ACE American Insurance, Chubb Interest on Delayed Payout Class Action

This class action makes claims for interest on a delayed life insurance payout. The complaint says that ACE American Insurance Company’s policy provides for interest on delayed payouts, but the company has refused to pay it. 

Plaintiff Michael Mayfield is a pilot for Delta Airlines. He had a Group Accident insurance policy, issued by ACE for Delta and administered by Administrative Concepts, Inc. (ACI). ACE has since bought Chubb Corporation and uses Chubb’s name for its combined entity. The policy covered Mayfield and his wife Alison Mayfield for accidental loss of life, among other things.

On April 21, 2016, Alison Mayfield suddenly died from an interaction of medicines which had been prescribed by her doctor. ACI sent out requests for medical records and asked Michael Mayfield for a HIPAA release for additional records. The complaint says that ACI received the last of the medical records it had requested on January 5, 2017.

The policy has the following provision: 

 “Claims Information. Within 15 working days of receipt of proof of loss We will mail Covered Person a letter or notice explaining why a claim or any part has not been paid. Also, the letter or notice will include a list of any information needed to process the claim. When We have received this additional information, We have 15 working days to either pay or deny the claim. We will explain Our decision to the Covered Person. 

 “If We do not meet the all of the above conditions, We will pay the Covered Person 18% interest per year on the benefits due. This applies only to benefits due under the Policy for which the above procedure has not been followed.”

ACI sent some of the medical information to an “independent medical reviewer.” Around February 26, the reviewer sent ACI a two-page report. On March 20, ACI refused Mayfield’s claim, claiming that the level of pain medication in his wife’s system indicated she had taken more than prescribed.

Mayfield disputed the decision. ACI denied his claims again in September. In March 2018, Mayfield’s lawyer made a further appeal. Around May 1, the company decided that the claim was payable.

Around May 4, 2018, Mayfield received a payment for $1,229,250. The complaint counts this as 463 days after January 26, 2017, which would have been the 15thbusiness day after the company received the last medical records requested. According to the complaint, this is the day from which interest at 18% per year should have been paid.

Despite Mayfield’s lawyer’s requests, the company has refused to pay the interest on the claim. 

The class for this action is all persons who (1) made claims under a group accident policy issued by ACE or Chubb as part of an ERISA benefit plan that contained a provision materially identical to the one quoted above; (2) whose claims were not paid within the deadline set forth in the provision; and (3) who were not paid interest on the benefits due and ultimately paid.

Article Type: Lawsuit
Topic: Consumer
Tags: Failure to Pay Interest Due, Incomplete payment of benefits due, Insurance