Menu

Expect Focus Life Insurance, March 2018

Nonpayment of an Insurance Claim is Not Elder Abuse

Financial Elder Abuse   |   Insurance   |   Life Insurance & Financial Lines   |   March 31, 2018
Download   
Share Page

Does the failure to pay an insurance claim constitute elder abuse? Not under Oregon’s elder financial abuse laws. In January, the Oregon Supreme Court, answering a certified question from the Ninth Circuit, held that "[a]llegations that an insurance company, in bad faith, delayed the processing of claims and refused to pay benefits owed to vulnerable persons under an insurance contract do not state a claim under ORS 124.110(1)(b) for wrongful withholding of money or property." The plaintiffs in Bates v. Bankers Life and Casualty Company accused Bankers of developing onerous procedures that were intended to delay and deny long-term care insurance claims. They argued that the failure to pay insurance claims to which they were entitled violated Oregon’s elder financial abuse laws because the insurance company was retaining money or property that belonged to them.

The payment and administration of insurance claims is not the type of conduct the financial abuse statute was intended to govern. The Oregon Supreme Court applied fundamental tenets of insurance law to determine that neither the long-term care policies, nor plaintiffs’ contractual right to receive benefits under the policies, constitute money or property that was acquired by the insurance company. The money the plaintiffs paid for the insurance (premiums), is "factually and legally" distinct from the insurance benefits themselves which are subject to payment upon the occurrence of certain risk contingencies. Plaintiffs were thus unable to demonstrate a key element of their claim – that Bankers acquired ownership or control of money or property belonging to them.

The federal government, states, territories, and the District of Columbia all have laws designed to protect older adults from financial exploitation. While it does not appear that these laws are patterned on a model act, and they can vary considerably from jurisdiction to jurisdiction, the laws generally address improper use of assets or property belonging to the vulnerable or elderly adult. Consequently, the Bates decision could have far-reaching implications beyond Oregon.

©2018 Carlton Fields Jorden Burt, P.A. Carlton Fields practices law in California through Carlton Fields Jorden Burt, LLP. Carlton Fields publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information and educational purposes only, and should not be relied on as if it were advice about a particular fact situation. The distribution of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship with Carlton Fields. This publication may not be quoted or referred to in any other publication or proceeding without the prior written consent of the firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our Contact Us form via the link below. The views set forth herein are the personal views of the author and do not necessarily reflect those of the firm. This site may contain hypertext links to information created and maintained by other entities. Carlton Fields does not control or guarantee the accuracy or completeness of this outside information, nor is the inclusion of a link to be intended as an endorsement of those outside sites.

Subscribe to Publications

Disclaimer

The information on this website is presented as a service for our clients and Internet users and is not intended to be legal advice, nor should you consider it as such. Although we welcome your inquiries, please keep in mind that merely contacting us will not establish an attorney-client relationship between us. Consequently, you should not convey any confidential information to us until a formal attorney-client relationship has been established. Please remember that electronic correspondence on the internet is not secure and that you should not include sensitive or confidential information in messages. With that in mind, we look forward to hearing from you.