GE short term disability keeps using tactics of delay and denial and will not pay benefits, what can i do
Total Comments: 11
Posted: Wed Nov 10, 2010 09:29 pm Post Subject:
File a complaint with your states Dept of Insurance.
Posted: Thu Nov 11, 2010 03:00 am Post Subject:
Well some insurance companies always do that deliberately as it benefits them. so i would also suggest complaining to your state insurance department. you can even consult your lawyer after that.
Posted: Thu Nov 11, 2010 04:13 am Post Subject:
some insurance companies always do that deliberately
Goody . . . your inexperience is showing again. There are no insurance companies that make a DELIBERATE practice out of denying claims. It's 100% against the law!
The OP has not given us enough information to automatically cast the insurance company in a bad light, only his side of the story. There are always 2 sides.
Filing a complaint with the State's Dept of Insurance is the appropriate thing to do if the situation is as the OP has alluded to. They will get to the bottom of the situation.
Posted: Thu Nov 11, 2010 05:39 am Post Subject:
There are no insurance companies that make a DELIBERATE practice out of denying claims. It's 100% against the law
I don't know if I'd go that far. There certainly are insurance companies that look for _any_ reason (no matter how shady) to deny a claim. There are also insurance companies that take forever to process a claim.
I'll give just one example that comes to mind (unrelated to this post)... One insurance company I know of would issue rental coverage to an insured with a 30/600 limit. But they only pay for a compact rental at $18/day. Clearly a violation as the insured was paying for up to $30/day in coverage. The insurance company said (laughable at best) that the coverage provided for a rental and this is what they were giving. I'm sure they saved millions every year in this way.
Posted: Thu Nov 11, 2010 06:17 am Post Subject:
But they only pay for a compact rental at $18/day. Clearly a violation
Yes, and California settled that one years ago. Doesn't happen here anymore. If the policy entitles the insured to 30/900 they can spend $30 (or more, at their own expense) per day on a rental car of their choosing, up to the $900 policy limit. It doesn't even come up for discussion. (Assumes that the claim is not ended before the 30 days elapses.)
As far as I know, all of the states have, with some modifications perhaps, adopted the NAIC Model Unfair Practices Act. And most state laws specifically prohibit as a general practice, denying claims just to deny claims. It's also not permitted to unreasonably delay payment of a claim where liability is clear or determined.
Obviously, some insurance companies go out of their way to stay just within the confines of the law. If the regulators never hear about it, it can persist for a long time. That doesn't make it legal. If people used the resource of their state's Dept of Insurance more frequently, such companies would either be operating properly or they would be out of business.
As I have said before, insurance companies are in business to make money, but they stay in business by paying claims.
Posted: Thu Nov 11, 2010 01:30 pm Post Subject:
Just because the law exists doesn't mean insurance companies follow it. Need I remind everyone of the news coverage about UNUM?
While it may not be a policy in the company handbook, a lot of them tend to drag their feet.
Posted: Thu Nov 11, 2010 06:25 pm Post Subject:
You raise an excellent point with UNUM. The fact that they were denying claims unfairly became the subject of numerous complaints. And as a result, it became a national issue. And a multimillion dollar judgment to the states (courtesy of the CA Dept of Insurance and a couple of other DOIs, too) was the result, in addition to policyholder restitution.
Damage was done, courtesy of an insurance company that knew what the rules were, but chose to violate them. And they got hammered. But they're still in business and they have (supposedly) changed their ways.
Without the complaints . . . it may never have come to light. Rely on the Dept of Insurance to get the job done.
Posted: Fri Nov 12, 2010 02:57 am Post Subject:
Max,
thanks for correcting me again, its nice to know that they can be tried in courts for this. or let me ask can they be tried at courts if they do not process the claims with in a specified period?since these delays could be killing.
Posted: Fri Nov 12, 2010 08:58 am Post Subject:
Claims handling problems are initially a problem between the insurance company and the state's Dept of Insurance. Violations of the Unfair Claims Settlement Practices Act/Unfair Practices Act are "administrative" and not criminal -- so the violations themselves do not get adjudicated in court, but in a hearing before the regulator.
However, those same violations are also subject to civil litigation between the insurance company and persons who have been "injured" by the lack of good faith on the part of the insurance company. A violation is the cause of action that permits the lawsuit to proceed to trial.
In most states, once a claim has been determined to be payable, the payment is due within about 40 days from that point in time. There are legitimate reasons, occasionally, to delay payment of the claim (such as a last-minute contest over the payment of a death claim), but when the insurance code states that the time of payment of claims is "immediately", it means sooner rather than later.
Although I stated that insurance companies do not deliberately make a practice out of denying claims, a statement which I still stand by, some companies, such as UNUM have been found to have willfully denied claims on such a large scale that it could not have been a "random" event. And it eventually cost UNUM a HUGE amount of money to settle with the various states and policyholders.
What UNUM did, among other things, was to issue OWN OCCUPATION disability income insurance policies to professional persons, like registered nurses and physicians, and then, when a claim came in, applied a definition of "own occupation" that did not allow most of those injured/disabled persons to receive a claims payment. Like telling the nurses that sitting all day and writing notes in patient charts was the essential duty of their "own occupation" (rather than providing the actual patient care that they did 90% of the time, while only about 10% of their time was charting that care), so because they could still do their "own" work, they were not disabled.
According to the various state insurance codes, UNUM's practices should not have been happening. So when I said no company deliberately does this, the intent was to say that if an insurance company only collects premiums and NEVER pays a claim . . . ever . . . that it will not be allowed to continue in business. When companies engage in unfair claims practices, they eventually get caught.
United Health Care is, to the best of my knowledge, still negotiating with the CA Dept of Insurance over more than 10,000 claims handling and other business practice violations (postclaims underwriting, etc) that were identified in a market conduct exam about a year ago or so.
When the CDI'a pending action was first announced, because the number of violations discovered was so large, the contention of the CDI was that this must have been a "general business practice", and the Insurance Code provides for a $10,000 fine for each such unlawful act. The total fine could exceed $1,000,000,000 and UHC could lose its certificate of authority to continue doing business in the state.
My post was not to indicate that such things DON'T happen, because they obviously do, but that they are not supposed to happen. When committed to such an extent that they are found to be deliberate, even though it is not a "criminal" act, it can result in the DEATH PENALTY -- loss of one's license to do business. In our industry, without that license (certificate of authority), one might as well be dead.
Posted: Wed Nov 10, 2010 09:29 pm Post Subject:
File a complaint with your states Dept of Insurance.
Posted: Thu Nov 11, 2010 03:00 am Post Subject:
Well some insurance companies always do that deliberately as it benefits them. so i would also suggest complaining to your state insurance department. you can even consult your lawyer after that.
Posted: Thu Nov 11, 2010 04:13 am Post Subject:
some insurance companies always do that deliberately
Goody . . . your inexperience is showing again. There are no insurance companies that make a DELIBERATE practice out of denying claims. It's 100% against the law!
The OP has not given us enough information to automatically cast the insurance company in a bad light, only his side of the story. There are always 2 sides.
Filing a complaint with the State's Dept of Insurance is the appropriate thing to do if the situation is as the OP has alluded to. They will get to the bottom of the situation.
Posted: Thu Nov 11, 2010 05:39 am Post Subject:
There are no insurance companies that make a DELIBERATE practice out of denying claims. It's 100% against the law
I don't know if I'd go that far. There certainly are insurance companies that look for _any_ reason (no matter how shady) to deny a claim. There are also insurance companies that take forever to process a claim.I'll give just one example that comes to mind (unrelated to this post)... One insurance company I know of would issue rental coverage to an insured with a 30/600 limit. But they only pay for a compact rental at $18/day. Clearly a violation as the insured was paying for up to $30/day in coverage. The insurance company said (laughable at best) that the coverage provided for a rental and this is what they were giving. I'm sure they saved millions every year in this way.
Posted: Thu Nov 11, 2010 06:17 am Post Subject:
But they only pay for a compact rental at $18/day. Clearly a violation
Yes, and California settled that one years ago. Doesn't happen here anymore. If the policy entitles the insured to 30/900 they can spend $30 (or more, at their own expense) per day on a rental car of their choosing, up to the $900 policy limit. It doesn't even come up for discussion. (Assumes that the claim is not ended before the 30 days elapses.)
As far as I know, all of the states have, with some modifications perhaps, adopted the NAIC Model Unfair Practices Act. And most state laws specifically prohibit as a general practice, denying claims just to deny claims. It's also not permitted to unreasonably delay payment of a claim where liability is clear or determined.
Obviously, some insurance companies go out of their way to stay just within the confines of the law. If the regulators never hear about it, it can persist for a long time. That doesn't make it legal. If people used the resource of their state's Dept of Insurance more frequently, such companies would either be operating properly or they would be out of business.
As I have said before, insurance companies are in business to make money, but they stay in business by paying claims.
Posted: Thu Nov 11, 2010 01:30 pm Post Subject:
Just because the law exists doesn't mean insurance companies follow it. Need I remind everyone of the news coverage about UNUM?
While it may not be a policy in the company handbook, a lot of them tend to drag their feet.
Posted: Thu Nov 11, 2010 06:25 pm Post Subject:
You raise an excellent point with UNUM. The fact that they were denying claims unfairly became the subject of numerous complaints. And as a result, it became a national issue. And a multimillion dollar judgment to the states (courtesy of the CA Dept of Insurance and a couple of other DOIs, too) was the result, in addition to policyholder restitution.
Damage was done, courtesy of an insurance company that knew what the rules were, but chose to violate them. And they got hammered. But they're still in business and they have (supposedly) changed their ways.
Without the complaints . . . it may never have come to light. Rely on the Dept of Insurance to get the job done.
Posted: Fri Nov 12, 2010 02:57 am Post Subject:
Max,
thanks for correcting me again, its nice to know that they can be tried in courts for this. or let me ask can they be tried at courts if they do not process the claims with in a specified period?since these delays could be killing.
Posted: Fri Nov 12, 2010 08:58 am Post Subject:
Claims handling problems are initially a problem between the insurance company and the state's Dept of Insurance. Violations of the Unfair Claims Settlement Practices Act/Unfair Practices Act are "administrative" and not criminal -- so the violations themselves do not get adjudicated in court, but in a hearing before the regulator.
However, those same violations are also subject to civil litigation between the insurance company and persons who have been "injured" by the lack of good faith on the part of the insurance company. A violation is the cause of action that permits the lawsuit to proceed to trial.
In most states, once a claim has been determined to be payable, the payment is due within about 40 days from that point in time. There are legitimate reasons, occasionally, to delay payment of the claim (such as a last-minute contest over the payment of a death claim), but when the insurance code states that the time of payment of claims is "immediately", it means sooner rather than later.
Although I stated that insurance companies do not deliberately make a practice out of denying claims, a statement which I still stand by, some companies, such as UNUM have been found to have willfully denied claims on such a large scale that it could not have been a "random" event. And it eventually cost UNUM a HUGE amount of money to settle with the various states and policyholders.
What UNUM did, among other things, was to issue OWN OCCUPATION disability income insurance policies to professional persons, like registered nurses and physicians, and then, when a claim came in, applied a definition of "own occupation" that did not allow most of those injured/disabled persons to receive a claims payment. Like telling the nurses that sitting all day and writing notes in patient charts was the essential duty of their "own occupation" (rather than providing the actual patient care that they did 90% of the time, while only about 10% of their time was charting that care), so because they could still do their "own" work, they were not disabled.
According to the various state insurance codes, UNUM's practices should not have been happening. So when I said no company deliberately does this, the intent was to say that if an insurance company only collects premiums and NEVER pays a claim . . . ever . . . that it will not be allowed to continue in business. When companies engage in unfair claims practices, they eventually get caught.
United Health Care is, to the best of my knowledge, still negotiating with the CA Dept of Insurance over more than 10,000 claims handling and other business practice violations (postclaims underwriting, etc) that were identified in a market conduct exam about a year ago or so.
When the CDI'a pending action was first announced, because the number of violations discovered was so large, the contention of the CDI was that this must have been a "general business practice", and the Insurance Code provides for a $10,000 fine for each such unlawful act. The total fine could exceed $1,000,000,000 and UHC could lose its certificate of authority to continue doing business in the state.
My post was not to indicate that such things DON'T happen, because they obviously do, but that they are not supposed to happen. When committed to such an extent that they are found to be deliberate, even though it is not a "criminal" act, it can result in the DEATH PENALTY -- loss of one's license to do business. In our industry, without that license (certificate of authority), one might as well be dead.
Posted: Mon Nov 15, 2010 03:41 am Post Subject:
Thanks Max. you explained it nicely as always.
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