1. 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
2. Complex Claims
Investigations
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
QUESTIONSAGENDA
Viewpoint
Review
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3. Complex Claims
Investigations
International Claim Association – 2012 – Orlando, FL – October 2, 2012
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
QUESTIONSAGENDA
VIEWPOINT
REVIEW
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4. International Claim Association – 2012 – Orlando, FL – October 2, 2012
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
QUESTIONSAGENDA
VIEWPOINT
REVIEW
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Complex Claims
Investigations
5. International Claim Association – 2012 – Orlando, FL – October 2, 2012
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
QUESTIONSAGENDA
Viewpoint
Review
5
Complex Claims
Investigations
6. International Claim Association – 2012 – Orlando, FL – October 2, 2012
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
QUESTIONSAGENDA
VIEWPOINT
REVIEW
6
Complex Claims
Investigations
7. International Claim Association – 2012 – Orlando, FL – October 2, 2012
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
QUESTIONSAGENDA
Viewpoint
Review
7
Complex Claims
Investigations
8. International Claim Association – 2012 – Orlando, FL – October 2, 2012
SUICIDE INVESTIGATION
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
QUESTIONSAGENDA
Viewpoint
Review
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Complex Claims
Investigations
9. International Claim Association – 2012 – Orlando, FL – October 2, 2012
SUICIDE INVESTIGATION
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
QUESTIONSAGENDA
Viewpoint
Review
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Complex Claims
Investigations
10. International Claim Association – 2012 – Orlando, FL – October 2, 2012
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
QUESTIONSAGENDA
Viewpoint
Review
10
Complex Claims
Investigations
11. International Claim Association – 2012 – Orlando, FL – October 2, 2012
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
QUESTIONSAGENDA
Viewpoint
Review
11
Complex Claims
Investigations
12. International Claim Association – 2012 – Orlando, FL – October 2, 2012
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
QUESTIONSAGENDA
Viewpoint
Review
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Complex Claims
Investigations
13. International Claim Association – 2012 – Orlando, FL – October 2, 2012
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
QUESTIONSAGENDA
Viewpoint
Review
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Complex Claims
Investigations