Appellate Judges Uphold ExxonMobil Insurance Denial

December 12, 2006 ( - Even though the ExxonMobil employee benefits department posthumously signed up a physician for added life insurance coverage, his children are not entitled to a nearly $2 million added payout, an appellate court ruled.

The 1 st  US Circuit Court of Appeals upheld a decision by Senior US District Judge  Ronald Lagueux of the US District Court for the District of Rhode Island that the children of physician Robert Renfro should not get the additional money because two benefits administrators had no authority to retroactively add coverage to Renfro’s account (See Benefits Not Owed for Employee Who Died Before Electing Coverage ).

The appellate panel not only agreed that the ExxonMobil benefits plan never gave the workers authority to add group universal life (GUL) and voluntary death and dismemberment (VADD) components, the 1 st  Circuit judges also accepted Lagueux’s assertion rejecting the children’s argument that the company was at fault for not providing their father with benefit claims forms on a timely basis.  

According to the appellate decision, Renfro was automatically enrolled in the basic life and basic accidental death and dismemberment components of ExxonMobil’s benefits package, but was required to elect and pay the premiums for the GUL and VADD components.

However, Renfro was killed in a fatal car accident on February 26, 2001 – the day ExxonMobil’s benefits department alleged it intended to mail Renfro’s benefit package including the coverage election forms.

The appellate decision said that in April 2001, the benefits department sent to Renfro’s children a letter confirming they were Renfro’s beneficiaries and would receive basic life insurance of $314,000, accidental death and dismemberment benefits of $314, 000, GUL benefits of $785,000, and VADD benefits of $1,256,000. The letter included a disclaimer informing the children that their entitlement to benefits was “subject to verification.”

A month later, the plan’s administrator determined the children were ineligible for GUL and VADD benefits because Renfro had never elected such coverage. The children then filed a lawsuit against ExxonMobil, contending that the denial of their claim for GUL and VADD benefits was arbitrary and capricious.

The full opinion in Green v. ExxonMobil Corp., 1st Cir., No. 06-1452, 12/8/06 is  here .