Florida Insurance Law Blog : Florida Insurance Lawyer & Attorney : Mark Nation Law Firm : Orlando, Longwood, Gainesville

My client's brother was riding his motorcycle when another driver turned left in front of him.  The motorcyclist struck the front right corner of the car.  The motorcyclist died at the scene. 

The driver of the car received a ticket for violation of right of way.  The motorcyclist was not speeding, and was not found to be engaging in any improper driving.  However, the motorcyclist's blood alcohol content was .09% - slightly over Florida's legal limit of .08. 

My client's brother was insured under an ERISA Accidental Death and Dismemberment insurance policy issued by Humana.  My client submitted the claim, but Humana denied the claim based on the following exclusion:

Accidental Death or Bodily Injury benefits do not cover loss resulting from:

º The voluntary taking of any sedative, drug, alcohol, poison or inhalation of any gas unless taken or inhaled as prescribed or administered by a Qualified Practitioner.

º Driving or operating a motorized vehicle while legally intoxicated or under the influence of illegal substance. Intoxication means that blood alcohol content or the results of other means of testing blood alcohol level meet or exceeds the legal presumption of intoxication under the law of the state where the accident took place;

Humana simply concluded without explanation that the claim was not covered because the motorcyclist had a BAC of .09.  However, the exclusion requires that Humana prove that the accident resulted from driving while intoxicated.  From the facts of the crash it was obvious that there was nothing the motorcyclist could have done to avoid this collision.  Out of an abundance of caution, I retained an accident reconstruction engineer to reconstruct the crash.  The engineer concluded that

The cause of the MVC was that [the driver of the car] improperly made a left turn in front of [the motorcyclist], leaving insufficient time and distance for a normal alert driver to avoid the crash.

Consequently, Humana cannot carry its burden of proving that the loss "resulted from" the motorcyclist impairment.  

Because this accidental death insurance policy is governed by ERISA I must file an administrative appeal with the insurance company.  The appeal in ERISA is extremely important as the administrative record developed during the appeal will likely be the only evidence a federal judge will review if this case is ever litigated.  Under ERISA, the insured is typically required to show that the insurance company's decision was arbitrary and capricious based on the evidence which it had before it at the time it makes its decision.  Thus, the appeal must be thorough and complete, as there will likely be no more evidence allowed even if a lawsuit is filed. 

This case is proceeding on a contingency fee basis.  If I am forced to litigate I will seek fees from Humana or the ERISA plan administrator under 29 U.S.C. Section 1132(g). 

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My client's husband had a seizure and fell in his home.  He struck his head on the floor which resulted in a traumatic brain injury.  Tragically, he later died of the TBI. 

At the time of his death, he was a plan participant in an ERISA benefits plan sponsored by his employer.  One of his benefits was an Accidental Death and Dismemberment insurance policy issued by Metropolitan Life.  His widow submitted the claim for Accidental Death and Dismemberment benefits. 

The ERISA policy contained an exclusion for losses that are "caused by or contributed to" by a medical condition.  Metlife denied the claim based on the medical condition exclusion. 

I have filed an administrative appeal under ERISA.  I believe that the exclusion only applies to deaths that are caused by a medical condition, not accidents that are caused by medical conditions.  Case law from as far back as the 1800's support our position on this appeal. 

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We filed suit against Metropolitan Life Insurance Company for life insurance benefits. Our client, a pastor, became disabled and continued his life insurance coverage under a waiver of premium provision in the life insurance policy. He was advised by the policy holder that coverage would be provided both for him and his spouse. Following his disability, MetLife terminated his spousal coverage and did not notify him that the coverage had terminated. Several years later, his wife died and he filed a claim for benefits. It was only then that he learned that coverage had previously been terminated on his wife. Litigation continues.

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On Monday, we received Summary Judgment in our client's favor in a federal court ERISA life insurance case against Sun Life Assurance Company of Canada. The Plaintiff was the son of the decedent. The decedent was a nurse employed by a local nursing home. She ceased working in February 2007 as a result of some health problems. While out of work, her employer changed life insurance carriers for its employees.  Shortly after the changeover our client's mother died. 

The life insurance claim was submitted to Sun Life - the employer's new insurance company - which denied the claim.  Sun Life argued that the employer, to whom the policy was issued, failed to list Plaintiff’s mother as a disabled employee, and that she was still entitled to life insurance from the previous insurance company at the time of her death.  However, the Sun Life policy included a provision relating to “continuity of coverage.”  This provision provides that an individual will be covered, under the new policy, if the employee had been covered under the prior life insurance company and was not actively at work at the time the change in carriers took place.

We filed suit in the United States District Court for the Middle District of Florida.  The parties agreed that the claim was governed by ERISA, and thereafter, the parties filed cross motions for summary judgment.  Sun Life’s motion was denied, Plaintiff’s motion was granted.  Plaintiff’s son was awarded full life insurance benefits. The issue of our attorneys fees and costs remains pending before the court. 

 

A copy of the Court's ruling can be downloaded here. 

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By virtue of a divorce decree, Lovallo was the equitable owner of a ten-year, renewable, term life insurance policy her former husband purchased from Jackson.  Lovallo states that she notified Jackson that she was the equitable owner of the policy, and that in spite of this notice, Jackson did not notify her at the expiration of the 10 years that the policy was set to expire.  If she had been provided notice, she could have renewed the policy.  Her former husband died shortly after the policy expired. 

The 1st DCA "assume[d] without deciding" that Lovallo had all the rights of any owner of the policy.  (The court cited several cases that supported this assumption).  But, then held that as an owner, Lovallo was not entitled to notice that the policy was expiring.  There court noted that was nothing in the policy itself that required the insurer to give notice that the policy was expiring and could be renewed, and there was no statute that required such notice.  The court noted that statutory notice of the ability to renew is required with regard to many different types of insurance, such as,  automobile, worker's comp, marine, property, and casualty insurance, but that no such notice is required with regard to life insurance.  See, Jackson National Life Insurance Company v. Lovallo, ____ So.2d ____ (Fla. 1st DCA May 4, 2009). 

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My client is the beneficiary of an accidental death policy which was taken out on her fiance.  Tragically, her fiance was killed in a car accident.  The crash was caused by the other driver who was intoxicated.  Our client's fiance was also allegedly above the legal limit for alcohol.  The accidental death policy contains an exclusion for deaths that states "This certificate does not cover injuries received while under the influence of alcohol."  The insurance company denied the claim based on this exclusion. 

The insurance company has the burden of proving that the claim is excluded.  I have handled numerous cases such as this past, and frequently the insurance company has trouble carrying its burden.  Not only does the insurer have to prove that the decedent was intoxicated, but case law requires that the insurer also prove that the intoxication caused the death.  Here, the other driver lost control of his car, crossed the center line, and struck the decedent's car head-on.

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Our client was the beneficiary of an ERISA life insurance policy that the decedent had taken out through his employer.  Tragically, the decedent was killed in a motor vehicle accident, and cocaine was detected in his system.  The life insurance policy contained an exclusion for deaths if a person is "under the influence of narcotics."  The life insurance claim was denied based on this exclusion. 

We were successful in forcing the insurance company to pay the life insurance proceeds based on two simple grounds. First, cocaine is not a narcotic.  We retained an expert pharmacologist who testified that narcotics are a derivative of opium, and are a depressant to the system; while cocaine is derives from the coca plant, and is a stimulant to the system.  In fact, they are pharmacologically opposites. 

Second, there is no level over which a person is considered "under the influence" of cocaine.  Thus, we argued that the ERISA insurer could not carry its burden of proof on this element of its exclusion.   

We filed suit on this case, but the insurer settled shortly after receiving our Motion for Summary Judgment. 

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Generally, in order to take out a life insurance policy on someone, you must have an "insurable interest" in the life of that person.  "Insurable interest" is defined in our Florida Statutes at Section 627.404.  However, Stranger-Originated Life Insurance (STOLI) transactions involve a plan to initiate or originate a life insurance policy for the benefit of investors who seek to profit from purchasing life insurance on a stranger.  Many, if not most, of these transactions involve using fraudulent means such as misrepresentation, falsification, or omission of material facts on the life insurance application.  (Under Florida's "incontestability" statute, Section 627.455, an insurance company cannot void a policy for application misstatements after the policy has been in effect for more than two years – even fraudulent misstatements.)

The Office of Insurance Regulation report documents that many of these STOLI transactions involve life insurance on seniors, and sets forth in the report many of the adverse consequences that can occur.  A copy of the Florida Office of Insurance Regulation STOLI report can be downloaded by clicking here. 

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Our client is the daughter of a deceased State of Florida retiree. In 2007, the State of Florida changed the amount of life insurance benefits it offered to its employees. The retiree died 5 months after the change in coverage took effect.

Prior to 2007, the State of Florida had always conducted “passive enrollment” during the open enrollment period. In other words, if an employee took no action during the open enrollment period, the coverage they had for the previous year would remain in effect for the next year.

When the amount of life insurance changed in 2007, the State changed from passive enrollment to active enrollment forcing retirees to actively elect to keep the prior level of coverage.

We have filed suit, arguing that the State violated its own policy and procedure and that Prudential should pay the benefit amount in effect prior to the 2007 change. 

Litigation continues both in State Court as well as administratively through the State of Florida.

 

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We recently filed a lawsuit against Sun Life Assurance Company of Canada for life insurance benefits. Our client, the son of the decedent, argues that his mother was covered at the time of her death and therefore benefits are payable. Sun Life Assurance Company of Canada argues that our client's mom was not covered at the time of her death.

In particular, the insurance company argues that the employer, to whom the Policy was issued, failed to list Plaintiff’s mother as a disabled employee, still entitled to life insurance coverage, when the Policy transitioned from one carrier to another. The Sun Life Policy in affect at the time of his mom’s death includes a provision relating to “Continuity of Coverage.” This provision provides that if you were covered under the employer’s prior life insurance policy, then you will be covered under the new carrier’s policy.  Litigation continues.

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In United Ins. Co. v. Office of Ins. Regulation, 985 So.2d 665 (Fla. 1st DCA 2008), the court upheld an order from the Florida Office of Insurance Regulation which prohibited a mandatory arbitration clause in life insurance policies.

United Insurance Company of America sells life insurance in Florida, and its life insurance contract had been approved by the Office of Insurance Regulation.  On March 1, 2006, the insurance company filed an application with the Office of Insurance Regulation to include a mandatory arbitration provision to its life insurance contract. 

The Office of Insurance Regulation denied the insurance company's request on the bases the proposed arbitration agreement did not comply with Florida Statutes Sections 624.155 (providing a civil remedy for insurer violations); 627.428 (providing attorney's fees for successful litigation against insurance companies); and 627.455 (providing circumstances under which a life insurance policy is incontestable after 2 years from the date of issue).  The Office of Insurance Regulation also found the insurance company's proposed arbitration agreement "contained inconsistent or ambiguous clauses, or exceptions and conditions which deceptively affected the risk purported to be assumed in the general coverage of the contract."

The insurance company appealed.

The First District Court of Appeal initially noted that the provisions of the Federal Arbitration Act establish the right to resolve any dispute through binding arbitration.  However, the Federal Arbitration Act does not preempt the state's rights to regulate insurance because Congress, through the enactment of the McCarran-Ferguson Act, determined that the business of insurance is the exclusive province of the individual states. 

In order for the McCarran-Ferguson Act to apply and prevent preemption, a three prong test is applied: (1) whether the federal law relates specifically to the insurance business to bar the application of a state statute; (2) whether the state statute was specifically enacted to regulate the insurance business; and (3) whether the state statute would be impaired, invalidated, or superseded by application of the federal law.  (Moore v. Liberty Nat'l Life Ins. Co., 267 F.3d 1209 (11th Cir. 2001))

The parties agreed that the Federal Arbitration Act does not specifically relate to the business of insurance.  The court explicitly found that Section 624.155, Fla. Stat. was enacted to regulate the business of insurance, and that the statute would be impaired, invalidated, or superseded by the Federal Arbitration Act.  Specifically, the court held that Section 624.155, Fla. Stat. provides for a civil action, with relevant procedural protections, courts costs, and attorneys fees.  The court also found that mandatory binding arbitration lacks the procedural and constitutional protections (such as a jury and certain appeals) which are inherent in a civil action.  (Due to this finding, the court did not address whether the arbitration agreement would impair, invalidate, or supersede Florida Statute Sections 627.428 and 627.455.)

The court then affirmed the final order of the Office of Insurance Regulation which denied the application for a mandatory arbitration provision.

The Office of Insurance Regulation can be found at: HTTP://www.floir.com/

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