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Court Finds Sedgwick Claim Determination to be Arbitrary and Capricious

A Federal Judge in New Jersey has determined that a decision to terminate long term disability insurance benefits to a claimant suffering from lupus, rheumatoid arthritis and other conditions was arbitrary and capricious. The Court undertook an analysis that accounted for a number of case specific factors, taking guidance from the United States Supreme Court's holding in Met Life v. Glenn. Sedgwick is a third party administrator who does not insure the benefits, but rather handles claims for employers as the administrator.

The Court noted that Sedgwick's failure to comply with the ERISA regulations requiring appropriate notification of what is necessary to perfect a claim, along with the failure to consider all relevant medical conditions, and the failure to consider the SSDI award were factors weighing in favor of a finding of arbitrary and capricious conduct. The Court also found that Sedgwick's requirements of proof not contained in the policy, along with a changing of claim position without new information further supported a finding of arbitrary and capricious conduct.

On the other hand, the Court did not credit the use of repeat offender paper reviewing physicians as having any weight, noting that their was no evidence of bias presented to support the argument. However, by correctly weighing the totality of circumstances, the Court held that the decision to terminate the claim was improper, and ordered a portion of the back benefits to be paid, while remanding the claim back for further consideration.

Connor v. Sedgwick Claims Management Services

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10.0Justin Corey Frankel 9.8Jason Adam Newfield

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