complex claims investigations (2012 ica)

Complex Claims Investigations

Michael Hoetzel, ALHC Life Claims Manager Farmers New World Life Insurance Company Robert R. Pohls Pohls & Associates Los Angeles, California Craig Williamson, CFE, ALHC Special Investigations Unit Manager Farmers New World Life Insurance Company

International Claim Association – 2012 – Orlando, FL – October 2, 2012



1. Introductions 2. Case Studies a. Contestable Investigations b. Suicide Investigations c. Accidental Death Policies d. Critical Illness Riders 3. Questions

FACT SCENARIOS

QUESTIONS

AGENDA

Viewpoint Review

2



Approach- Fact gathering from the claim perspective Justification- Reach a decision that is supported by contract

language and facts specific to a claim Decision- Communicate decision Defense- Litigation Management with assistance from in-house and/or outside counsel Resolution- Pay benefit based on new facts, compromise resolution or verdict

FACT SCENARIOS

QUESTIONS

AGENDA

VIEWPOINT REVIEW

3


Purpose To identify what questions to ask that are relevant to

the facts specific to a claim and the underlying contract.

Goals Provide an environment that enables a fair and consistent process that supports a good faith effort in rendering a reasonable claims decision.

We are here to help and to provide our varied experiences and

expertise within the following scenarios….So here we go!

FACT SCENARIOS

QUESTIONS

AGENDA

VIEWPOINT REVIEW

4



CONTESTABLE INVESTIGATION

Fact Scenario # 1:

31 y.o. female applies for $50K term life policy

5’1” and 120 pounds

Non-smoker

“Clean” application

Conditional receipt given in exchange for first premium

Insured dies less than 12 hours after policy issued

Cause of death: congestive heart failure

Coroner’s report: 5’4” and 308 pounds

FACT SCENARIOS

QUESTIONS

AGENDA

Viewpoint Review

5



CONTESTABLE INVESTIGATION

Fact Scenario #2:

46 y.o. male applies for $1M term life policy

Denies use of controlled substances

Alcohol use: “Couple of beers socially”

Insured is shot and killed during contestability period

-Killer was trying to get insured to go to rehab

Problem: paramed exam showed elevated liver enzymes

FACT SCENARIOS

QUESTIONS

AGENDA

VIEWPOINT REVIEW

6



SUICIDE INVESTIGATION

Fact Scenario #1

28 y.o. female applies for $250K term life policy (5 y.o. son is beneficiary)

Dies as result of self-inflicted gunshot wound to chest

Alone in boyfriend’s bed

Seen with gun earlier in evening (raccoons)

Three prior suicide attempts

Reportedly jumped in front of a bus

Reportedly tried to overdose on drugs

Autopsy report: hesitation marks

Witness statements: happy, interacting with family and friends, giving

gifts

FACT SCENARIOS

QUESTIONS

AGENDA

Viewpoint Review

7




Fact Scenario # 2

58 y.o. male applies for $125K term life policy

Dies less than 2 years later after taking 24 Tramadol pills

Pills had been prescribed for his girlfriend

Autopsy report: some alcohol in his system at time of death

Limited death benefit for suicide during first two years

Beneficiary: Insured did not mean to take his own life, Just wanted

attention and did not understand proper dose.

FACT SCENARIOS

QUESTIONS

AGENDA

Viewpoint Review

8




Fact Scenario # 3

58 y.o. motivational speaker with severe financial problems

Applies for approximately $18M in life insurance with different companies

Reportedly pays a man on the street to kill him

Asked him to make it “look like a robbery” so his family could get “what

they deserve”

Killer is convicted of second-degree murder

FACT SCENARIOS

QUESTIONS

AGENDA

Viewpoint Review

9



ACCIDENTAL DEATH INVESTIGATION

Fact Scenario # 1

$50K AD&D policy covers “[d]eath resulting directly from bodily injury

effected solely through external, violent and accidental means.”

Accident: Not defined.

Insured drove car off an embankment and was trapped in 100 degree

heat for 8 hours

Died three days after rescue (chronic obstructive pulmonary disease,

auricular fibrillation, cerebrovascular event and congestive heart failure)

Doctor’s note: being seated for hours after the accident increased risk of

thrombosis

FACT SCENARIOS

QUESTIONS

AGENDA

Viewpoint Review

10



ACCIDENTAL DEATH INVESTIGATION

Fact Scenario # 2

$250,000 Accidental Death policy issued to 29 y.o. male

Insured dies in motor vehicle accident with BAC: 0.15 (legal limit 0.08)

Exclusion: losses caused by “intoxication” as defined by the State where

the death occurred.

Cut off by other car and drove onto dirt median

Overcorrected and ran off road

Thrown from car, flipped 3x, landed on top of him

Witnesses statement: Insured was in a speed contest

FACT SCENARIOS

QUESTIONS

AGENDA

Viewpoint Review

11



CRITICAL ILLNESS INVESTIGATION

Fact Scenario # 1

35 y.o. special education teacher

$250K whole life policy which includes a Critical Illness Rider

Within 1 year of the policy issuance, insured files a CI claim as a result of

being diagnosed with breast cancer.

Maximum CI benefit available is 150K

Based on the documents provided by her physician, the cancer was

diagnosed 1 year prior to the policy’s Effective Date.

Policy Provision

Preexisting Conditions: A condition for which symptoms existed within two years prior to

the later of the Rider Effective Date or the effective date of any rider reinstatement. If the

Insured is Diagnosed with a Covered Condition that we determine to be a Preexisting

Condition, no Benefit Amount is payable for the Covered Condition.

FACT SCENARIOS

QUESTIONS

AGENDA

Viewpoint Review

12



CRITICAL ILLNESS INVESTIGATION

Fact Scenario # 2

55 y.o. widowed architect with four children two of which are adopted

$1M Universal Whole Life which includes a Critical Illness Rider

Maximum CI benefit available is 250K

Insured has a heart attack 6 months after the policy’s Effective Date. The

insured subsequently submits a claim for CI benefits.

Policy Provisions 30 day Waiting Period after Effective Date wherein first symptoms occurred that lead to

Diagnosis.

At Claim time it was discovered Heart Attack was diagnosed 40 days after Effective Date of

policy, however condition started 10 days prior to diagnosis.

FACT SCENARIOS

QUESTIONS

AGENDA

Viewpoint Review

13




QUESTIONS?

CLAIM STRATEGIES

QUESTIONS

AGENDA

RESCISSION CHECKLIST

14

complex claims investigations (2012 ica)

Economy & Finance