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Disability Insurers Conflict "Smells Bad" according to Supreme Court

"That Smells Bad" said Justice Scalia as he described disability insurer-MetLife's conflict of interest.

The US Supreme Court heard Oral arguments last week in Glenn v. Metlife. This is an important decision for all disability claims governed by ERISA. The Supreme Court examined how Metlife's inherent conflict of interest-as both the entity which determines eligibility and then must pay those claims-should affect a reviewing court's analysis.

The Justices clearly recognize the problem. Metlife had to determine whether Wanda Glenn was disabled. Metlife helped Wanda Glenn get social security disability. Metlife got repaid most of its money when Wanda Glenn was paid social security disability. Then Metlife decided Wanda Glenn was no longer disabled and cut off her long term disability benefits. The lower Courts determined Metlife's decision was not supported by the evidence and Metlife's inherent conflict of interest was a factor.

The Supreme Court appears poised to issue a landmark decision which will affect how disability insurer's handle and decide long term disability claims. Whether the Court will significantly alter the way the disability insurer's conflict of interest is viewed by the court's remains uncertain.

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