Life Insurance

Life Insurance And ERISA

June 28, 2015 | Mark S. Humphreys

Forest Hill insurance lawyers who handle ERISA claims can tell you horror stories about the rulings and statutes that govern ERISA. The Washington Post published an article not long ago giving reasons and examples about some of the issues with ERISA life insurance claims.

Life insurance companies want employers with life insurance plans governed by ERISA. So eager are the largest insurers to get ERISA contracts that they sometimes cross a line, according to prosecutors in California and New York.

MetLife and Prudential have made improper undisclosed payments to brokers to win business, according to settlements. Each company paid $19 million to settle accusations by the New York Attorney General’s Office in 2006 that they had illegally paid brokers to get new corporate clients. In a similar case, MetLife paid $500,000 and Prudential spent $350,000 to settle with three California counties in 2008. The insurance companies did not admit to any wrongdoing in the cases.

ERISA And Life Insurance

June 27, 2015 | Mark S. Humphreys

Haltom City life insurance attorneys who handle ERISA claims should already know this, but here goes anyway.

Insurance companies can make erroneous arguments with near impunity when it comes to life and accidental death policies provided by companies with ERISA plans. That is because of loopholes in the ERISA laws intended to protect worker benefits.

Under ERISA – the Employee Retirement Income Security Act, insurers can even win when they lose because they can keep and invest claims money while cases are pending.

Life Insurance Lawyers Know This Already

June 25, 2015 | Mark S. Humphreys

Life insurance lawyers in Dallas already know what was published in the Washington Post. It is an article about the death of a loved one being the beginning of a hard fight with the life insurance company.

The article tells us of an experience by a Jane Pierce. Jane spent nine years struggling beside her husband, Todd, as he fought cancer in his sinus cavity. The treatments were working. Then in July 2009, Todd died in a fiery car crash at the age of 46. Todd’s death ended a fight with cancer but began a long fight with Todd’s insurance company, MetLife, for life insurance benefits.

A state medical examiner and a sheriff investigating the case concluded that Todd’s death was an accident. The accident was caused when Todd lost control of his silver GMC pickup after passing a car on a two-lane road. Sounds simple enough, right!?

Life Insurance And Interpleaders

May 21, 2015 | Mark S. Humphreys

Dallas life insurance attorneys will encounter situations where the funds to be recovered from a life insurance policy are “inter-plead” into a court. A Texas Supreme Court opinion issued in 2007, is a must read for lawyers handling interpleader cases. The style of the case is, State Farm Life Insurance Company v. Toni Wasson Martinez.

It has long been the rule in Texas that if an insurer promptly interpleads policy proceeds, it cannot be subjected to statutory penalties for delayed payment even if it missed the statutory deadlines.

After 13 years of marriage, Ed and Linda Martinez divorced in 1994. In their Agreement Incident to Divorce, Ed agreed to pay Linda contractual alimony of $5,000 per month for ten years, with his estate to continue paying if he died earlier. Ed also agreed to name Linda as irrevocable beneficiary on three life insurance policies, providing that he could drop those policies or change beneficiaries so long as the unpaid alimony amount was covered.

Statement In Insurance Application

May 16, 2015 | Mark S. Humphreys

Dallas life insurance lawyers need to read this 1979, Amarillo Court of Appeals opinion. It is styled, Allied Bankers Life Insurance Company v. Mary De La Cerda.

On December 27, 1976, Paul A. De La Cerda secured a $9,000 group credit life insurance certificate from Allied. The certificate contained a statement that the insured had not been, nor was being, treated for certain diseases and that he was in good health.

On February 3, 1977, insured died. The cause of death was diagnosed as acute myocardial infarction superimposed upon a previous anterolateral infarction. The bank filed its claim under the certificate, which was denied by Allied. Thereafter, the bank assigned its interest to Mrs. De La Cerda.

Life Insurance

May 12, 2015 | Mark S. Humphreys

Palo Pinto County insurance lawyers need to understand life insurance.

Life insurance pays a stated amount of benefits to the beneficiary upon the insured’s death. Typically, the policy has a “face amount” that is, a stated value that is payable. Some policies may offer increased benefits if the insured dies from certain causes. For example, some policies pay “double indemnity” benefits if the insured dies in an accident.

“Term” policies pay a fixed amount stated in the policy. Whole life policies accumulate cash value. On the other hand, if the policy allows the insured to borrow against the policy, the death benefit may be reduced by the amount of any outstanding loans.

Life Insurance Application

May 10, 2015 | Mark S. Humphreys

The life insurance application must be attached to the life insurance policy. Any experienced life insurance attorney in the Dallas and Fort Worth area can tell you this. It is emphasized in a Texas Supreme Court case in 1975, styled, Johnson v. Prudential Insurance Co. of America.

This is a lawsuit to collect benefits under a group life insurance policy. The insurance company resisted payment on the ground that the deceased insured willfully deceived the company by her statements made in procuring coverage; the company has obtained favorable findings to support this defense. This appealed followed.

Katherine Johnson was a teacher who obtained insurance upon her life under a group policy issued by the Prudential. She applied for insurance coverage on November 12, 1968. Prudential issued its certificate for her coverage, effective January 1, 1969. The amount of the original benefit was $10,000; it was raised to $12,000 in April of 1969 and then to $15,000 in 1970. Katherine Johnson died on November 16, 1970; her husband was the beneficiary on the insurance contract and brought this suit against the insurer on June 25, 1971.

Temporary Life Insurance Policy

May 7, 2015 | Mark S. Humphreys

Here is an interesting twist for local life insurance attorneys. This is a 1997, Fifth Circuit Court of Appeals case. It is styled, Riner v. Allstate Life Insurance Company.

Riner sued Allstate after Allstate refused to pay benefits under a temporary insurance agreement on the life of her father, Robert Marriott. Allstate defended on the theory that alleged misrepresentations in the insurance application absolved it of liability . The district court granted summary judgment (MSJ) in favor of Allstate, and Riner appealed. The Court reversed the MSJ and ruled in favor of RIner.

Prior to 1994, Mr. Marriott had five back surgeries, which left him with chronic back pain and in depression. Riner wanted to take a life insurance policy naming Riner as beneficiary. On June 29, 1994, Allstate sent an agent to Mr. Marriott’s home to take his application information. Allstate’s lengthy standardized application contained a list of medical questions. The applicant responded to those questions by checking boxes marked “yes” or “no.” When a box was marked “yes,” the application contained additional space for further explanation by the applicant. Mr. Marriott disclosed that he had chronic back problems and certain other medical problems. Mr. Marriott’s application is marked “no,” however, with respect to whether he had ever received treatment for the use of alcohol or received treatment for depression within the past three years.

Application As Part Of The Policy

May 5, 2015 | Mark S. Humphreys

Fort Worth life insurance lawyers can tell you that a policy of life insurance must have attached to it, a copy of the application. Texas Insurance Code, Section 705.103 clearly states:

Except as otherwise provided by this code, a life insurance policy must be accompanied by a copy of:

(1) the policy application; and (2) any questions and answers given in connection with the application.

Denial Of Life Insurance Claim Based On A Misrepresentation In An Application

May 3, 2015 | Mark S. Humphreys

Dallas insurance lawyers will see lots of situations where a person has their life insurance claim denied for the stated reason that the insured made a misrepresentation in the application for insurance. There are a few common law rules standards that apply. It is also important at this stage to understand what the Texas Insurance Code states.

There are several statutory provisions regulating an insurance company’s ability to avoid coverage based on a misrepresentation by the insured in their application for insurance. These statutes are found in the Texas Insurance Code sections 705 and 1201.

Texas Insurance Code, Section 705.003 states: A provision stating that a misrepresentation in a proof of loss makes the policy void or voidable is of no effect and is not a defense, unless the misrepresentation was: