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November 27, 2006 at 12:28 PM
The U.S. Supreme Court says the 9th U.S. Circuit Court of Appeals should take another look at a group long-term disability insurance case involving allegations of abuse of discretion.
The Supreme Court has issued a summary order asking the 9th Circuit to reconsider a ruling on the case, Metropolitan Life Insurance Company vs. Peggy Hawkins-Dean.
The Supreme Court also has given the American Council of Life Insurers, Washington, permission to file a brief giving its views on the case.
The Metropolitan Life ruling deals with use of a discretionary clause, or policy provision that gives an insurer the discretion to interpret policy terms, in a group LTD policy governed by the Employee Retirement Income Security Act.
The plaintiff in the case, Peggy Hawkins-Dean, is a group LTD claimant who suffers from fibromyalgia. She sued Metropolitan Life, a unit of MetLife Inc., New York, after the company excluded stock option income from the base income used to compute benefits. That reduced the base income in benefits calculations to $28,850 per year, from $151,855 per year, according to court pleadings.
