Life Insurance And The Employee Retirement Income Security Act

The Employee Retirement Income Security Act (ERISA) is a confusing area of law for most people who have those type of policies and it is also confusing for attorneys.  An opinion dealing with the time periods for filing a life insurance claim are discussed at length in a 2021 opinion from the Western District of Texas, Austin Division.  The opinion is styled, Dusty Bauer and Allan Agababa v. National Union Fire Insurance Company of Pittsburg, PA and AIG Claims, Inc.

This lawsuit is concerning accidental death benefits owed upon the death of Shelly Bernstein (Decedent).

The Decedent had an accidental death benefit policy through his employer which was funded by National and AIG.  The policy limited conditions under which the death benefits would be paid by providing contractual limitations periods.  Some of those limitations periods read as follows:

Notice of Claim. Written notice of claim must be given to the Company within 20 days after an Insured Person’s loss, or as soon thereafter as reasonably possible.  Notice given by or on behalf of the claimant to the Company at Chartis Claims Department, P.O. Box25987, Shawnee Mission, KS 66225, with information sufficient to identify the Insured Person, is deemed notice to the Company.. . .

Proof of Loss. Written proof of loss must be furnished to the Company within 365 days after the date of the loss.  If the loss is one for which this Policy requires continuing eligibility for periodic benefit payments,subsequent written proofs of eligibility must be furnished at such intervals as the Company may reasonably require.  Failure to furnish proof within the time required neither invalidates nor reduces any claim if it was not reasonably possible to give proof within such time, provided such proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity of the claimant, later than one year from the time proof is otherwise required.. . .

Legal Actions. No action at law or in equity may be brought to recover on this Policy prior to the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of this Policy.  No such action may 3be brought after the expiration of three years after the time written proof of loss is required to be furnished.

On May 29, 2018 –close to five years after Decedent’s death –Plaintiffs through counsel submitted a claim for accidental death benefits per the Policies.

The claim was denied due to the late filing for benefits and this lawsuit resulted wherein this Motion for Summary Judgment was filed.

The opinion discusses the time line of events and then discussed the standard of review for ERISA cases and then is followed by discussion.  For someone facing an issue with the timeliness of filing a claim under an ERISA policy, this case is a must read.

The Magistrate Judge hearing this case ultimately said:

According to the terms of the Policies and the Plan that this dispute is predicated on, Plaintiffs should have filed their initial claim promptly, or at least not dilatorily, so they could then timely file this lawsuit if needed.  Instead, Plaintiffs chose to sit on their hands and wait five years to instigate the underlying claim proceeding, causing the three-year limitation period to lapse and this lawsuit to be untimely filed.  Accordingly, the undersigned recommends the District Court find Plaintiffs’ ERISA action barred by the contractual limitations provision contained within the Policies.  Because the undersigned reports that Plaintiffs did not file suit within the time allowed under the Policies’ reasonable limitations period, it does not reach the various other arguments levied by the parties.


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