Complex Claims InvestigationsMichael Hoetzel, ALHCLife Claims ManagerFarmers New World Life Insurance CompanyRobert R. PohlsPohls & AssociatesLos Angeles, CaliforniaCraig Williamson, CFE, ALHCSpecial Investigations Unit ManagerFarmers New World Life Insurance CompanyInternational Claim Association – 2012 – Orlando, FL – October 2, 2012
Complex ClaimsInvestigationsInternational Claim Association – 2012 – Orlando, FL – October 2, 20121. Introductions2. Case Studiesa. Contestable Investigationsb. Suicide Investigationsc. Accidental Death Policiesd. Critical Illness Riders3. QuestionsFACTSCENARIOSQUESTIONSAGENDAViewpointReview2
Complex ClaimsInvestigationsInternational Claim Association – 2012 – Orlando, FL – October 2, 2012Approach- Fact gathering from the claim perspectiveJustification- Reach a decision that is supported by contractlanguage and facts specific to a claimDecision- Communicate decisionDefense- Litigation Management with assistance fromin-house and/or outside counselResolution- Pay benefit based on new facts, compromiseresolution or verdictFACTSCENARIOSQUESTIONSAGENDAVIEWPOINTREVIEW3
International Claim Association – 2012 – Orlando, FL – October 2, 2012Purpose To identify what questions to ask that are relevant tothe facts specific to a claim and the underlyingcontract.Goals Provide an environment that enables a fair andconsistent process that supports a good faith effort inrendering a reasonable claims decision.We are here to help and to provide our varied experiences andexpertise within the following scenarios….So here we go!FACTSCENARIOSQUESTIONSAGENDAVIEWPOINTREVIEW4Complex ClaimsInvestigations
International Claim Association – 2012 – Orlando, FL – October 2, 2012CONTESTABLE INVESTIGATIONFact Scenario # 1:31 y.o. female applies for $50K term life policy5’1” and 120 poundsNon-smoker“Clean” applicationConditional receipt given in exchange for first premiumInsured dies less than 12 hours after policy issuedCause of death: congestive heart failureCoroner’s report: 5’4” and 308 poundsFACTSCENARIOSQUESTIONSAGENDAViewpointReview5Complex ClaimsInvestigations
International Claim Association – 2012 – Orlando, FL – October 2, 2012CONTESTABLE INVESTIGATIONFact Scenario #2:46 y.o. male applies for $1M term life policyDenies use of controlled substancesAlcohol use: “Couple of beers socially”Insured is shot and killed during contestability period-Killer was trying to get insured to go to rehabProblem: paramed exam showed elevated liver enzymesFACTSCENARIOSQUESTIONSAGENDAVIEWPOINTREVIEW6Complex ClaimsInvestigations
International Claim Association – 2012 – Orlando, FL – October 2, 2012SUICIDE INVESTIGATIONFact Scenario #128 y.o. female applies for $250K term life policy (5 y.o. son is beneficiary)Dies as result of self-inflicted gunshot wound to chestAlone in boyfriend’s bedSeen with gun earlier in evening (raccoons)Three prior suicide attemptsReportedly jumped in front of a busReportedly tried to overdose on drugsAutopsy report: hesitation marksWitness statements: happy, interacting with family and friends, givinggiftsFACTSCENARIOSQUESTIONSAGENDAViewpointReview7Complex ClaimsInvestigations
International Claim Association – 2012 – Orlando, FL – October 2, 2012SUICIDE INVESTIGATIONFact Scenario # 258 y.o. male applies for $125K term life policyDies less than 2 years later after taking 24 Tramadol pillsPills had been prescribed for his girlfriendAutopsy report: some alcohol in his system at time of deathLimited death benefit for suicide during first two yearsBeneficiary: Insured did not mean to take his own life, Just wantedattention and did not understand proper dose.FACTSCENARIOSQUESTIONSAGENDAViewpointReview8Complex ClaimsInvestigations
International Claim Association – 2012 – Orlando, FL – October 2, 2012SUICIDE INVESTIGATIONFact Scenario # 358 y.o. motivational speaker with severe financial problemsApplies for approximately $18M in life insurance with different companiesReportedly pays a man on the street to kill himAsked him to make it “look like a robbery” so his family could get “whatthey deserve”Killer is convicted of second-degree murderFACTSCENARIOSQUESTIONSAGENDAViewpointReview9Complex ClaimsInvestigations
International Claim Association – 2012 – Orlando, FL – October 2, 2012ACCIDENTAL DEATH INVESTIGATIONFact Scenario # 1$50K AD&D policy covers “[d]eath resulting directly from bodily injuryeffected solely through external, violent and accidental means.”Accident: Not defined.Insured drove car off an embankment and was trapped in 100 degreeheat for 8 hoursDied 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 ofthrombosisFACTSCENARIOSQUESTIONSAGENDAViewpointReview10Complex ClaimsInvestigations
International Claim Association – 2012 – Orlando, FL – October 2, 2012ACCIDENTAL DEATH INVESTIGATIONFact Scenario # 2$250,000 Accidental Death policy issued to 29 y.o. maleInsured dies in motor vehicle accident with BAC: 0.15 (legal limit 0.08)Exclusion: losses caused by “intoxication” as defined by the State wherethe death occurred.Cut off by other car and drove onto dirt medianOvercorrected and ran off roadThrown from car, flipped 3x, landed on top of himWitnesses statement: Insured was in a speed contestFACTSCENARIOSQUESTIONSAGENDAViewpointReview11Complex ClaimsInvestigations
International Claim Association – 2012 – Orlando, FL – October 2, 2012CRITICAL ILLNESS INVESTIGATIONFact Scenario # 135 y.o. special education teacher$250K whole life policy which includes a Critical Illness RiderWithin 1 year of the policy issuance, insured files a CI claim as a result ofbeing diagnosed with breast cancer.Maximum CI benefit available is 150KBased on the documents provided by her physician, the cancer wasdiagnosed 1 year prior to the policy’s Effective Date.Policy ProvisionPreexisting Conditions: A condition for which symptoms existed within two years prior tothe later of the Rider Effective Date or the effective date of any rider reinstatement. If theInsured is Diagnosed with a Covered Condition that we determine to be a PreexistingCondition, no Benefit Amount is payable for the Covered Condition.FACTSCENARIOSQUESTIONSAGENDAViewpointReview12Complex ClaimsInvestigations
International Claim Association – 2012 – Orlando, FL – October 2, 2012CRITICAL ILLNESS INVESTIGATIONFact Scenario # 255 y.o. widowed architect with four children two of which are adopted$1M Universal Whole Life which includes a Critical Illness RiderMaximum CI benefit available is 250KInsured has a heart attack 6 months after the policy’s Effective Date. Theinsured subsequently submits a claim for CI benefits.Policy Provisions30 day Waiting Period after Effective Date wherein first symptoms occurred that lead toDiagnosis.At Claim time it was discovered Heart Attack was diagnosed 40 days after Effective Date ofpolicy, however condition started 10 days prior to diagnosis.FACTSCENARIOSQUESTIONSAGENDAViewpointReview13Complex ClaimsInvestigations
Complex ClaimsInvestigationsInternational Claim Association – 2012 – Orlando, FL – October 2, 2012QUESTIONS?CLAIMSTRATEGIESQUESTIONSAGENDARESCISSIONCHECKLIST14
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