Huang v. Life Ins. Co. of N. Am., No. 14-3401 (8th Cir. 2015)
Annotate this CaseIn 2009, Liu, a physician in a residency program, elected basic life insurance coverage from LINA through his employer’s ERISA plan and elected supplemental coverage in an amount four times his salary. Asked whether, within the last five years he had been diagnosed with “Cancer, Tumor, Leukemia, Hodgkin’s Disease, Polyps or Mole,” he answered “no.” One month after submitting his application, Liu received a cancer diagnosis. On March 1, 2010, the insurance became effective. On April 23, 2010, Liu died. LINA paid the basic benefit of $46,858.49, but reviewed Liu’s medical records, which revealed that Liu had been experiencing symptoms without a diagnosis before submitting his November 12 application. LINA then issued a denial, stating: While the form was completed accurately at the time ... a diagnosis of cancer prior to the coverage approval date was not disclosed … [the] Form states ... any changes in your health prior to the insurance effective date must be reported. His wife responded that Liu was told he would not have to provide evidence of good health, but did not identify the person who made the alleged representation. The court rejected the wife’s suit on summary judgment. The Eighth Circuit affirmed. Liu breached an application requirement by failing to notify LINA of a cancer diagnosis he received before a policy issued.
Court Description: Melloy, Author, with Gruender and Benton, Circuit Judges] Civil case - ERISA. It was reasonable for the plan administrator to find that delivery of the application to plaintiff during the claims process satisfied the plan language as she was the insured's personal representative and the beneficiary of the policy; the express statutory language in Missouri plainly sets forth delivery of the instrument to the beneficiary as an alternative, rather than as an additional duty, and because plaintiff's public-policy/legislative intent argument is contrary to the plain language, it is rejected; with respect to plaintiff's claim that she and the insured let another policy lapse based on defendant's agent's representations, their reliance on the oral representations was not reasonable; the plan application and summary plan description adequately and fairly presented the requirements for supplemental insurance and did not amount to a breach of fiduciary duty; no reasonable jury could find a breach of fiduciary duty based on the appearance of the application.
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