Disability Insurance - Climbing the stairs to Heaven

The client consulted me after her insurance company stopped payments upon receipt of a medical opinion from an internist that stated that the insured was fully able to resume her work as a chiropractor. The client, however, had been diagnosed with chronic fatigue syndrome by her attending physicians, including an internist who performed all the blood tests required for her condition. The client even underwent a neuropsychological assessment that could help in the diagnosis.

I asked my medical acquaintances what kind of medical expert we should approach for an opinion; in the end, the choice was a microbiologist. I received his medical opinion and sent a copy to the insurer with a formal notice to pay, something the insurer omitted, refused or neglected to do. Given non-payment by the insurer, we brought legal action.

The next step was an examination of discovery, something every insured party must undergo when legal action is taken against an insurer involving a claim for disability benefits. The insurer used the opportunity, through its lawyer, to request reams of information and documents by questioning the insured on several points; such an examination can last several hours.

The insurer finally entered a defence; the file was now ready to be tried. The court dates were set but not without difficulty since the availability of medical experts had to be taken into consideration, including that of the microbiologist who could not be away from the operating room on certain dates without endangering patients’ lives.

The insurer, through its lawyer, and not the insured, finally offered to hold an amicable settlement conference before a judge. The advantage to this approach was that it required less waiting time and fewer resources on the part of the insured versus a court action that would have required her to guarantee the presence of medical expert testimony, a challenge given that the availability of an expert is rare, and for her to pay significant fees. This would have been in addition to the stress inherent in going to court where the scales of justice can tip as quickly as the teams switch from one end of the rink to the other end in a Stanley Cup finals hockey game.

The opinion of an actuary, which is of no value in a court case, was vital in this type of dispute resolution. An insurer who is willing to settle will seek to cancel the insurance policy, something that cannot be done in a court case since the policy must be maintained in effect so that payments can be made after the court renders its decision as they were before. In a dispute resolution conference, settling with full knowledge requires knowing the value of the claim in the past, today and in the future, something that falls within the purview of an actuary.

After obtaining the actuary’s opinion, the conference finally went ahead. At the end of the negotiations, which lasted a day, and after the poor client had been subjected to the distress of doubt, hesitation, anger and renunciation, an agreement was finally made: the insurer agreed to pay the insured almost half a million dollars.

The only thing left to settle was the matter of reimbursing the social security benefits paid to the insured while awaiting settlement of her suit. The text of the acquittance between the insurer and the insured was drafted in such a way as to spare the insured having to make any reimbursement.

All is well that ends well!