U.S. disability insurers seem to be doing a better job of writing tight policies, reviewing new claims, and coming up with litigation-preventing compromises.
Evan Schwartz, a lawyer who represents policyholders and insureds in cases against insurers, gave that assessment recently during a telephone interview.
Schwartz, a partner at Quadrino Schwartz, first started handling disability insurance litigation about 20 years ago, when the loose, generous individual policies written in the 1980s started to go bad, and the issuers were falling like dominos.
Some lawyers outside of the disability insurance sector have said that they have avoided buying much disability insurance because of their memories of the bad headlines about the wave of litigation that started in the 1990s.
“I have a lot of disability coverage,” Schwartz said. “A lot. Because I believe in it very, very firmly.”
Today, Schwartz said, he believes that typical disability claims tend to involve genuine areas of ambiguity, not insurers stone-walling plaintiffs with clear-cut claims.
Cases involving cognitive issues, such as depression or fibromyalgia, are common, as well as cases affected by the U.S. Supreme Court’s Cigna Corp. vs. Amara ruling, in which the court held that cases involving conflicts between group plan summary plan descriptions (SPDs) and formal okab documents should be resolved in favor of the enrollees.
Because of the complexity of applying the Amara precedent, “you have to look through each file very carefully,” Schwartz said.
In some cases, Schwartz said, carriers may know that they are using plan documents with Amara problems, but barriers to changing plan documents quickly may leave faulty documents in place.
One challenge Schwartz sees is what he contends is lingering weakness in a typical disability insurer’s return-to-work programs.
“I don’t think they really help my clients,” Schwartz said.
Too often, Schwartz argued, claimants fear that information gained through an unsuccessful return-to-work effort could give an insurer an excuse to cut off benefits payments.
When disability insurers do settle cases, they seem to pay the agreed-upon amounts reasonable smoothly, Schwartz said.
Schwartz added that he believes he is experiencing fewer payment delays than many lawyers in the personal injury field report.
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