Until the long-awaited Met Life v. Glenn decision, disability insurance companies were in complete control of the disability claims process, from selecting the doctor who reviews the claim, deciding what tests can and cannot be done to evaluate the claim, even deciding what results should and should not be considered, serving as the judge in the administrative process and even controlling the appeals process. Some have likened it to having one football team choose the referees, decide on what ball to use, and to be able to change the rules during the game. Thankfully, it now appears that such conduct will not be permitted.
The Supreme Court was asked to determine how to consider such conduct, in light of the fact that the insurance company has a financial conflict inherent in its dual role as the entity which decides eligibility and, at the same time, functions as the entity that pays benefits. This “structural” conflict of interest has always existed, but had previously been considered differently by the varying Circuit Courts throughout the country. In New York, previously a claimant was compelled to demonstrate that this conflict “actually influenced” the claim handling.
As a result of Glenn, however, insurers’ conduct will become more heavily scrutinized and the playing field more level, since now claimants will be better able to compel consideration of an insurer’s dual role and the Courts will be forced to take the conflict of interest into account when deciding whether the administrator “abused its discretion” in reaching its claim decision.
As the Court noted, the conflict is but one factor, which in a close case, will help tip the scales in favor of a finding that the insurer has abused its discretion. We look forward to helping shape the Court’s consideration of these types of claims with more meaningful scrutiny.