Fiduciary Duties

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A lesson in disgorgement

The Employee Retirement Income Security Act law creates a number of perverse incentives for insurers that administer benefit claims. Without the availability of remedies beyond the restoration of benefits due, insurers can earn significant profits on delayed payments. A recent 6th U.S. Circuit Court of Appeals ruling, Rochow v. Life Ins. Co. of North America, […]

Can an employee’s obligation to provide evidence of insurability to secure life insurance be excused by the doctrine of incontestability or by an ERISA claim for breach of fiduciary duty?

A recent life insurance case involving the issue of incontestability caught our attention. Patterson v. Reliance Standard Life Ins.Co., 2013 U.S.Dist.LEXIS 171873 (C.D.Cal. December 4, 2013)(Issue: Incontestability). This case involved life insurance – the plaintiff’s sister was an employee of Redlands Community Hospital who was offered the opportunity to purchase $260,000 in voluntary group life […]

Court recognizes fiduciary breach claim when health insurer gives erroneous information

Killian v. Concert Health Plan, 2013 U.S.App.LEXIS 22657 (7th Cir. November 6, 2013). Most private insurance plans require pre-certification before hospital admissions; and a major cost-savings method used by insurers is to negotiate rates with “preferred” providers. The utilization of a preferred provider network encourages plan participants to utilize the services of the preferred providers […]

Equity provides a way to right a wrong

If a health insurer mistakenly advises a patient that a surgical procedure is covered by its policy – and in reliance on that advice, the patient proceeds with the surgery, can the patient recoup the expenses incurred in undergoing the procedure from the insurance company if the insurer maintains that its prior advice was mistaken? […]