In assessing life insurance claims, insurers routinely use “independent” or “outside” consultants to substantiate their positions. When litigation arises, discovery into these individuals typically centers on their compensation. Trief & Olk recently had success arguing that beyond plain compensation figures, the number of claims reviewed and subsequent denial statistics were integral in evaluating potential biases.
A familiar concept was articulated in Hogan-Cross v. MetLife, which discussed the appropriate scope of discovery in the wake of MetLife v. Glenn. Specifically addressing the compensation of “persons involved in evaluating, advising upon, or determining plaintiff’s eligibility for continued benefits,” Hogan-Cross noted:
The bases for and amounts of compensation paid to employees and outside consultants involved in plaintiff’s benefit termination itself could prove relevant to plaintiff’s claim. Certainly it could lead to other relevant evidence. It could matter a great deal, for example, if an outside reviewer derived all or most of his or her income from MetLife, particularly if that reviewer frequently recommended denial or termination of benefits.
The significance here cannot be understated, as outside consultants are regularly used to opine on the reasonableness of an administrator’s denial. To that end, Hogan-Cross explained:
Information bearing on the manner in which a conflicted plan administrator compensates outside consultants could be highly pertinent. Maintenance of compensation arrangements that create economic incentives for consultants to recommend denial or termination of benefits would have a material bearing on the likelihood that the administrator’s conflict affects its benefit determinations.
Trief & Olk used this argument in seeking detailed compensation records from “independent” consultants. Beyond simply obtaining hourly rates, we were able to convince the court that the amount of claims reviewed by the consultant, along with their denial statistics, were equally important. Such information is almost uniformly favorable for the plaintiff, and makes for a more compelling case of bias.