance policy that had been offered to Mr. Rizzo.

Exhaustion of Administrative Reasons

The Court noted that although ERISA does not specifically require a plaintiff to exhaust internal review procedures before filing a lawsuit, courts have read an exhaustion of remedies requirement into the statute. On the other hand, there are exceptions. One exception is “where a plan expressly requires exhaustion but fails to establish or follow claims procedures consistent with the applicable ERISA regulatory requirements, permitting a court to deem claimant to have exhausted their administrative remedies.”

In the Rizzo case, according to ERISA rules, Reliance was required to inform Mr. Rizzo that it had denied his WOP application within 90 days of his application. The denial letter it claimed to have sent on October 9, 2013 was sent 230 days after the application was submitted, 113 days after the expiration of the 90-day requirement. Since Reliance failed to comply with the statutory requirement, the Court held that “Plaintiff’s administrative remedies were deemed exhausted upon the expiration of the 90-day adverse determination period, and she was free to bring this lawsuit at any time thereafter.”

Denial of Benefits was Arbitrary and Capricious

The Court weighed several factors in determining that Reliance’s action in denying WOP benefits to Mr. Rizzo was arbitrary and capricious.

The Court balanced all factors and held that Reliance’s “denial of Mr. Rizzo’s WOP application was arbitrary and capricious. The Court gave significant weight to the fact that Defendant failed to consider medical information available for its review before making a benefit determination.”

The Court continued, finding that Reliance “seemingly turned a blind eye to information that was, or could have been made, available to it between Dr. Riss’s April 25, 2013 Attending Physician Statement and its October 9, 2013 denial.” Taking all factors into consideration, the Court determined that Reliance’s “decision to deny Mr. Rizzo’s WOP application was not the product of reasoned decision-making and substantial evidence. Thus, the Court concludes that Plaintiff is entitled to the $188,000.00 in which the life insurance policy at issue in this case offered Mr. Rizzo.”

This case was not handled by our office, but if you have any questions about this, or any question concerning your disability claim or waiver of premium benefits claim, contact one of our attorneys at Dell & Schaefer for a free consultation.

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Our disability insurance lawyers help policy holders seeking short or long term disability insurance benefits from Reliance Standard. We have helped thousands of disability insurance claimants nationwide with monthly disability benefits. With more than 40 years of disability insurance experience we have helped individuals in almost every occupation and we are familiar with the disability income policies offered by Reliance Standard.

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Our lawyers help individuals that have either purchased a Reliance Standard long term disability insurance policy from an insurance company or obtained short or long term disability insurance coverage as a benefit from their employer.

Our experienced lawyers can assist with Reliance Standard:

  • ERISA and Non-ERISA Appeals of Disability Benefit Denials
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In every case we provide each client with a written fee agreement detailing the terms and conditions. We always offer a free initial phone consultation and we appreciate the opportunity to work with you in obtaining payment of your disability insurance benefits.

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