Insurance Law Spring 2009 Class Session 5 page 1 by KevenMealamu

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									Insurance Law Spring 2009                                          Class Session 5
                                                                           page 1


SLIDES                                                     NOTES
CHARNEY v. ILLINOIS MUT.                            354
LIFE CAS. CO. (Pg 346)

CHARNEY v. ILLINOIS MUT. LIFE 355
BLOOD PRESSURE MEDICINE MAKES
VETERINARIAN DEPRESSED
INJECTS HIMSELF WITH
“HORSE KILLER” SHOT AND DIES

CHARNEY v. ILLINOIS MUT. LIFE     356
IS LIFE INSURANCE BARRED BY
“SUICIDE, SANE OR INSANE” CLAUSE?

CHARNEY v. ILLINOIS MUT. LIFE    357
HELD: YES - SUICIDE BARS RECOVERY
UNDER “SANE OR INSANE” CLAUSE,
REGARDLESS OF INSANITY CAUSE

CHARNEY v. ILLINOIS MUT. LIFE    358
COURTS PRIOR TO “SANE OR INSANE”
CLAUSE FELT NO SANE PERSON WOULD
EVER KILL HIMSELF

Ch 5 A 8 Life Ins. - Negligence Actions Against Ins. Co.


MAURONER v. MASSACHUSSETS
INDEMNITY LIFE INS. CO. (Pg. 349)                   359

MAURONER v. MASS. INDEM.      360
INSURANCE COMPANY DELAYS ISSUING
POLICY TIMELY

MAURONER v. MASS. INDEM.       361
MORE THAN 2 YEARS FROM DATE POLICY
WOULD HAVE ISSUED BUT FOR DELAY
BUT LESS THAN TWO YEARS FROM
ACTUAL DATE INSURED KILLS HIMSELF

MAURONER v. MASS. INDEM.         362
POLICY HAS A 2 YEAR SUICIDE CLAUSE
Insurance Law Spring 2009                               Class Session 5
                                                                page 2


SLIDES                                          NOTES
MAURONER v. MASS. INDEM.        363
IS INSURANCE COMPANY LIABLE ON
POLICY? HELD: YES, INSURANCE COMPANY
OWES DUTY TO EXERCISE ORDINARY
CARE IN HANDLING APPLICATION

MAURONER v. MASS. INDEM.        364
MORE NORMAL FACT PATTERN: PROPOSED
INSURED DIES WITH APPLICATION PENDING

MAURONER v. MASS. INDEM.       365
BENEFICIARY MUST SHOW PROXIMATE
CAUSE (THAT HE WOULD HAVE BEEN
ABLE TO GET INSURANCE)

OKLAHOMA IS IN ACCORD:               366
PEDDICORD v. PRUDENTIAL, (Supplement, pg. 12)
BUT BENEFICIARY MUST SHOW
PROXIMATE CAUSE
WILSON v. MASS. INDEM, (Supplement, pg. 12)

BACON v. FED. KEMPER LIFE      367
(Note 2, pg 354)
INSURANCE COMPANY OWES DUTY TO
EXERCISE ORDINARY CARE IN HANDLING
BENEFICIARY CHANGE BUT HERE NO
BREACH OF DUTY

BAJWA v. METROPOLITAN LIFE        368
INSURANCE CO. (Note 2, Pg. 354)
LIFE INS. CO. OWES DUTY TO NOTIFY
INSURED OF POLICY TAKEN OUT ON
HIS LIFE

IN OKLAHOMA, 36 OS § 3607      369
REQUIRES CONSENT OF INSURED
EXCEPT SPOUSE MAY INSURE
OR PARENTS MAY INSURE CHILDREN
Insurance Law Spring 2009                                    Class Session 5
                                                                     page 3

SLIDES                                               NOTES
Chapter 5 B Health Insurance
Chapter 5 B 1 a Pre-existing Condition Limitations

LAWSON V. FORTIS INSURANCE                  370
COMPANY (p. 357)

LAWSON V. FORTIS INSURANCE      371
TWO DAYS BEFORE HEALTH POLICY
EFFECTIVE PARENTS TAKE CHILD TO
ER WHERE DIAGNOSIS IS
“UPPER RESPIRATORY INFECTION”

LAWSON V. FORTIS INSURANCE                  372
TURNS OUT CHILD HAS LEUKEMIA

LAWSON V. FORTIS INSURANCE      373
POLICY EXCLUDES TREATMENT FOR
PRE-EXISTING CONDITION (ONE FOR
WHICH ADVICE OR TREATMENT WAS
RECOMMENDED WITHIN 5 YEARS)

LAWSON V. FORTIS INSURANCE    374
INSURANCE COMPANY DENIES BASED
ON PRE-EXISTING CONDITION

LAWSON V. FORTIS INSURANCE                  375
HELD: SUMMARY JUDGMENT FOR
INSURED AFFIRMED

LAWSON V. FORTIS INSURANCE      376
TREATMENT FOR THE WRONG DISEASE
IS NOT TREATMENT “FOR” THE DISEASE
ULTIMATELY DIAGNOSED

LAWSON V. FORTIS INSURANCE       377
RULE: WHERE THE INSURED SEEKS
TREATMENT BEFORE APPLICATION BUT
IS MISDIAGNOSED, NOT PRE-EXISTING
Insurance Law Spring 2009                               Class Session 5
                                                                page 4

SLIDES                                          NOTES
MOST POLICIES ALSO HAVE A       378
PROVISION PRE-EXISTING INCLUDES
CONDITION FOR WHICH SYMPTOMS
EXIST FOR WHICH A REASONABLE
PERSON WOULD SEEK TREATMENT

DON’T WANT TO ENCOURAGE                   379
PEOPLE TO NOT SEEK TREATMENT
WHEN THEY SHOULD

PROBLEM IS “PRE-EXISTING”      380
DOESN’T MEAN IN HEALTH INSURANCE
WHAT WE USUALLY THINK IT MEANS

Chapter 5 B 1 b ERISA, Coverage Denials
and Changes in Coverage

AETNA HEALTH, INC. V. DAVILA              381
(p. 364)

AETNA HEALTH, INC. V. DAVILA    382
HMO’S DENY TREATMENT DOCTORS
SAY THEY NEED AND, AS A RESULT,
INCUR DAMAGES

AETNA HEALTH, INC. V. DAVILA    383
HMO MEMBERS SUE THE HMO’S FOR
THE DAMAGES INCURRED UNDER
TEXAS STATUTE IMPOSING LIABILITY
FOR MALPRACTICE ON HMO’S

AETNA HEALTH, INC. V. DAVILA   384
HMO’S REMOVE SUIT FROM STATE TO
FEDERAL COURT CLAIMING ERISA
PRE-EMPTS TEXAS STATUTE

AETNA HEALTH, INC. V. DAVILA    385
FEDERAL COURTS REFUSE TO REMAND
SUITS TO STATE COURT AND, WHEN
PLAINTIFFS REFUSE TO AMEND TO CLAIM
UNDER ERISA, DISMISS SUITS
Insurance Law Spring 2009                       Class Session 5
                                                        page 5

SLIDES                                  NOTES
AETNA HEALTH, INC. V. DAVILA      386
COURT OF APPEALS REVERSES

AETNA HEALTH, INC. V. DAVILA      387
IN SUPREME COURT: REVERSED

AETNA HEALTH, INC. V. DAVILA    388
SINCE THE SUIT IS FOR DENIAL OF
BENEFITS, ERISA PRE-EMPTS STATE
LAW CLAIM EVEN THOUGH THE
TEXAS LAW IS ONE REGULATING
INSURANCE

AETNA HEALTH, INC. V. DAVILA   389
ERISA REMEDIAL SCHEME IS SO
“INTERLOCKING, INTERRELATED AND
INTERDEPENDENT” STATE REMEDIES
WILL NOT BE PERMITTED

AETNA HEALTH, INC. V. DAVILA      390
DOING SO WOULD INTERFERE WITH
THE PURPOSE OF ERISA, WHICH IS TO
PROVIDE A NATION-WIDE SCHEME OF
ERISA EXCLUSIVE REMEDIES

AETNA HEALTH, INC. V. DAVILA    391
GOAL OF CONGRESS IN ERISA IS TO
ENCOURAGE EMPLOYERS TO PROVIDE
HEALTH CARE, EVEN IF DEFICIENT

AETNA HEALTH, INC. V. DAVILA     392
CONCURRING OPINION SAYS CONGRESS
NEEDS TO REVISE ERISA OR COURT NEEDS
TO REVISIT ITS EARLIER DECISIONS
BECAUSE ERISA IS OUT OF CONTROL

MCGANN v. H. & H. MUSIC CO.       393
(Pg. 373)

MCGANN v. H. & H. MUSIC CO.   394
EMPLOYEE TELLS EMPLOYER AND INS. CO.
HE HAS AIDS
Insurance Law Spring 2009                               Class Session 5
                                                                page 6

SLIDES                                          NOTES
MCGANN v. H. & H. MUSIC CO.        395
INSURANCE COMPANY CHANGES CAP
FROM $1 MILLION TO $5,000 FOR AIDS

CAN THEY DO THAT?

MCGANN v. H. & H. MUSIC CO.      396
HELD: YES - NO ERISA REQUIREMENT TO
CONTINUE COVERAGE FOR ILLNESS
ALREADY CONTRACTED

BOTTOM LINE: ERISA DOESN’T WORK397
TO BENEFIT EMPLOYEES

Chapter 5 B 2 Cost Containment - Subrogation

ASSOCIATED HOSP. SERV. OF PHIL.           398
v. PUSTILNIK (Pg. 401)

ASSOCIATED v. PUSTILNIK        399
INSURED SETTLES SUIT
BLUE CROSS TYPE PLAN WANTS
SUBROGATION FOR MORE THAN IT PAID

CAN THEY DO THAT?

ASSOCIATED. v. PUSTILNIK           400
HELD: YES. INS. CO. ENTITLED TO FULL
SUBROGATION, EVEN IF INSURED MUST
TAKE LESS THAN FULL PAYMENT
(MINORITY RULE) INS. CO. MUST PAY
PROPORTIONATE SHARE OF RECOVERY
COSTS

ASSOCIATED. v. PUSTILNIK                  401
 OPTIONS
1. INS. CO. GETS PAID FIRST
2. PRO RATA
3. “MAKE WHOLE” RULE
Insurance Law Spring 2009                    Class Session 5
                                                     page 7

SLIDES                               NOTES
ASSOCIATED. v. PUSTILNIK       402
OKLAHOMA ADOPTS “MAKE
WHOLE” RULE -
EQUITY FIRE v. YOUNGBLOOD

RECOVERY COST CALCULATION     403
DETERMINE RATE OF SUBROGATION
TO RECOVERY APPLY RATIO TO
RECOVERY COSTS

Ch 5 C Disability Insurance


MOSSA v. PROVIDENT LIFE AND    404
CASUALTY INSURANCE COMPANY
(Pg. 408)

MOSSA v. PROVIDENT             405
POLICY PROVIDES DISABILITY
PAYMENT WHEN UNABLE TO PERFORM
JOB “REASONABLY BE EXPECTED TO
ENGAGE BECAUSE OF EDUCATION,
TRAINING OR EXPERIENCE”

MOSSA v. PROVIDENT             406
INSURED CAN PERFORM JOBS BUT NOT
AT WHICH HE CAN MAKE AS MUCH
MONEY AS BEFORE

MOSSA v. PROVIDENT            407
MUST THE INSURANCE COMPANY STILL
PAY?

MOSSA v. PROVIDENT             408
HELD: YES “REASONABLY TO BE
EXPECTED” ENTAILS
COMPARABLE INCOME

“OCCUPATIONAL” DISABILITY:     409
USUAL AND CUSTOMARY DUTIES
OF ACTUAL OCCUPATION
(USUALLY FIRST 2 YEARS)
Insurance Law Spring 2009                     Class Session 5
                                                      page 8

SLIDES                                NOTES

“GENERAL” DISABILITY: ANY WORK 410
FOR WHICH HE IS REASONABLY FITTED
BY EDUCATION, TRAINING,
OR EXPERIENCE

MOOTS v. BANKERS LIFE CO.       411
(NOTE 4, Pg. 415)
“CONDUCT” CLAUSE (THAT INSURED IS
NOT DISABLED IF HE WORKS) DOES NOT
BAR COVERAGE IF INSURED IS FORCED
TO TAKE WORK BECAUSE THE INS. CO.
CUTS HIM OFF

HELLER v. THE EQUITABLE LIFE    412
ASSURANCE SOCIETY (pg 415)

HELLER v. EQUITABLE           413
SURGEON GETS CARPAL TUNNEL AND
CAN’T DO SURGERY

HELLER v. EQUITABLE             414
POLICY REQUIRES HE BE
“UNDER REGULAR CARE”
OF A PHYSICIAN

HELLER v. EQUITABLE             415
SURGEON REFUSES SURGERY THE
PHYSICIAN RECOMMENDS

HELLER v. EQUITABLE             416
QUESTION: DOES THIS TAKE HIM OUT OF
“REGULAR CARE OF” PHYSICIAN?

HELLER v. EQUITABLE           417
HELD: NO — “REGULAR CARE AND
ATTENDANCE OF A PHYSICIAN”CLAUSE
DOES NOT REQUIRE INSURED TO
SUBMIT TO RECOMMENDED SURGERY

NOTE: OTHER DISABILITY          418
REQUIREMENTS MAY BE
EVIDENTIARY ONLY

								
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