An Industry Was Changed and Millions Helped When ERISA Class Action Forced a 50-State Joint Task Force Solution

Rick and his team obtained materials showing that an insurance company was engaged in “budgeting” its claims process. Claims should be handled in the ordinary course and paid or not paid depending upon whether there is coverage and whether the claim has merit. But “budgeting” means the insurer decided, in advance, how much money it wanted to make and how many claims would need to be denied to meet its targets and Wall Street “guidance”.

A class action was filed and vigorously pursued, with CBS’s “60 Minutes” and NBC’s Dateline soon running programs on the case. Rick took on the biggest insurer in its industry segment and defeated a motion to dismiss, obtained evidence preservation, filed a motion for class certification, and gathered evidence and investigated the wrongful conduct.

After the case was consolidated with several other similar cases and the insurer recognized the power of ERISA and the nature of the battle, it turned to the State insurance regulators and crafted a deal to change its practices in various specific ways, to get in compliance with ERISA.

The newly minted claims handling practices became the gold standard for that industry segment. Seminars were given regarding the case, and other insurers in that industry segment modified their behavior in keeping with the results obtained in the class action case. Rick’s clients were all awarded benefits in a settlement, after they had persisted in pursuing remedies for the proposed class members.

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