New York Insurance Department Circular Letter No. 14 (2007)

On June 27, 2007, the New York Court of Appeals issued a decision in Benesowitz v. Metropolitan Life Insurance Company, 8 NY3d 661 (2007), a case that interprets New York Insurance Law Section 3234(a)(2). The New York Court of Appeals has interpreted this statute to mean that a group or blanket disability policy may impose a waiting period of no longer than 12 months from the insured person's effective date of coverage during which no benefits will be paid for a disability stemming from a pre-existing condition and arising in the waiting period. A policy may not impose an absolute bar to coverage for such a disability.

As a result of the Benesowitz decision, the New York Insurance Department has issued Circular Letter No. 14 to all insurers licensed to write accident and health insurance in New York. As required by the Circular Letter, Mutual of Omaha is automatically re-examining claim denials for disability benefits based upon pre-existing conditions going back two years from the date of the Court of Appeals' decision (June 27, 2007). If a policy provides for a period of time to bring legal action to recover on the policy greater than two years following the time proof of loss is required by the policy, Mutual of Omaha is re-examining all such claim denials based upon pre-existing conditions for such greater period, measured from June 27, 2007.  With the exception of changes to effectuate the Court's decision, normal rules and requirements for claims review will continue to apply, including the requirement for the claimant to furnish adequate proof of loss. Mutual of Omaha will be contacting affected insureds about the results of the claims denial reviews.

Persons who were or are insured under certain group or blanket disability policies may be eligible to have a previously denied claim reviewed by the insurer if the claim was denied based on a prior interpretation of Insurance Law Section 3234 that the Court of Appeals has now rejected. An affected insured person may contact Mutual of Omaha about re-examining such a claim that was previously denied by Mutual of Omaha by writing to the address below. Please include your phone number and address in your correspondence so that we may contact you.

Mutual of Omaha
Attention: Group Disability Claims Appeals Specialist H8
Mutual of Omaha Plaza
Omaha, NE 68175