A Federal Judge in Kentucky has determined that Liberty Life acted in an arbitrary and capricious manner in terminating a Long Term Disability Insurance claim of a branch manager of a bank, who suffered from back and neck pain following an accident. In reaching its decision that Liberty Life wrongfully terminated the claim, the Court took account of Liberty Life’s conflict of interest but decided that Liberty Life’s conduct in seeking surveillance and an examination was not evidence that it was influenced by its financial conflict of interest.
However, the Court did find problematic that Liberty Life gave more emphasis to the opinions of non-treating physicians over those who have examined the claimant. After recognizing that an insurer is not required to adopt the opinions of a treating physician, the Court stated that “Liberty had no apparent reason to credit” its paper reviewing doctor over the objective findings and personal examination of the treating doctor.
In reaching its decision, the Court also was troubled by the failure to consider the co-morbid medical conditions contributing to the claimant’s impairment. The Court found reports relied upon by Liberty Life to be “conclusory and not well reasoned”, and thus not sufficient to constitute substantial evidence to uphold the claim determination to terminate long term disability insurance benefits.
Liberty Life also attempted to provide a “post-hoc” rationalization to support its claim determination. These efforts were rejected by the Court.
The Court determined that a remand to Liberty Life for further consideration of the claimant’s eligibility for further long term disability insurance benefits was the appropriate relief.
Brianard v. Liberty Life Assur. Co.