What Every State Legislature Can Do to Protect ERISA Disability Policy Holders
ERISA disability policies hide behind an important clause in their long term disability policy in justifying their claims denial, that’s called a “discretionary clause”, a discretionary clause gives all the power to the long term disability carrier to deny your benefits. Courts will defer to the long term disability carriers decision making it very difficult for wrongfully denied long term disability policy holders to win their case.
Many states are now tempting to use their power to regulate the insurance industry by banning discretionary clauses and policies issued in the state. These include states like Washington, California, and Texas.
We in Florida only hope our insurance commissioner wakes up and realizes that the discretionary clause is depriving Floridians of their long term disability benefits wrongfully.
In fact, there is a NAIC Model Act which is being proposed as a uniform standard throughout the United States that would prohibit discretionary clauses.
Nancy Cavey, Tampa Bay long term disability attorney, suggests that you contact the Florida state commissioner and ask that he do the right thing and ban discretionary clauses in disability policies.