Mansell, Engel & Cole

Manipulating policy language: lawsuit alleges insurer's bad faith

Hartford Life and Accident Insurance Company, Inc., a major arm and subsidiary of the conglomerate commonly referred to in shorthand form as The Hartford, has a commanding national presence.

Including in Oklahoma, where Hartford is a major purveyor of policies -- including life insurance -- to residents across the state.

For that very immediate reason, readers of our blog at the long-tenured and pro-plaintiff insurance law firm of Mansell, Engel & Cole in Oklahoma City might find the following story regarding Hartford's alleged bad faith both notable and interesting. Although it pertains to a class action filing commenced in another state, the details are broadly relevant to insured policyholders across the country.

Here's the bottom line contention in the California filing against Hartford: the company has been interpreting language in select policies in bad faith so that it can drop policyholders it no longer wants to cover.

Specifically, notes the class-action lawsuit, Hartford is purposefully misconstruing state law that considers a resident totally disabled when he or she can no longer perform "substantial and material duties" relevant to an ongoing job.

Under the terms of so-called "waiver of premium" provisions in certain of the life insurance policies Hartford offers to consumers, a disability designation enables an individual with waiver protection to retain coverage even if monthly premiums can no longer be paid.

The current litigation against Hartford alleges that the insurer has been blatantly ignoring the statutory standard on disability and insisting instead that premium wavers will be denied in any instance where a policyholder can do any work at all, even if during only a limited period and at a reduced rate. That guideline effectively makes it impossible for some insureds to retain their coverage.

And that spells both bad faith and breach of contract, the litigation contends.

"Hartford is preying on consumers when they are most vulnerable," says one critic.

The case was first filed in a state court, but is now before a federal tribunal. We will keep readers duly apprised of any material developments that arise.

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