On November 30, 2007, the 10th Circuit Court of Appeals issued the decision in Jewell v. Life Ins. Co. of North America, 2007 WL 4218919. In this case, Mr. Jewell was seeking long term disability benefits through a group policy purchased with LINA (CIGNA) on behalf of the employees of Sprint Telecommunications. Mr. Jewell was suffering from severe headaches, dizziness, panic attacks, and depression. His benefits were denied under the policy’s mental illness limitation. After the lawsuit was transferred to federal court, the attorney for Plaintiff sought to introduce two additional opinions from Plaintiff’s physicians. Whether or not additional evidence can be presented following the insurance company’s determination of a claim is dependent upon the standard of review the court is to apply. If discretionary authority has been granted to the insurance company, the “arbitrary and capricious” standard of review will be applied by the trial court. If discretion has not been granted, the court’s review is “de novo” (of new). The Jewell decision addresses the admissibility of evidence in a de novo proceeding, and, (more…)
Each year, Colorado’s General Assembly amends the Colorado Worker’s Compensation Act. The changes in 2007 are critical in many respects. They are highlighted below.
Senate Bill 07-258
• Slight changes to worker’s compensation evidentiary hearings specific to notice, time schedule, evidence and orders;
• Increases the aggregate of all lump sums granted to $60,000, from the old maximum of $37,560;
• Requires automatic payment of up to $10,000 in a lump sum for both scheduled and non-scheduled awards.
House Bill 07-1297
• Increases the award for disfigurement to a maximum of $4,000, and an award of up to $8,000 for extensive facial or body scars, burn scars, or stumps resulting from loss of limbs.
House Bill 07-1008
• Creates a presumption of an occupational disease for a disability, death, or impairment suffered by a fire fighter which results from certain types of cancer.
House Bill 07-1176
• Affords a claimant the opportunity to select a treating physician from a list of at least two physicians or provider systems designated by the employer. Previously, the Respondent selected the authorized treating physician with no choice being offered to the injured worker;
• Allows the claimant a one-time change of position to a physician or provider on the employer’s designated list. This changes in addition to the existing procedure which allows the claimant to request a change of physician at any time with permission from the insurer.
House Bill 07-1366
• Requires that a person contracting construction work on a construction site either provide or require proof of worker’s compensation insurance coverage for every person performing construction work on that site;
• Does not apply to independent contractors who have formed corporations and have rejected coverage; corporate officers and members of limited liability companies who have rejected coverage; owners, occupants (or both), of a qualified residence who contract work to be done by a person not in their employ; owners, occupants (or both), who contract for routine repair or maintenance.
On December 13th, California Insurance Commissioner Steve Poizner announced his intent to seek $12.6 million dollars in fines and penalties against insurer Blue Cross Blue Shield based upon the results of a Market Conduct Examination. The examination revealed extensive violations in claims handling and improper rescissions.
Among these violations, the examination found Blue Cross had not paid claims in a timely manner; failed to maintain all documents and notes in the claim file; failed to pay interest when required to do so; misrepresented the coverage available under a policy by, in some instances, including misleading ERISA language in non-ERISA policies; sought immaterial information or information already in its possession in handling claims; failed to engage in prompt and fair settlement of claims after liability was established; and failed to complete medical underwriting after receiving the application for insurance, among other violations.
Commissioner Poizner took a strong position against these practices, stating, “[l]et this be a message to all health insurers that we will not tolerate irresponsible rescissions and shoddy claims handling. We will target this behavior on an industry-wide basis and continue to take appropriate action as needed.” You can read the Market Conduct Examination here and can read a copy of the California Department of Insurance press release here.
Heather L. Petitmermet
Blog Author
During Colorado’s most recent legislative session, a new law was added to the books which will effectively increase a Colorado insured’s limits under their Uninsured or Underinsured (UM/UIM) motorist coverage. Visit our uninsured / underinsured motorist page to refresh yourself on the nature of UM/UIM coverage.
Prior to this legislative change, the coverage available to an injured party in Colorado under their UM/UIM coverage was reduced by the amount of money paid to him or her by the responsible party’s Bodily Injury insurance carrier. As an example, if your policy provides for the minimum limits of $25,000 per person/$50,000 per accident underinsured motorist coverage, but you have received the limits of the responsible driver’s insurance policy which were also $25,000/$50,000, then no claim existed under your UM/UIM feature of your own insurance policy. However, starting in 2008, the UM/UIM carrier is no longer entitled to offset amounts of money the injured insured received under another policy. In the scenario above, the total available under all insurance policies effectively increases to $50,000/$100,000, if your injuries and losses justify the recovery of course. This new law only applies to policies issued or renewed after the January 1, 2008 effective date.
We have always counseled our clients that UM/UIM coverage is perhaps the most important type of coverage to be purchased on your automobile policy. While Bodily Injury (BI) protection is required by law, an insured in Colorado may reject UM/UIM coverage in writing. In our opinion, this would be a mistake. UM/UIM coverage is typically the least expensive type of coverage you can obtain on your policy and effectively insures every other driver out on the road who either does not have insurance or does not have enough insurance. We recommend that you purchase BI and UM coverage limits of at least $100,000/$300,000, even more if you are able to do so.