1st Circ. Death Benefits Ruling Offers Insurers Wide Relief
By Bibeka Shrestha (May 30, 2014, 6:42 PM EDT) -- The First Circuit's recent dismissal of a putative class action blasting John Hancock Life Insurance Co. for not proactively paying death benefits helps life insurers nip in the bud a threatening new source of liability tied to their settlements with states, while presenting setbacks to regulators in future negotiations.
In a published decision, the appeals court threw out plaintiff Richard Feingold's lawsuit claiming that Hancock should have regularly checked the U.S. Social Security Administration's Death Master File database to track the deaths of its policyholders and notify beneficiaries who were owed policy proceeds.
While Hancock resolved similar claims from insurance regulators...
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