San Antonio — The kinds of trial lawyers who make life interesting for chemical manufacturers and securities issuers are starting to pay more attention to long-term care insurance (LTCI).
Stephen Serfass, a partner at Drinker Biddle & Reath LLP, and Josh Akbar, a partner at Dentons, delivered that news Monday here at the Intercompany Long Term Care Insurance Conference. For Serfass, the ILTCI talk amounted to a sequel to a talk he gave in October, on a Web video conference organized by the American Association for Long-Term Care Insurance (AALTCI). Serfass then told an audience made up largely of LTCI agents and brokers that major plaintiffs’ lawyers began taking a serious interest in LTCI litigation in April 2012, when a woman who had LTCI claim problems won a $34 million jury award.
See also: Lawyer sees more LTCI claim suits
At the ILTCI conference, Serfass and Akbar reviewed a long list of recent ILTCI cases for an audience made up mainly of actuaries and home office executives.
He reported that the number of LTCI-related cases filed in the United States each year has increased to about 50 to 60 each in 2014 and 2015, from fewer than 20 per year a decade ago.
The increase in the number of suits filed is probably due at least partly to the reality that the relatively young people who bought LTCI policies when sales were strong are now getting older. Whenever policyholders file claims, that leads to the possibility that the insurer will reject the claims, and rejected claims occasionally lead to lawsuits, Serfass said.
Plaintiffs’ lawyers are also getting more familiar with how LTCI workers, Serfass said. In the past, he said, plaintiffs’ lawyers that looked at LTCI issuers generally said, “It’s complicated, and there’s not a lot of money there.”
Akbar said “dark” articles about LTCI in big national newspapers have contributed to a tougher litigation climate.
But Akbar and Serfass said insurers have succeeded at fighting off most of the suits.
For a look at some of cases they discussed, read on.
1. Sanchez et al. v. CalPERS et al. (California)
Michael Bidart leads the legal team that brought this case, which has its own website.
Policyholders filed this case in response to a series of a big premium increases at a self-funded LTC benefits program set up by the California Public Employees’ Retiree System (CalPERS). In 2013, CalPERS announced an 85 percent rate increase.
The Sanchez legal team organized a class action against the insurer, its board members and the carriers’ actuary, with charges ranging from breach of contract, to bait and switch, to professional negligence on the part of the actuary.
That case is still under way, Akbar said.
Akbar said some plaintiffs have tried to accuse CalPERS of hiding the fact that its LTC benefits prices could go up, even though the policy said rates could go up in several places.
Image: AP photo/Eric Risberg
2. Toulon v. CNA Financial Corp. (Illinois)
In the Toulon case, a plaintiff is fighting a 76.5 percent rate increase.