McKennon Law Group, Author at McKennon Law Group

Today, the California Department of Insurance launched a new online tool, the Life Insurance Policy Locator, which is available to help consumers search for possible life insurance policy or annuity proceeds anywhere in the nation.

“Many potential beneficiaries are unaware that they are due life insurance benefits and are unsure where to begin searching for a lost policy,” said Insurance Commissioner Dave Jones. “The Life Insurance Policy Locator was created to simplify this process and ensure consumers receive the benefits they are entitled to.”

Created by The National Association of Insurance Commissioners (NAIC) the service is designed to offer consumers who may suspect they or a family member is the beneficiary of a life insurance policy or annuity, but may now have some of the key information typically needed to search, such as a policy number or name of the insurer.

The national service provides consumers with search capabilities to help find a deceased person’s lost life insurance policies and annuities. An estimated
$1 billion in benefits from life insurance policies are unclaimed, according to Consumer Reports.

Consumer requests are encrypted and secured to maintain confidentiality. Participating insurers will compare submitted requests with available policyholder information and report all matches to state insurance departments through the locator. Companies will then contact beneficiaries or their authorized representatives. This service is free of charge.

For tips on searching records, the department urges consumers to visit the California Department of Insurance website. If a person finds a life insurance policy for a deceased relative but cannot locate the company, they can call their Consumer Hotline at1-800-927-4357.

In 2015, life insurers paid more than $74 billion in insurance policy benefits to consumers nationwide. Since 2010, state insurance regulators have investigated unclaimed life insurance benefits. To date, nearly 23 regulatory actions have resulted in returning more than $6.75 billion life insurance proceeds to U.S. consumers.

McKennon Law Group PC regularly handles life insurance matters and inquiries from consumers requesting assistance with their life insurance claims and unpaid life insurance benefits. If you have a life insurance claim that has been denied, please call us for a free consultation at 1-800-682-4137.

It is very common for an insurance company to deny a claim for long-term disability insurance governed by ERISA after concluding that a claimant can perform the duties of a sedentary occupation. The U.S. Department of Labor’s Dictionary of Occupational Titles (DOT) states that “[s]edentary work involves sitting most of the time, but may involve walking or standing for brief periods of time.” In other words, an occupation is classified fbifas “sedentary” when a majority of the work can be performed while sitting down, and the job does not require much, if any, movement and heavy lifting.

Insurers often assert that disability insurance claimants can work in a sedentary occupation, regardless of the physical restrictions from which the claimants suffer, including the ability to sit for four-to-six hours per day at a sedentary job. However, this practice was recently rejected by the Ninth Circuit Court of Appeals in Armani v. Northwestern Mutual Life Insurance Company, __ F.3d __, No. 14-56866, 2016 WL 6543523, *3-4 (9th Cir. November 4, 2016), which created a bright-line rule that a person who cannot sit for more than four hours a day cannot perform a sedentary occupation.

In Armani, a case governed by ERISA, the Ninth Circuit held that, when all of claimant’s attending physicians agreed he could sit at most four hours of an eight-hour workday, he was unequivocally disabled from performing his own sedentary occupation (and from any other sedentary occupation), because sedentary jobs require mostly sitting and generally at least six hours per day. After citing numerous cases that offered similarly findings, the Armani court stated:

[T]hese cases reflect the logical conclusion that an employee who is unable to sit for more than half of the workday cannot consistently perform an occupation that requires sitting for “most of the time.” We agree with this commonsense conclusion and hold that an employee who cannot sit for more than four hours in an eight-hour workday cannot perform “sedentary” work that requires “sitting most of the time.” Id. at *4 (emphasis added).

Given the finding by the claimant’s treating physicians that he could not sit for more than four hours, the Armani court ruled that the claimant was entitled to long-term disability benefits. This ruling was made despite the fact that the insurer’s medical consultants disagreed with the insured’s attending physicians about the claimant’s sitting limits. The insurer’s paid physicians concluded, based on reviewing his medical records, that the claimant had no sitting restrictions or limitations that would prevent him from performing a full-time sedentary job (when the insurer had contended sedentary work involves sitting most of the time). Id. at *2. The Ninth Circuit placed no weight on the insurer’s paper review opinions and, despite them, stated there was “undisputed evidence that . . . Armani was unable to sit for more than four hours a day” based solely on the attending physicians’ opinions. Id. at *4 (emphasis added).

Overall, this is a very good ruling for disability insurance claimants who are unable to sit for more than four-to-six hours a day. With this ruling, insurers are precluded from asserting that a claimant can work at a sedentary job if he or she cannot sit for more than four hours a day. In fact, the Armani court even suggested that someone who can sit for more than four, but less than six hours a day, would also be precluded from sedentary work as the court cited to several decisions holding that a disability claimant who is unable to sit for more than six hours per day is disabled.

If you are an employee covered under your employer’s group short-term disability, long-term disability, life insurance or health insurance policy and had your claim denied, do not give up. If your insurer denied your claim without examining you, or, even after you were awarded Social Security disability benefits, there is a good chance we can help. You should immediately contact the McKennon Law Group, a law firm specializing in ERISA insurance and employee benefits litigation. Let us decide whether your claim was wrongfully denied and let us see if we can assist you.

In the October 18, 2016 edition of the Los Angeles Daily Journal, Robert McKennon and Scott Calvert of the McKennon Law Group published an article regarding the use of drones by insurance companies in their insurance claims investigations. In the article entitled “Insurers Turn to Drones,” Mr. McKennon and Mr. Calvert explained that insurers are increasingly using drones as part of the insurance claims handling/investigation process, including disability insurance claims, but noted the use of drones is regulated by a series of Federal, State and local laws. In addition, the article noted that courts are increasingly questioning the use of and reliance on surveillance by insurance companies in ERISA and non-ERISA insurance cases.

The article is posted below with the permission of the Los Angeles Daily Journal.

Insurers Turn to Drones

By Robert J. McKennon and Scott E. Calvert

Insurance companies have the right, and indeed the duty, to thoroughly investigate claims. In California, an insurer’s failure to reasonably investigate an insurance claim may result in bad faith liability.See Egan v. Mutual of Omaha Ins. Co., 24 Cal. 3d 809, 819 (1979);Guebara v. Allstate Ins. Co., 237 F.3d 987, 996 (9th Cir. 2001).

In the process of those investigations, insurers often secretly enlist private investigators to gather information on their insureds. With respect to disability insurance claims, for example, insurers typically hire private investigators to follow and videotape their insureds whenever they ventured out of the home, whether to take the trash out, go to a doctor’s office, or travel to the grocery store. Typically, insurers will attempt to use that surveillance to assert that their insureds are capable of working and not entitled to disability benefits, often overstating the level of activity depicted on tape and the conclusions that can be drawn from such surveillance.

However, with technological advances, the methods of surveillance are changing. Recently, insurance companies started moving beyond the proverbial “guy in a van” method of surveillance, and began using unmanned drones to conduct photographic and video surveillance. There are many different kinds of drones, but some can travel on auto-pilot to a preset location, and slowly fly above an insured and his property, undetected, while taking high-resolution photos and video. Others need to be operated by someone who keeps the aerial vehicle within the line of sight.

Drones, also referred to as unmanned aerial systems (UASs) or unmanned aerial vehicles (UAVs), are increasingly being used for commercial purposes. The use of drones is regulated both by the Federal Aviation Administration (FAA), and a variety of state and local laws and regulations. Those regulations have not prevented insurance companies from making drones part of the claim review process. In 2015, multiple insurance companies, including AIG, State Farm Mutual and USAA, were granted permission by the FAA to use drones for commercial purposes. More recently, in July, the FAA promulgated rules permitting the use of drones weighing less than 55 pounds for all commercial applications, including by insurance companies.

Most often, drones are used for claims involving property and casualty insurance, to examine the condition of tall buildings or inspect property in hard-to-reach locations or even disaster areas. However, the neither the FAA nor any other authority strictly limits the use of drones to these specific situations.

Some private investigators believe that drones are preferable to more traditional methods of surveillance, as they can often provide quicker, cheaper and safer surveillance and documentation while also reducing the risk than an investigator will be spotted, and can be used to gain access to otherwise inaccessible locations.

With FAA approval, insurers are working to research and develop best practices, safety and privacy protocols, and procedures as they further develop plans for operational use. Privacy protocols will be especially important as insurers can be sued if they obtain surveillance that impermissibly intrudes on an insured’s privacy. Thus, even with FAA approval to utilize drones, insurance companies are not simply permitted to use drones in every situation in order to attempt to assert that an insured does not qualify for benefits. They will have to be prudent using them.

As drones multiply in number and category, cities and states are setting their own boundaries. For example, while over the last two years Gov. Jerry Brown repeatedly vetoed bills that would have criminalized the use of drones in certain situations, including over wildfires, schools, prisons and jails, he did sign a law modifying California Civil Code Section 1708.8 so that the definition of a “physical invasion of privacy” now includes sending a drone into the airspace above someone’s land in order to make a recording or take a photo. A person who violates the “airspace above the land of another person” is now liable for up to three times the amount of any general and special damages caused by the invasion, as well as a civil fine between $5,000 and $50,000. While this change was developed mainly to prevent paparazzi from flying drones over private property, it would equally apply to insurance company employees and contractors conducting surveillance of insureds.

Florida has gone a step further, as the Freedom from Unwarranted Surveillance Act provides a private right of action which can be pursued when a drone is used to take pictures or video that would not be otherwise available to someone standing on ground level. Cities are also passing similar laws. For example in 2015, Poway, in San Diego County, passed an ordinance banning the use of drones in any open space or rural residential area.

In light of these rules, in any case involving photographs or videos taken by drone, attorneys on either side of litigation involving such evidence are well-advised to ensure that the evidence was gathered within the confines of the law.

While insurers often use the results of surveillance to assert that an insured does not qualify for insurance benefits, courts are increasingly weary of how insurance companies use and interpret video footage. For example, in one influential 9th U.S. Circuit Court of Appeals case involving a long-term disability insurance claim,Montour v. Hartford Life & Accident Insurance Co., 588 F.3d 623 (9th Cir. Cal. 2009), the insurer relied on surveillance footage of the claimant engaged in short periods of activity over four nonconsecutive days and concluded he was capable of sustaining this activity in a full-time occupation. The court criticized the insurer’s decision, explaining the insurer over-relied on footage and this bias pervaded its decision process, eventually ruling that the claimant was entitled to long-term disability benefits.

Similarly, inBeaty v. Prudential Insurance Co., 313 Fed. Appx. 46, 49 (9th Cir. 2009), the 9th Circuit rejected the insurer’s attempt to rely on “unsupportable inferences from a surveillance video and reports which show the plaintiff engaging in a variety of normal day-to-day activities” and criticized the insurer’s failure to explain how activities show “she can perform the duties of her occupation.”

Other courts have likewise ruled that an overstatement of a claimant’s activities in surveillance is improper, and warn that activities observed for a short amount of time do not necessarily translate into full-time work capacity. For example, inThivierge v. Hartford Life, 2006 WL 823751, *11 (N.D. Cal. Mar. 28, 2006), the district court held that activities observed “for a couple of hours on five out of six days she was under surveillance does not mean that Plaintiff is able to work an eight-hour a day job.”

Thus, while insurers increasingly use drones to gather information on their claimants, gathering and using that information to support claims denials may not be as easy as it seems. This is especially true in the case of disability insurance claims. Not only are insurers obligated to obey an increasingly number of federal, state and local rules and regulations limiting the use of drones, but courts are growing increasingly weary of insurers’ attempts to over-rely on surveillance. Thus, while surveillance, especially the use of drones, becomes increasingly popular in insurance investigations, insurers will have to be especially wary of its use in making decisions on their insurance claims.

There are many tactics that insurance companies use to downplay, or even ignore, the severity of an insured’s illness or injury in an attempt to deny a claim for long-term disability insurance benefits. For example, insurance companies will often attempt to limit their determination of whether a person is disabled to the date a claim is filed, regardless of whether a condition is progressive or takes a turn for the worse after the claim is filed. However, under Employee Retirement Income Security Act of 1974 (“ERISA”), once documentation of a worsening condition or worsening symptoms is provided to the insurance company prior to a final denial, it must be considered. Additionally, insurance companies will often ignore the actual requirements of a person’s job, and rely upon a description of a similar occupation contained in the Dictionary of Occupational Titles (“DOT”), a publication produced by the United States Department of Labor which identifies, among other things, the physical requirements of various occupations. Insurance companies will then rely on the often less demanding physical requirements of a comparable occupation contained in the DOT in order to claim that disabled individuals are capable of performing the requirements of their occupation. As demonstrated in a recent decision from the Northern District of California, judges will not allow insurance companies to use their subtle tricks to avoid paying a valid claim for disability benefits.

In Montoya v. Reliance Standard Life Insurance Company, No. 14-cv-02740-WHO (N.D. Cal. Sep. 27, 2016), Mr. Montoya was a mental health therapist who filed a claim for disability benefits from Reliance Standard Life Insurance Company (“Reliance”) due to his carpal tunnel syndrome, pain in both of his hands, neck pain, back pain, acute stress reaction, and depression. After initially concluding that Mr. Montoya was disabled for a limited period of time due to evidence of temporary psychiatric impairment, Reliance denied his claim insisting his medical records failed to support an impairment that would preclude returning to work. Mr. Montoya’s pain and symptoms became progressively worse after he filed his claim for disability benefits with Reliance. After Mr. Montoya appealed Reliance’s denial of his claim, he was examined by a physician hired by Reliance to determine his level of impairment. Reliance requested that the examining physician determine the presence or absence of an impairing condition only as of the date that Mr. Montoya’s temporary psychiatric impairment ended. Based upon Reliance’s request, the examining physician did not consider Mr. Montoya’s subsequent medical records indicating he was unable to return to his job duties due to worsening of his carpal tunnel syndrome, revealing additional diagnoses of wrist derangement and cervical radiculopathy, and showing a significant increase in his pain since the date Reliance determined his temporary psychiatric impairment ended. The examining physician hired by Reliance prepared a report indicating that based upon his examination of Mr. Montoya, he was capable of working in a sedentary capacity as of the date his temporary psychiatric impairment ended.

Reliance also ignored the amount of typing and fingering required by Mr. Montoya’s occupation by citing to the DOT title for “caseworker/Social Services,” last updated in 1991, which only required “occasional” fingering and typing. However, Mr. Montoya’s testimony and the job description provided by his employer indicated his job required computer work at least 40% of the time, significantly more than “occasionally.” Mr. Montoya argued that Reliance should not be able to rely on a DOT title that was last updated in 1991 for a determination of what his occupation entails in terms of fingering and computer work. Instead, Mr. Montoya asserted that Reliance should consider his actual job tasks which required substantial typing/fingering that he is not able to perform.

The District Court found that Reliance erred in relying upon its examining physician’s report. Specifically, the court noted that the examining physician failed to explain why he could testify as to what Mr. Montoya’s limitations were when his temporary psychiatric impairment ended. The court noted that it was improper for Reliance to fail to explain why it was appropriate to limit its review of Mr. Montoya’s physical ailments after the date his psychiatric impairment ended when the record was replete with evidence that his pain worsened significantly after that time. In other words, as long as records indicating Mr. Montoya’s worsening condition were provided to Reliance prior to a final decision regarding his entitlement to disability benefits, they were part of the administrative record and must be considered in the determination of his disability. The District Court further determined that Reliance should have considered Mr. Montoya’s actual job tasks as a mental health therapist which required substantial typing/fingering that he is not able to perform. The court noted that it was unreasonable for Reliance to rely solely on the DOT definitions last updated in 1991 to determine the requirements of Mr. Montoya’s job as of 2012, particularly given the evidence in the record.

The court ruled in favor of Mr. Montoya and determined that Reliance acted unreasonably. It is important to remember that this case was decided under the de novo standard of review, like almost all cases involving claims for disability benefits under ERISA in California. This means that the judge reviews all of the documents in the insurer’s possession at the time it rendered a final decision, and then determines whether the insured is entitled to disability benefits without deferring to the insurer’s decision. Therefore, while a worsening condition or worsening symptoms will be considered in determining a claimant’s entitlement to disability benefits, is important to understand that the administrative record essentially closes when your insurer renders a final decision on your claim.

Ultimately, as the Montoya case illustrates, if your insurer denied your claim while ignoring portions of your medical records or ignoring your actual job requirements, there is a good chance we can help. Please contact McKennon Law Group and let us see if we can assist you.

The Lawyers Worldwide Awards Magazine has announced McKennon Law Group PC as “Insurance Litigation Law Firm of the Year – USA” for 2016. The Magazine recognizes each year a select number of leading professional firms, across the globe, for their individual areas of specialization, within their geographical location.

Were you denied benefits by your group long-term disability insurer without the insurance company’s doctor examining you in-person? Did your insurer deny your claim even though the Social Security Administration concluded you are disabled? If so, the McKennon Law Group may be able to help get your disability benefits by appealing the insurer’s decision or by filing a lawsuit against it in federal court. As experienced ERISA disability insurance lawyers who have handled hundreds of individual and group long-term disability claims, we see all too often insurance companies unjustly deny claims based purely upon a “paper review” of the employee’s medical records by a biased medical consultant and, worse yet, often by just an unqualified nurse employed by the insurer. No rational doctor would determine whether his patient is disabled from working without examining him. But that is precisely how group disability insurers deny claims on a regular basis, hiring a doctor to perform a cursory review of the claimant’s medical records without ever examining him or speaking to him. Unfortunately, it is a widespread, endemic practice in the disability insurance industry.

Fortunately for claimants, courts often criticize this “pure paper review” practice to decide claims. A federal court in Oakland, California recently did in the case of Lin v. Metropolitan Life Insurance Company, 2016 WL 4373859 (N.D. Cal. Aug. 16, 2016). In that case, Senior United States District Judge Saundra Brown Armstrong was persuaded that Metropolitan Life Insurance Company (“MetLife”) improperly terminated Steven Lin’s disability benefits based in large part on the fact that MetLife’s doctors never examined him.

Mr. Lin has a Ph.D. in chemistry and was employed by TriNet as its Director of Polymer Technologies when he had to stop working because his kidney failed. His job required him to generate ideas, focus and concentrate, and provide leadership and direction to subordinate chemists. Fortunately, years earlier he had enrolled in TriNet’s employee welfare benefit plan, including for long-term disability benefits, in case of such a dire event. The plan was funded by a group disability insurance policy issued by MetLife to TriNet for the benefit of its employees including Mr. Lin.

Mr. Lin submitted a claim to MetLife for long-term disability benefits and reported he could not perform his job because of kidney failure, headaches, chest pain, fatigue, loss of memory and sleepiness. At just 48 years old he underwent a kidney transplant obtained from a cadaver. He was positive for Hepatitis B at the time of his surgery.

MetLife initially approved Mr. Lin’s claim. Over the course of the next several years Mr. Lin was regularly examined by his personal physician, Shahrzad Zarghamee, a nephrologist, to mandate his continuing disability. After documenting Mr. Lin’s consistent fatigue and headaches in her progress notes, Dr. Zarghamee concluded that her patient, Mr. Lin, could not work because he was unable to focus or concentrate, experienced extreme exhaustion when he tried to focus on even mundane matters, and consistently suffered from debilitating headaches and chronic fatigue on a daily basis.

Despite the opinion of Dr. Zarghamee, MetLife terminated Mr. Lin’s benefits four years after it started paying them based upon the opinions of three other doctors, two of which were MetLife’s employees and another, nephrologist Michael Gross, M.D., of which MetLife hired as a consultant. MetLife’s doctors reviewed Mr. Lin’s medical records and concluded based purely on that review, without ever examining him, that his kidney function was normal and there was no objective support in his medical records for his subjective complaints of fatigue and pain. MetLife thus concluded Mr. Lin was not disabled from working based on what its doctors said.

MetLife acknowledged in its termination letter that the Social Security Administration awarded Mr. Lin Social Security disability benefits. But MetLife summarily dismissed the award by stating that a Social Security finding of disability does not guarantee the continuation of long-term disability benefits. Without analyzing why, MetLife stated that its decision may differ from the Social Security Administration because it “may not have the same information that was utilized in making our decision.”

Mr. Lin sued MetLife for recovery of disability benefits under ERISA. The Court conducted a bench trial to determine whether MetLife properly terminated Mr. Lin’s benefits. The Court found MetLife made the wrong decision, that Mr. Lin was in fact disabled. It reinstated his disability benefits and ordered MetLife to pay them plus interest and attorneys’ fees.

In the key part of its analysis, the Court criticized MetLife’s use of “paper reviews” instead of retaining a doctor to actually examine Mr. Lin:

[O]ther aspects of the administrative record also persuade the Court that MetLife erroneously terminated Plaintiff’s benefits. In particular, the Court finds it significant that MetLife terminated Plaintiff’s benefits without actually examining him.

The Ninth Circuit has recognized that an insurer’s decision to conduct “a ‘pure paper’ review. . ., that is, to hire doctors to review [the claimaint]’s files rather than to conduct an in-person medical evaluation of him” may raise “questions about the thoroughness and accuracy of the benefits determination.” Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623, 634 (9th Cir. 2009) . . . .

Here, MetLife’s termination decision was predicated principally on the reports of its outside consultant, Dr. Gross, and its Medical Director. Both of these individuals evaluated Plaintiff’s claim for benefits without physically examining him. . . . While MetLife was not necessarily required to conduct a personal examination of Plaintiff as a prerequisite to terminating his benefits, the fact that MetLife failed to do so—in contravention to the recommendation of its own consultant—further underscores the result-driven nature of MetLife’s decision to terminate Plaintiff’s benefits.

The Court found the opinions of Mr. Lin’s treating physicians more than sufficient to establish he was disabled despite the contrary opinions from the insurance company’s “paper reviewers.” The Court also rejected MetLife’s contention that “objective” medical findings showing disability is required, not just a treating physician documenting Mr. Lin’s subjective complaints of chronic fatigue and pain in her progress notes.

Finally, the Court held that, in order to terminate Mr. Lin’s insurance policy benefits, MetLife was required to meaningfully address why its decision differed from that of the Social Security Administration who, in fact, had found Mr. Lin disabled under its rules. It held that analysis must entail comparing and contrasting the definition of disability in MetLife’s policy to that used by the Social Security Administration and also the medical evidence considered by each, not simply dismissing the Social Security award with an entirely generic, conclusory analysis like MetLife did. Because of that conduct, coupled with MetLife’s decision to rely on “paper reviews,” the Court was persuaded that MetLife improperly terminated Mr. Lin’s benefits and that he was disabled within the meaning of its policy.

The Court also explained that MetLife was not allowed to discount the Social Security Administration’s disability finding in court based upon a rationale MetLife first raised during the litigation. In other words, by failing to use the rationale during the claim administrative process, MetLife waived any right to employ it in court: “MetLife cannot attempt to downplay the significance of the SSA award on a ground that was not specified in its termination letter.”

The California Department of Insurance Unveils New Online Tool to Search for Life Insurance Benefits

Insurers Turn to Drones

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