Life Insurance Claim And ERISA

Many employer based insurance plans fall under ERISA.  Understanding how the courts look at ERISA cases is important for life insurance lawyers to be able to discuss a case with a client.

The United States Court of Appeals for the Fifth Circuit recently ruled on a case that involved a life insurance policy that was governed by ERISA.  The styled of the case is Jason Freeman v. Securian Life Insurance Company.

Jason Freeman was the father of 17 year old Adrian.  Adrian died instantly when he pulled the trigger of a revolver, the barrel of which he had inserted in his mouth immediately after he had spun the gun’s cylinder and twirled the gun around his finger.  Soon after the death of Adrian, it was determined that the revolver had only one cartridge in the cylinder.  The conclusion by the Deputy Medical Examiner of Bexar County, Texas, was that Adrian’s death was the result of a suicide.

Freeman was employed by Kohl’s Department Stores at the time of Adrian’s death and the employer maintained a group accidental death and dismemberment (AD&D) policy issued by Securian Life Insurance Company.  As a dependent of Freeman, Adrian was covered under the Securian AD&D policy.  The policy was governed by ERISA.  As such, Securian had the exclusive right and sole discretion to interpret the policy’s terms.  Securian’s exercise of its discretionary authority for interpretation of the policy was conclusive and binding on all persons “unless it could be shown that the determination was arbitrary and capricious.”

The parties filed competing motions for summary judgement and the lower court denied Freeman’s and granted Securian’s.   The lower court issued a detailed and exhaustive opinion wherein the court determined regardless of the fact that Adrian’s death was classified as a suicide by the medical examiner, his death was pursuant to AD&D, “caused directly or indirectly by … (1) self-inflicted injury …, or (2) suicide ….”

Here, “suicide” is a red herring.  Excluded from coverage by the AD&D policy is suicide.  Also excluded is self-inflicted injury.  As the lower court determined, Adrian’s death was irrefutably the result of his self-inflicted injury.  The exclusion of Adrian’s death from AD&D coverage under Securian’s policy was not arbitrary and capricious.

This court decided the lower was correct in its decision.