Nearly all 50 state insurance commissioners, including Andrew Boron, the Illinois Insurance Director, have now signed on to the Regulatory Settlement Agreementthat requires CIGNA disability insurance companies such as the Life Insurance Company of North America to reconsider denied claims under revised guidelines for:
Federal judge William Conley issued a ruling on August 19, 2013 in the case of Freeland v. Unum, No. 11cv53 (opinion_and_order.pdf) finding that Unum acted arbitrarily and capriciously in terminating long-term disability payments owed to Bruce Freeland. The court determined that Unum improperly disregarded the combination of Freeland's cardiac and psychiatric impairments, the impact of his work environment on the plaintiff's overall medical condition, and the risk that his condition would worsen if he were to return to that work environment. The court also awarded plaintiff his attorney's fees.
Click Here Despite the applicability of the arbitrary and capricious standard of review, the court granted in substantial part the plaintiff's motion to compel discovery. Although the court acknowledged that in the Seventh Circuit, the scope of a court's review of an ERISA benefit denial under a deferential standard of review is limited to the "administrative" record, "[i]n 'exceptional cases,' however, limited discovery beyond the claim file may be permitted when 'a prima facie showing of impropriety has been made. . . .'" Semien v. Life Ins. Co. of America, 436 F.3d 805, 814-15 (7th Cir. 2006). Recently, the Seventh Circuit announced a "softening" of the threshold showing that must be made before discovery is allowed. Dennison v. MONY Life Retirement Income Security Plan for Retirees, 710 F.3d 741, 747 (7th Cir. 2013). However, Dennison failed to delineate what that softening entails. Under Semien, a plaintiff seeking discovery "must identify a specific conflict of interest or instance of misconduct." Id. at 815. Moreover, the plaintiff "must make a prima facie showing that there is good cause to believe limited discovery will reveal a procedural defect in the Plan administrator's determination." Id. Although Dennison indicates that standard is no longer appropriate, the court of appeals refused to abrogate Semien; and the law remains that discovery is still not permitted in the "run-of-the-mill" case. Nevertheless, the court found the showing required is "not onerous," and further determined that the plaintiff made that showing in this case.