Do life insurers have an obligation to check databases to determine whether their insureds have died?  I recently came across a new class action filing in Stevenson v. Western & Southern Mutual Holding Company, No. CV 11 755966 (Ohio Court of Common Pleas, Cuyahoga County) that makes such a claim. (E-mail me if you would like a copy of the complaint.)  The plaintiff alleges that she is an insured under a life insurance policy and is 79 years old, and therefore her actuarial probability of mortality is purportedly 74%.  She seeks to sue on behalf of a class of policyholders under life insurance policies issued by the defendant, who have an actuarial probability of death of 70% or higher, or alternatively, on behalf of a class of policyholders who have died but no claim has been made for policy proceeds.  She seeks declaratory and injunctive relief ordering the defendants to check the “Death Master File” maintained by the Social Security Administration on an annual basis to determine whether policyholders in the putative class are deceased, and also seeks interest on policy proceeds due to putative class members but not yet paid, and other relief.  She also claims that the failure to conduct research on whether insureds have died is a breach of the implied covenant of good faith and fair dealing. 

I found following paragraph in the complaint a bit humorous: 

Upon death and/or upon the instances of dementia, Class Members themselves become incapable of conveying the fact of death or often even of impending death, to the Defendants. 

Even in litigation, presumably there can be no dispute that a person who has died cannot convey the fact of death to the insurer.  And how can someone really know for sure whether a notice of “impending death” would be accurate?  People with a 70% probability of death might live another 20 or 30 years.  For as long as life insurance policies have existed the task of providing notice of death has necessarily fallen on the beneficiaries.

Some interesting issues I see here are:  

  • How does a policyholder who is still alive and has the capacity to file a lawsuit (and presumably the capacity to inform her beneficiaries of the existence of her life insurance policy) have any standing to bring this kind of suit?  Simply because she would like to help out others who might not be able to inform their beneficiaries of the existence of a policy? 
  • Even if an insurer were deemed to have an obligation to check the Social Security Administration database, what if the database is wrong about whether someone is alive or dead?  The government is not infallible.  How far would an insurer have to go to determine the accuracy of the information?  Would next-of-kin sue for emotional distress if they received a letter from a life insurance company indicating that mom or dad had died when that was not true?  What if the beneficiaries’ contact information is outdated or inaccurate – would an insurer have to try to track them down? 
  • Imagine if this were extended to other kinds of insurance.  Does a homeowners’ insurer have an obligation to check on your house every year to see if you have any damage?  Does an automobile insurer have an obligation to check on your car to see if it has damage?  Should a health insurer be pestering you if you did not go to your physical?  Does a title insurer need to check on whether your neighbor’s garage is encroaching on your property?  The answer to all of these questions seems to be obviously “No,” but why should life insurance be different? 
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Photo of Wystan Ackerman Wystan Ackerman

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you…

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you have something to say.  For those looking for my detailed law firm bio, click here.  If you want a more light-hearted and hopefully more interesting summary, read on:

People often ask about my unusual first name, Wystan.  It’s pronounced WISS-ten.  It’s not Winston.  There is no “n” in the middle.  It comes from my father’s favorite poet, W.H. (Wystan Hugh) Auden.  I’ve grown to like the fact that because my name is unusual people tend to remember it better, even if they don’t pronounce it right (and there is no need for anyone to use my last name because I’m always the only Wystan).

I grew up in Deep River, Connecticut, a small town on the west side of the Connecticut River in the south central part of the state.  I’ve always had strong interests in history, politics and baseball.  My heroes growing up were Abraham Lincoln and Wade Boggs (at that time the third baseman for the Boston Red Sox).  I think it was my early fascination with Lincoln that drove me to practice law.  I went to high school at The Williams School in New London, Connecticut, where I edited the school newspaper, played baseball, and was primarily responsible for the installation of a flag pole near the school entrance (it seemed like every other school had one but until my class raised the money and bought one at my urging, Williams had no flag pole).  As a high school senior, my interest in history and politics led me to score high enough on a test of those subjects to be chosen as one of Connecticut’s two delegates to the U.S. Senate Youth Program, which further solidified my interest in law and government.  One of my mentors at Williams was of the view that there were far too many lawyers and I should find something more useful to do, but if I really had to be a lawyer there was always room for one more.  I eventually decided to be that “one more.”  I went on to Bowdoin College, where I wrote for the Bowdoin Orient and majored in government, but took a lot of math classes because I found college math interesting and challenging.  I then went to Columbia Law School, where I was lucky enough to be selected as one of the minions who spent their time fastidiously cite-checking and Blue booking hundred-plus-page articles in the Columbia Law Review.  I also interned in the chambers of then-Judge Sonia Sotomayor when she was a relatively new judge on the Second Circuit, my only connection to someone who now has one-ninth of the last word on what constitutes the law of our land.  I graduated from Columbia in 2001, then worked at Skadden Arps in Boston before returning to Connecticut and joining Robinson+Cole, one of the largest Connecticut-based law firms.  At the end of 2008, I was elected a partner at Robinson+Cole.

I’ve worked on class actions since the start of my career at Skadden.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and I was fortunate to have the opportunity to work on some prominent class actions arising from the 2004 hurricanes in Florida and later Hurricane Katrina, including cases involving the applicability of the flood exclusion, statutes known as valued policy laws, and various other issues.  My interest and experience in class actions gradually led me to focus on that area.

In Connecticut courts I’ve defended various kinds of class actions that go beyond insurance, including cases involving products liability, securities, financial services and consumer contracts.

My insurance class action practice usually takes me outside of Connecticut.  I’ve had the pleasure of working on cases in various federal and state courts and collaborating with great lawyers across the country.  While class actions are an increasingly large part of my practice, I don’t do exclusively class action work.  The rest of my practice involves litigating insurance coverage cases, often at the appellate level.  That also frequently takes me outside of Connecticut.  A highlight of my career thus far was working on Standard Fire Ins. Co. v. Knowles, the U.S. Supreme Court’s first Class Action Fairness Act case.  I was Counsel of Record for Standard Fire on the cert petition, and had the pleasure of working with Ted Boutrous on the merits briefing and oral argument.

I started this blog because writing is one of my favorite things to do and I enjoy following developments in class action law, writing about them and engaging in discussion with others who have an in interest in this area.  It’s a welcome break from day-to-day practice, keeps me current, broadens my network and results in some new business.

When I’m not at my desk or flying around the country trying to save insurance companies from the plaintiffs’ bar, or attending a conference on class actions or insurance litigation (for more on those, see the Seminars/Programs page of this blog), I often can be found playing or reading with my young daughter, helping my wife with her real estate and mortgage businesses, reading a book about history or politics, or watching the Boston Red Sox (I managed to find bleacher seats for Game 2 of the 2004 World Series when Curt Schilling pitched with the bloody sock).  When the weather is good I also love to take the ferry to Block Island, Rhode Island and ride a bike or walk the trails there. If you go, I highly recommend the Clay Head Trail.