Kantor & Kantor Provides Guidelines on New Consumer Protection Law for California Policyholders
LOS ANGELES, Dec. 1, 2011 /PRNewswire/ -- Kantor & Kantor, LLP announced today that California businesses renewing employer-provided life, health and disability insurance policies can offer their employees added protections in 2012 thanks to a new California law that voids "discretionary clauses" in group insurance contracts.
"This law removes discretion to approve or deny insurance claims from biased insurance companies and instead puts it in the hands of federal judges with the ability and experience to review claims decisions," said Glenn Kantor, a partner in Kantor & Kantor, LLP who assisted in the bill's passage by providing testimony at legislative hearings on the matter.
Imagine the outrage of policyholders who after paying rising insurance premiums discover their insurance won't pay benefits. Imagine their shock, when after surmounting insurers' roadblocks, to find that even suing didn't help. That's because the federal judge's hands were tied. Even if the judge agreed benefits should be paid, he or she had to start off with the assumption that the insurance company was correct, and would only overrule the denial if the policyholder could prove the denial was "arbitrary or capricious."
The new law, California Insurance Code Section 10110.6, sponsored by Sen. Ron Calderon, strongly endorsed by California Insurance Commissioner Dave Jones, and signed by Gov. Jerry Brown in October, corrects that flaw. Starting next year, discretion passes from insurers to judges. Section 10110.6 provides that after January 1, if a group life or disability policy is issued, delivered, or renewed; covers California residents; and contains a provision that reserves discretionary authority to the insurer, that provision would be void and unenforceable.
"Insurers want people to believe the change in the law will cause more lawsuits," said Kantor. "Comparable laws have been passed in more than 20 other states, with no noticeable increase in litigation. In reality, the change will result in less costly litigation. Insurance company bias will not be the subject of expensive discovery disputes and discovery will only involve the credibility of doctors' opinions about an insured's disability."
About Kantor & Kantor, LLP
Kantor & Kantor is one of the largest law firms in the country exclusively representing plaintiffs who have been denied insurance benefits from life, health, disability and long-term care policies. The firm has extensive experience with the complex appeals process and federal court litigation of ERISA matters. The firm continues to fight for clients whose policies may contain discretionary clauses. For more information, log on to www.kantorlaw.net, call (800) 446-7529, or follow the firm at www.californiainsurancelawyerblog.com.
SOURCE Kantor & Kantor, LLP
