Over the last couple of years numerous class actions have been filed against life insurance companies alleging that the companies should be required to perform searches of the Social Security Death Master File database to ascertain whether death benefits may be due that have not been claimed by beneficiaries.  This has also been the focus of regulatory action by some insurance departments.  In one of the first appellate decisions on this issue, the Ohio Court of Appeals recently upheld a trial court’s decision dismissing the complaint for failure to state a claim upon which relief could be granted.  This decision likely will be quite helpful to insurers litigating this issue in other cases.

In Andrews v. Nationwide Mutual Insurance Company, 2012 Ohio 4935, 2012 Ohio  App. LEXIS 4318 (Ohio Ct. App. Oct. 25, 2012), the plaintiffs brought a putative class action alleging that Nationwide breached the duty of good faith and fair dealing under life insurance policies by failing to take reasonable steps to ascertain whether insureds had died and death benefits were due but unclaimed.  The trial court dismissed the complaint both on the ground that the plaintiffs lacked standing and because the claims alleged were barred by the plain language of the policies.  Id. at *3-6. 

The Ohio Court of Appeals assumed that the plaintiffs had standing and affirmed the dismissal based on the policy language.  One of the policies provided that:

We agree to pay the Death Proceeds to the Beneficiary upon receiving proof that the Insured has died while this Policy is in force and before the Maturity Date.

* * *

[Nationwide] will pay the Death proceeds to the Beneficiary after we receive at our Home Office  proof of death satisfactory to us and such other information as we reasonably require.

Id. at *11-12 (emphasis added by court).  The opinion indicated that this form of policy language was required in Ohio by statute.  Id. at *2-3 n.1.  The court reasoned that “[t]he terms ‘receipt’ and ‘receiving’ demonstrate Nationwide’s passive role in establishing an insured party’s proof of death; they do not connote an obligation to procure such information,” and “[t]hus, a finding obligating Nationwide to solicit or gather information pertaining to an insured’s death would be contrary to the terms contained in the insurance policy.”  Id. at *12-13.  The plaintiffs argued that because death is inevitable, the duty of good faith and fair dealing requires proactive action by a life insurer.  The court of appeals rejected that position , explaining that “[w]hile we understand that the death of an insured party is an inevitable fact, we are not persuaded that such certainty places an additional duty on Nationwide beyond what is expressed in the life insurance contracts, and appellants provide no case law to support such a proposition.”  Id. at *15.  The court further reasoned that “[i]n the absence of legislative or administrative regulatory action, we will not import additional unspoken duties and obligations onto Nationwide that will conflict with the parties’ contracted terms.”  Id. at *16.

In some jurisdictions, a statute or regulation requires a life insurer to conduct searches of the Social Security Death Master File.  But absent such a legislative or regulatory requirement, and where a putative class action attempts to retroactively impose such a requirement before the statute or regulation took effect, this decision should be helpful to insurers in defending against this type of class action litigation.  This decision will be especially helpful where the insurer’s policy language is analogous to the provision quoted above. 

Email this postTweet this postLike this postShare this post on LinkedIn
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.