Many employees (and even attorneys) in Chicago do not know whether state or federal law governs their claim for life insurance benefits. It depends on whether the policy was obtained through your employer and is otherwise not exempted from ERISA (Employee Retirement Income Security Act). Knowing what law governs assists in determining whether other similar cases are authority, or merely guidance. Even when a comparable case is not authority, it may be sufficiently similar for a court to consider its holding persuasive. There can be significant overlap of principles underlying the terms of both ERISA and non-ERISA governed policies, especially if the plan or policy is insured. For example, the principles behind a “proof of death” requirement in a life insurance plan is to prevent fraud and ensure that the insurance company has the opportunity to investigate a claim before it is obligated to pay. A recent case out of the United States Court of Appeals for the Eleventh Circuit illustrates this point.
In Florida Tube Corp. v. MetLife Ins. Co., No. 14-10824, 2015 U.S. App. LEXIS 4208, *1 (11th Cir. Mar. 17, 2015), beneficiaries filed suit after they were denied life insurance proceeds. The life insurance policy required that beneficiaries provide MetLife with “a copy of a certified death certificate; a copy of a certified death decree of a court of competent jurisdiction as to the finding of death; a written statement by a medical doctor who attended to the deceased; or any proof satisfactory to us.”
In this case, the beneficiaries alleged that the insured died in a solo-piloted airplane accident at sea on his way to Puerto Rico where the pilot was “presume deceased” according the a National Transportation and Safety Board report. There was no medical evidence of the insured’s death and there was not any wreckage recovered from the plane. The insured’s son submitted a death certificate with a date of death that indicated the insured’s death had occurred several days before the alleged flight. A second death certificate was issued with the correct day of death for the insured, but had various irregularities and it was later voided. MetLife had denied the claim based on insufficient proof of death. The district court held that the insurer was within its discretion to deny coverage when the beneficiaries gave it circumstantial proof of death that it deemed unsatisfactory and the Eleventh Circuit upheld this decision on appeal. Though this was a non-ERISA case, the Court followed guiding principles for interpreting ERISA policies to arrive at its holding. The phrase “satisfactory to us” triggered the plan administrator’s discretion to determined what was “satisfactory” proof of death and what was not. Here, the plan administrator clearly determined that the proof the insured’s son provided was unsatisfactory.
If you have a complicated life insurance case, where the insurer is requiring specific types of proof of loss that you do not have or do not know how to find—talk to a life insurance attorney about your options for proving your case. An experienced life insurance attorney will also help you understand whether your claim will be governed by federal statute (under ERISA) or by the laws of an individual state (non-ERISA) and how that might influence your strategy for the administrative process and litigation.