Challenger - Return Home   A Science Fiction Fanzine   Spring/Summer 2003

The editor of Twink chimes in from real life ...

INSURANCE LAW FOR FUN AND PROFIT

E.B. Frohvet

        I am by profession an insurance claims adjuster. Although my job involves both legal and medical aspects, I have no degree or advanced training in medicine or law. Neither my college (English major) nor my Army (military intelligence) training has much to do with the subject. The sum of my qualifications consists of a ten-week company training course, and four or five months of supervised on-the-job experience in which my decisions were reviewed. After that, save for the occasional class on company policy, I’ve been on my own. My decisions, my notices, go out as the company’s official response to claims. Only rarely are they appealed - I’ll get to that later - and if any of them have given rise to a lawsuit, I’ve never been called to testify.

Decisions cover a surprisingly wide range of subjects, even though I work chiefly on death and disability cases. (Seldom on homeowner’s insurance or car insurance. These are handled chiefly at local offices. I work at a regional claims center, and almost never meet or speak to policyholders.) The guidance for legal aspects can come from general principles, federal, state or local statute as applicable, company policy or regulations, or any combination of these, leavened with individual judgment. I do not make medical decisions as such but I do have to have some basic familiarity in order to read and evaluate medical records on the disability claims. Occasionally on the death claims as well.

In theory, I can bounce a case up to the legal staff or the medical consultant staff to request an advisory opinion from an actual attorney or physician. In practice, this is discouraged except for really difficult problems - my manager and the division manager have to sign off on it, and even if it goes up, chances are I’ll get back an evasive fudged answer that amounts to “Use your own judgment.” I probably have a couple thousand cases pass over my desk in an average year, more than half of those involving final decisions on my own authority. I might refer three or four cases a year for opinions.

The vast majority of cases are routine, of course. Many can be handled in ten minutes. Here’s what the policy says, here are the standard company rules, plug in the facts and the answer comes out. Maybe 75% of the notices I send are form letters, fill-in-the-blanks and send it to be printed out. (It used to be that letters had to be typed, which got me in trouble with the typing pool. I once used the word “analogous,” and the typist complained “There’s no such word.” I showed it to her in the dictionary.)

Certain cases, however, stick in the mind. Let’s consider “Alfred.” (All names have been changed.) He was married to “Bridget” and by all accounts they were a devoted couple, though they never had children. Alfred suffered from a chronic mild depression - what the DSC (Diagnostic and Statistical Manual of Mental Disorders, a staple reference in the field) would call “dysthmia.” He took a mild dose of a standard antidepressant and had never shown any unusual reaction or side effect.

In his mid-50’s, Alfred took an early retirement from his place of work. He and Bridget bought a mobile-camper, a Winnebago type of thing, and spent much of their time seeing the country. On evening they stopped at a campground on the northern California coast. Very early the next morning, Alfred got up and told his wife he was going down to the beach to fish. Bridget thought nothing of it, Alfred went fishing often, it was a favorite hobby of his. Alfred took his fishing gear and his revolver (why he took a handgun to go fishing was never explained) and left the Winnebago.

And was never seen again.

A few hours later Bridget got up, had breakfast, tidied up the camper, and walked down to the beach. Well above the high tide line she found Alfred’s fishing rod, with the holstered revolver lying next to it. His tackle box was never found. According to the local sheriff, the handgun was loaded, with the safety on, no fired rounds, and in his professional judgment (“from the amount of dust in the barrel”) had not been fired in several weeks.

The sheriff further testified that theshore dropped off sharply in that area and the tides could be “tricky” - he knew of two or three instances in the past 20 years in which people had drowned, the bodies had been swept away and recovered some distance away, or not at all.

The commandant of the nearest Coast Guard station agreed with the sheriff: such things were recorded in the station’s files, though he had never encountered such a case personally.

The National Weather Service stated that the weather in the area had been clear and breezy that day and the tides had been “normal” for the time of year.

Bridget acknowledged that Alfred was a very experienced fisherman, he had done surf fishing, or fished in fast moving rivers, many times. Yes, Alfred could swim, he was a good swimmer for a man his age.

The sheriff’s official report concluded: “Missing, possibly drowned.”

A few months later, Bridget filed for Alfred’s insurance; she and her lawyer claimed “death by misadventure,” legalese for “accident.”

Anyone with whom you attempt to do thanatological business - legal business related to or contingent upon death - will immediately ask for a copy of the death certificate. (The funeral home will make certified copies for you. Get at least ten.) In Alfred’s case there was none. The county coroner declined to issue a death certificate and ruled there were “insufficient grounds” to hold a coroner’s inquest.

The death certificate is normal practice, though not carved in stone. The most usual exception is the “common disaster” rule, where people die under circumstances where death is pretty clear but recovering the bodies is not feasible. A typical example could be shipwreck. Legally: a reasonable expectation or presumption of death.

While it is therefore possible to have a legal finding of death without a body, it is exceptional and dependent on circumstances. The unwritten common law rule for presumption of death is “seven years’ unexplained absence.” (Your mileage may vary: under Florida statute, five years.) In short, you can’t just run out and clain death with nothing to show for it.

I denied Bridget’s claim. I ruled that presumption of death was “purely speculative”on the evidence, citing the sheriff’s report of “Missing” and the coroner’s refusal to hold an inquest. Further, I ruled that suicide “while of unsound mind” could not be ruled out in view of Alfred’s history of mental disorder. (Suicide is excluded from almost all life insurance, as is death in combat - except military insurance underwritten by the services - or death in “riot and insurrection.” I’ve seen cases in which death during a riot was ruled murder, and covered; conversely I’ve seen a case in which a man provoked the police into shooting him ruled a suicide.)

There is, as I previously alluded to, an appeals process. A claimant can ask s company review board to reconsider my decision. Bridget and her attorney requested an appeal. I was asked to submit an informal memo as to how confident I was in my ruling. I said it seemed to me “a very clear-cut decision” on the evidence. Bridget’s lawyer submitted a letter from Alfred’s doctor: asked if he thought Alfred likely to commit suicide, the doctor replied, “I wouldn’t have thought so.” Numerous depositions were submitted by friends and relatives concerning what a “normal” and devoted husband Alfred was. Counsel argued that neither suicide nor abandonment was a plausible scenario, and death by accidental drowning was “the only reasonable conclusion.” The appeals board upheld my decision and refused to pay on the policy. I don’t know if a lawsuit was ever filed.

There was another policyholder - we’ll call him Xavier. Xavier was domiciled in Michigan when he died. (“Domicile” is defined as “a true, fixed and permanent residence to which, whenever one is absent, he has the intention to return.” This is relevant because Xavier’s estate will be probated under Michigan law.)

Xavier was formerly married to “Betty” and they had two children, “Charles and Danielle.” Betty and Xavier were divorced some years before he passed on. He died, Betty filed for the insurance. The policy was taken out when Xavier and Betty were still married, and listed Betty (“wife”), Charles and Danielle as beneficiaries. The policy had not been updated or amended after the divorce - a mistake that many make, by the way.

At this point, enter “Yolanda,” who is domiciled in Minnesota. Yolanda is the woman for whom Xavier left Betty. Yolanda also files claim for the insurance, saying she was “married” to Xavier. Yolanda admits there was no license and no ceremony, and that Xavier was still married to Betty at the time; but Yolanda says that she and Xavier “exchanged vows” in a lawyer’s office (in Wisconsin, where neither lived at the time), and this made them “married.” Yolanda further asserts that her daughter “Zoe” is Xavier’s child and is also entitled to a chunk of the insurance money.

The lawyer in Wisconsin, “Fred”, is contacted. Fred agrees that Xavier and Yolanda did consult him, and that there was a “general discussion” about marriage, but heatedly denies that there was any “exchange of vows,” and further states that even had there been, that would not constitute a “marriage” according to Wisconsin law.

The pastor - “George” - of a church in which Zoe was baptized, formally certifies from the records of the church that Xavier represented himself as Yolanda’s “husband” and Zoe’s “father” on the occasion of the christening. Pastor George states that he personally remembers the baptism, at which he officiated, and that Xavier and Yolanda seemed to him a very ordinary couple and he had no reason to doubt they were married.

At this point, Xavier’s sister Naomi gets into the act, deposing that in the months prior to Xavier’s death she discussed this matter with him, and Xavier repeatedly denied that he was ever “married” to Yolanda or was the father of Zoe. Naomi also produces Marie, a neighbor, who swears that she heard with her own ears Xavier make these denials.

Keep in mind the presumption of the validity of the more recent marriage. Keep in mind that this is only a presumption and may be rebutted by “clear and convincing” evidence. Keep in mind that “clear and convincing” is a term that means what a court says it means. Keep in mind that even though there was no license or ceremony, Yolanda may have a claim for “common law” marriage, which is still recognized in some states (Minnesota, but not Wisconsin). Even though a common law marriage would have been invalid at the time it was entered into, because Xavier was still married to Betty, it might have matured into a valid common law marriage once they were divorced. Keep in mind the general principle of putative or “de facto” marriage: a person may have gone through a marriage in good faith, in ignorance of the fact that there was a legal impediment to its validity, and good faith should generally not be punished. However, keep in mind that ignorance of the law is no excuse.

Now consult the marriage and inheritance laws of all three states, the relevant federal rulings (since this is an interstate case it may wind up in federal court); have a cup of coffee, and you tell me: who gets the insurance money?

In this case, I made a Soloman’s Decision, which the legal staff approved and the company accepted. Betty gets nothing, even though she was still listed as a beneficiary - her claim to being a beneficiary was explicitly as “wife” of the insured, and they were divorced. Yolanda gets nothing, she was never “married” to Xavier. Charles, Danielle, and Zoe split the money in equal shares. Zoe gets a cut because Xavier represented himself as her father on an occasion (the baptism) when he should have understood a permanent record would be made. Church records, while not binding on government agencies or private companies, are frequently recognized as highly reliable evidence. Xavier’s recognition of Zoe on that occasion constitutes admission of paternity for purposes of inheritance. Zoe gets a share.

Consider the case of “Henry” and “Irene”, a middle-aged couple who operated a farm in Iowa. They had a son, “Jack”, a major whack job by any standard.

Jack lived alone in his room, leaving it only under two circumstances. He spoke seldom to his mother, rarely to his father, and never to anyone else. Jack did not bathe nor wash his clothes, and wore the same clothes for weeks at a time, until they were literally in filthy rags. Jack could not be persuaded to eat with his parents in the kitchen; whatever Irene cooked, she had to put in a bowl (the very same bowl every time, else he wouldn’t touch it - she lived in constant fear of breaking that bowl) and take it to his room. If this was not done, Jack would sit in his room and starve rather than come into the kitchen for a piece of bread. He could not be persuaded to use the bathroom; when he had to relieve himself, Jack would go outside behind the barn. The only other time Jack would leave the room would be if any person other than his parents was admitted to the house; then (even if it was a relative or family friend he had known since childhood) he would flee outside in panic, wearing whatever clothes he had on, regardless of the weather.

All very sad, you may well say; but what has this got to do with insurance law? Here we arrive at the legal rather than the medical problem. Henry, the father, tried to claim Jack as a “partner” in his farm operation, relevant to getting Jack covered under the farm’s insurance policy.

Partners are two or more people “contractually associated as joint principals in a business”; further, partners are persons who contribute “property, funds, skills, labor, management, or other assets” to the joint operation of an enterprise.

Put on those terms, it seems pretty obvious. Jack had no funds or assets of his own; he contributed no labor or skills to the operation of the farm. I denied the claim. Again, there was an appeal; Henry claimed that he “consulted” Jack on “management decisions.” The review board quoted from my memo in affirming my decision: “not only is there no evidence that petitioner [officially Jack] contributes to the management of the farm operation, by claimant’s [Henry’s] own statement, petitioner is unable to achieve even basic skills of self-care or personal hygiene.”

I felt very sorry for Henry and Irene, but my responsibility to give the claimants a fair decision balances against my responsibility to the stockholders not to give their money away an obviously frivolous claims.

Then there was the dubious case of “Pablo & Pablo”, two total strangers, one in Arizona and one in California; each claimed to be the estranged son and sole beneficiary of the deceased policyholder, “Gustavo”. And each of whom had a birth certificate to prove it. The exact same birth certificate.

It’s well known, of course, that the stealing or forging or otherwise falsely obtaining documents - birth certificates, driver’s licenses, Social Security cards, Immigration & Naturalization Service resident or “green cards” - is a thriving industry. Last number I heard, the certified birth certificate of an Hispanic male citizen born in the U.S. went for $2,000 and up.

Each Pablo claimed to be the “real” Pablo, the son of the deceased, and each denounced the other as an illegal alien fraudulently using his identity. Last I heard of this case it went back to the Flagstaff, Arizona local office for “further development of evidence.” I have a glum feeling that it will wind up back on my desk.

Another favorite was the old fellow who was trying to prove he was age 65 in order to cash in a retirement policy. Of course he had no proof of age - “I was baptized but the church burned down” is a standing joke, I’ve heard it’s also common in the Social Security Administration or other government agencies where proof of age comes into play. This man’s excuse was at least original: of course his birth had been recorded when he was born in Nicaragua, he said, but unfortunately the rebels mortared the courthouse during the revolution, and all the records were destroyed. After a good round of laughs, we found the first Census Record after the claimant arrived in the U.S., and used that.

“Veronica” was another favorite; I saw her file regularly though it seldom required any action. Her late husband had wisely set up his insurance so that it would pay her, not the typical lump sum, but a regular allotment or stipend. From all indications she was a perfectly nice old lady, but a little dotty; any time she had cash in her hand, she would go out and spend it on any frivolous thing that took her fancy, and then not have anything left to pay the electricity bill. So every month we sent her a modest check; and every month she’d send the company a nice little note on flowered paper, telling us about her day. She went down to the check cashing place, where they were always nice to her, and then she went to the market, there was a sale on pork chops, she didn’t usually buy pork chops but they were on sale; and then she bought a doll for her grand-niece …

The general perception is that insurance, like accounting, is boring. Don’t be misled. I bet accountants could tell some interesting tales, too.

 

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