Here are examples of two recent cases in which SunLife Insurance Company and Aetna Life Insurance Company had a structural conflict of interest and denied disability insurance benefits. In most long term disability insurance claims which are governed by ERISA there is an inherent structural conflict of interest. The conflict of interest exist because the disability insurance company not only pays the benefits, but has the ultimate authority to approve or deny benefits. How can a disability company act a fiduciary to the insured when at the same time a decision to pay benefits will reduce the net income of the company?
The US Supreme Court addressed the conflict of interest issue in the case of MetLife v. Glenn. The court basically said that when there is a structural conflict of interest it is only one factor that must be considered when a disability company denys benefits. The existence of a structural conflict of interest is not a reason to reverse a claim denial. An experienced disability insurance lawyer must be able to prove to that the insurance company acted unreasonably, regardless of the structural conflict of interest.
Sun Life refuses to pay disability insurance benefits to Arkansas woman
Cynthia Evans and her Arkansas disability lawyer recently filed a civil complaint against Sun Life Assurance Company of Canada (Sun Life) in the Circuit Court of Saline County, Arkansas regarding Sun Life’s refusal to pay disability insurance benefits to Ms. Evans as result of her being completely and totally disabled.
Based upon the information provided in the complaint, Ms. Evans and her disability attorney are asking the court for relief in such a manner that will compensate her for back payments she is owed along with attorney’s fees and court fees.
Ms. Evans’ disability lawyer will have to demonstrate to the court the nature of her disability, how it precludes her from working at any occupation, and whether Sun Life acted arbitrarily and capriciously when they denied Ms. Evans’ claim.
Furthermore, Ms. Evans will have to provide the court with all the necessary documentation from her treating physicians and other medical professionals treating Ms. Evans regarding her disability.
Sun Life, however, will try to demonstrate that their decision to deny Ms. Evans her disability insurance claim was fair and reasonable.
Pennsylvania man denied disability insurance benefits by Aetna
A South Carolina disability attorney acting on behalf of Theodore Beers, Jr. of Franklin, Pennsylvania has filed an ERISA lawsuit against Aetna Life Insurance Company in United States District Court for the District of South Carolina in the Greenville Division. The venue for this case is proper since Aetna does business in Greenville South Carolina.
Mr. Beers was employed by ABB Power T&D until 1993. During this time of employment, he was a participant in a group plan with Aetna for long-term disability benefits. When Mr. Beers was no longer able to work as result of becoming disabled, he filed a claim with Aetna so he could receive long-term disability benefits from the plan in which he was a participant.
Aetna subsequently denied Mr. Beers’ claim and Mr. Beers’ appealed Aetna’s denial.
Mr. Beers and his disability attorney allege Aetna denied Mr. Beers’ claim due to a structural conflict of interest and also ignoring evidence that is relevant to Mr. Beers’ claim. In short, Mr. Beers’ claims Aetna abused its discretion by denying Mr. Beers his long-term disability insurance benefits.
Mr. Beers asks the court to find in his favor by having Aetna pay him his long-term disability benefits along with any court costs and attorney’s fees.