Disability Insurance Blog

Court Refuses to Permit UNUM to Apply Exclusion to Coverage for Broker Who Lost his License


Thursday, January 5th, 2017

A Federal Court has determined that UNUM was not able to apply an exclusion to coverage, based upon the insured’s loss of his license to perform his occupation. After conducting its claim investigation, UNUM denied the claim, on the basis that the insured, a broker for UBS, had lost his license to practice as a broker, from FINRA, the regulatory agency involved with brokers.

The policy language at issue provided an exclusion to coverage where the loss was “caused solely by the suspension, revocation, or surrender of your professional license to practice in your profession.” The Court, in considering the issues, determined that the policy language was ambiguous, and that the insured’s loss was not solely caused by the loss of his license, but, rather, the insured’s inability to work antedated the loss of his license.

UNUM and its insured agreed that the insured suffered from an impairing health condition (depression and generalized anxiety disorder), but UNUM argued that the loss of his license excluded the payment of benefits to its insured. The Court determined that any ambiguities in the contract would be construed favorably to the insured, and thus, it decided that the loss of his license could not have been the sole cause of his disability.

Thus, the Court ruled that UNUM mistakenly applied the exclusion and that judgement should be entered for the insured.

Ramirez v. UNUM Provident