ERISA No Shield to Draft Policy Terms

August 21, 2002 ( - ERISA doesn't prohibit an insurance policy exclusion for drunk-driving accidents even if the exclusion was just in draft form, a judge has ruled.

The ruling, from US District Judge Ronald Buckwalter of the Eastern District of Pennsylvania, came in a lawsuit filed by Daniel Jones, who was left a paraplegic by a May 1999 accident. The plaintiff had filed for coverage under an accidental death or dismemberment policy provided by his employer, Philadelphia investment firm Janney Montgomery Scott.
Police said they detected an odor of alcohol on Jones’ breath at the scene of the accident and that toxicology tests at a hospital showed that Jones had a blood alcohol level of 0.157.

According to a news report from Washington-based legal publisher BNA, Buckwalter’s ruling means Jones isn’t entitled to any money from the insurance policy

Draft Documents OK

The fact that Janney Montgomery Scott didn’t have a finalized copy of the plan documents at the time isn’t a problem, Buckwalter ruled.

Buckwalter agreed that “neither Aetna nor Janney (can) explain why the plan documents took so long to finalize and distribute.”  But the lack of a final plan was not enough to show that Aetna’s decision was biased or faulty, Buckwalter said.

Buckwalter found that in every draft version of the policy Aetna provided to employees of Janney Montgomery Scott, the alcohol exclusion was clearly set out.

“While it is true that [Aetna and Janney] were unable to finalize plan documents until almost two years after the policy’s effective date, a reasonable person could easily conclude from the draft documents that accidents resulting from alcohol consumption would be excluded from coverage,” Buckwalter wrote.

The case is Jones v. Aetna Life Insurance Co.