Noting that the U.S. Supreme Court decision in Metropolitan Life Insurance Co. v. Glenn forced it to consider First Unum’s conflict of interest as both plan administrator and payor of benefits only “as a factor” when determining if there was an abuse in discretion, the appellate court still reversed a lower court decision that Unum did not act arbitrarily and capriciously in denying benefits to John E. McCauley. In its ruling earlier this year, the high court disagreed with lower courts’ use of a heightened standard of review when conflicts of interest exist (See 11th Circuit Backtracks on Benefits Denial Review Standard ).
The appellate court found that the reasons First Unum gave McCauley for denying his claims for benefits were unreasonable and deceptive. McCauley claimed that First Unum indicated to him that his records were reviewed by a medical doctor when in fact they were reviewed by a nurse. Further, the court said, “Even the most cursory comparison with McCauley’s earlier submission by a competent reviewer would have revealed the myriad of details about his condition, absent from the earlier submission, severely affecting his ability to work.”
The appellate court decided First Unum’s conflict of interest influenced it not to follow up on simple inquiries prompted by McCauley’s submission of medical records.
The court also noted previous litigation found First Unum abusive in its benefits decisions and that “First Unum’s unscrupulous tactics have been the subject of news pieces on ’60 Minutes’ and ‘Dateline’.”
The 2 nd Circuit’s opinion is here .