HomeMy WebLinkAbout95-04709
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v
I IN THE COURT OF COMMON PLEAS
I CUMBERLAND COUNTY, PENNSYLVANIA
I
I NO. 9.1'- 11/01' 6?~1..A!t'1Jt
I
I
I
I CIVIL ACTION - LAW
STEPHANIE L. STRICKER,
plaintiff
UNUH LIFE INSURANCE COMPANY
OF AMERICA,
Defendant
NOTICB
YOU HAVE BEEN SUED IN COURT. If you wish to defend against
the claims set forth in the following pages, you must take action
within twenty (20) days after this Complaint and Notice are
served, by entering a written appearance personally or by
attorney and filing in writing with the Court your defenses or
objections to the claims set forth against you. You are warned
that, if you fail to do so, the case may proceed without you and
a judgment may be entered against you by the Court without
further notice for any money claimed in the Complaint or for any
other claim or relief requested by the Plaintiff(s). You may
lose money or property or other rights important to you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU
DON'T HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE
OFFICE SET FORTH BELOK TO FIND OUT WHERE YOU CAN GET LEGAL HELP.
COURT ADMINISTRATOR
Fourth Floor
Cumberland County Court House
One Courthouse Square
Carlisle, PA 17013-3387
717 -240-6200
NOTICIA
LE HAN DEMAHDADO A USTED EN LA CORTE. 5i usted quiere
defenderse de estas demandas expuestas en las paginas siguientes,
usted tiene veinte (20) didS de plazo al partir de la fecha de la
demand a y la notificacion. Usted debe presentar una apariencia
escrita 0 en persona 0 por abogado y archivar en la corte en
forma escrita sUs defensas 0 sus objeciones alas demandas en
contra de su persona. Sea avisado que si usted no se defiende,
la corte tomaro medidas y puede entrar una orden contra usted sin
previo aviso 0 notificacion y por cualquier queja 0 alivio que es
pedido en la peticion do demanda. Usted puede perder dinero 0
sus propiedades 0 otros derechos importantes para usted.
and restrictions upon coverage, a copy of which is attached as
"Exhibit A".
4. At all relevant times herein, Plaintiff was an employee
of Pennsylvania Blue Shield and was an insured, eligible for and
entitled to, coverage as a Class 2 beneficiary, under the
aforementioned policy.
5. The relevant portions of the aforesaid policy define
"disability" and "disabled" to mean that, because of injury or
sickness, the insured cannot perform each of the material duties
of her regular occupation.
6. The aforesaid group disability policy provides for
payment of monthly benefits after an elimination period, when the
Defendant receives proof that an insured is disabled due to
sickness or injury and requires the regular attendance of a
physician. The benefit will be paid for the period of disability
if the insured gives the Defendant proof of continued disability
and regular attendance of a physician.
7. The aforesaid group disability policy provides for
payment during the period of disability, after expiration of the
elimination period, of a monthly benefit of the lesser of seventy
(70%) percent of the insured's basic monthly earnings, or the
maximum monthly benefit stated in the policy, specifications.
2
8. The aforesaid group disability policy was in full force
and effect in August, 1993, and at all relevant times thereafter.
9. On or about August, 1993, Plaintiff became unable to
perform all of the material duties of her regular occupation with
Pennsylvania Blue Shield as a result of reflex sympnthetic
dystrophy of her right knee, fibromyalgia of her entire body,
severe back pain, depression and emotional distress.
10. As a result, Plaintiff filed a claim for disability
benefits pursuant to the aforesaid policy with Defendant and
supplied to the Defendant proof of disability ~nd regular
attendance of a physician in accordance with the applicable
policy provisions.
11. Plaintiff did not work in any capacity as a result of
disability caused by the aforementioned medical conditions from
August, 1993 until March 27, 1995.
12. From August, 1993 through March 27, 1995, Plaintiff
provided the Defendant upon request with proof of continued
disability and regular attendance of a physician and otherwise
complied with all other eligibility requirelnents of the aforesaid
group disability policy.
3
13. At the conclusion of the elimination period, the
Defendant began paying to Plaintiff, benefits of One Thousand
Five Hundred Ninety-One ($1,591.00) Dollars per month, pursuant
to the aforesaid policy, which continued monthly through
November 22, 1994.
14. By letter dated November 22, 1994, the Defendant
notified Plaintiff they were unilaterally denying further
liability under the aforesaid policy as to Plaintiff's claim and
terminating benefits as of November 22, 1994.
15. The termination of Plaintiff's disability benefits as of
November 22, 1994 was improper and illegal, inasmuch as Plaintiff
had supplied the Defendant with proof, upon request, that she
continued to be disabled as a result of the aforesaid medical
conditions and continued to require the regular attendance of a
physician.
16. Plaintiff returned to work with Pennsylvania Blue Shield
on March 27, 1995, at a job modified to accom:nodate her physical
restrictions from the same aforementioned medical conditions, on
a part-time basis, with earnings at least twenty (20%) percent
less per month than her pre-disability earnings.
17. "Partial disability" and "partially disabled" are
defined by the aforesaid policy to mean that because of injury or
4
"
sickness the insured, while unable to perform all the material
duties of her regular occupation on a full-time basis, is
performing at least one of the material duties of her regular
occupation or another occupation on a part-time or full-time
basis; and earning at least twenty (20%) percent less per month
than her indexed pre-disability earnings due to the same injury
or sickness.
18. Said group disability policy provides for the payment
of monthly benefits when proof is received that an insured is
partially disabled: during the first twelve (12) months, of
seventy (70%) percent of the insured's basic monthly earnings
without reduction for earnings until the gross monthly benefit
plus the insured's earnings exceed one hundred (100%) percent of
her indexed pre-disability earnings, at which time the monthly
benefit is reduced by that excess amount.
19. since March 27, 1995, Plaintiff has provided Defendant
with timely and regular proof of her partial disability resulting
from the same injuries that caused her original disability and
has repeatedly requested payment of partial disability benefits
due her.
20. The Defendant has not paid Plaintiff any disability or
partial disability benefits pursuant to the aforesaid policy
5
since November 22, 1994, despite Plaintiff's entitlement to
benefits and repeated demands for payment of disability benefits
due.
21. The Defendant is obligated under the aforesaid policy to
pay to Plaintiff: disability benefits from November 22, 1994
until March 27, 1995; and, partial disability benefits from
March 27, 1995 continuing indefinitely.
22. Defendant has acted unreasonably, without just cause,
and unlawfully by refusing payment to Plaintiff of the
aforementioned disability and partial disability benefits due
Plaintiff pursuant to its group disability insurance policy.
23. As a result of the Defendant's aforesaid bad faith and
refusal to pay disability benefits due, Plaintiff is entitled to
interest on the amount of the unpaid disability benefits from
November 22, 1994 in an amount equal to the prime rate of
interest plus three (3%) Percent.
24. As a result of Defendant's aforesaid bad faith and
refusal to pay disability benefits, Plaintiff is entitled to
punitive damages.
25. As a result of Defendant's aforesaid bad faith and
refusal to pay disability benefits, Defendant is required to pay
6
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"
Exhibit A
This policy is divided into sections as follows:
Section POLICY SPECIFICATIONS
Section II DEFINITIONS
,
Section III ELIGIBILITY AND EFFECTIVE DATES
Section IV BENEFITS
Section V TERMINATION PROVISIONS
Section VI GENERAL POLICY PROVISIONS
Section VII PREMIUMS
This polley follows a number-letter sequence. It Is not necessary that
It include all numbers or letters in complete sequence to be correct.
L-IND-l
SECTION " - DEFINITIONS
For the purposes of this policy:
"Active employment" means the employee must be working:
1. for the employer on a full-time basis and paid regular earnings
(temporary or seasonal employees are excluded);
2. at least the minimum numbllr of hours shown in the policy spec-
Ifications; and either
3. at the employer's usual place of business; or
4. at a location to which the employer's business requires the em-
ployee to travel.
"Basic monthly earnlngs"--As defined In the policy specifications.
"Certificate" means a written statement prepared by the Company Including
all riders and supplements, If any, setting forth a summary of:
1. the Insurance benefits to which an employee Is sntltled;
2. to whom the benefits are payable; and
3. limitations or requirements that may apply.
"Disability" or "disabled" - see last page of Section II.
"Disability benefits", when used with the term retirement plan, means money
which:
1. Is payable under a retirement plan due to disability as defined in
that plan; and
2. does not reduce the amount of money which would have been paid
as retirement benefits at the normal retirement age under the plan
if the disability had not occurred. (If the payment does cause
such a reduction, It will be deemed a retirement benefit as defined
In this policy.)
"Eligibility date" means the date an employee becomes eligible for insurance
under this policy. Classes eligible are shown In the policy specifications.
"Elimination period" means a period of consecutive days of disability for
which no benefit Is payable. The elimination period Is shown In the policy
specifications and begins on the first day of disability.
For Class 1 and 2
Note: If disability stops during the elimination period for any 7 (or
less) days, then the dlsab:llty will be treated as continuous. But days
that the Insured Is not disabled will not count toward the elimination
period.
L-DEF-1 (711/91)
SECTION II - DEFINITIONS (continued)
.
For Class 3
Note: If disability stops during the elimination period for any 14 (or
less) days, then the disability will be treated as continuous. But days
thllt the Insured Is not disabled will not count toward the elimination
period.
"Employee" means a person In active employment with the employer.
"Employer" means the policyholder and Includes any division, any subsidiary
or any affiliated company named In the policy specifications.
"Evidence of Insurability" means a statement or proof of an employee's
medical history upon which acceptance for Insurance will be determined by
the Company.
"Grace psrlod" Is the 31 days following a premium due date during which
premium payment may be made.
"Gross monthly benefit" means the Insured's benefit amount before any re-
duction for other Incoms benefits and earnings.
"Home office" means the UNUM Life Insurance Company of America, 2211
Congress Street, Portland, Maine 04122.
"Indexed pre-disability earnings" means the Insured's basic monthly earnings
In effect just prior to the date his disability began adjustsd on the first
anniversary of benefit payments and each following anniversary. Each ad-
justmsnt will be based on the lesser of 10% or the current annual percentage
Increase In the Consumer Price Index.
Note: The Consumer Price Index (CPI-W) Is published by the U. S. De-
partment of Labor. The Company reserves the right to use some other si-
milar measuremsnt If the Department of Labor changes or stops publishing
the CPI-W.
"Injury" means bodily Injury resulting directly from an accident and Inde-
pendently of all other causes. The Injury must occur and disability must
begin while tha employee Is Insured under this policy.
"Insured" msans an employee Insured under this policy.
"Male pronoun" whenever used Includes the female.
"Monthly Benefit" means the amount payable by the Company to the disabled
Insured.
"Partial disability" or "partially disabled" - see last page of Section II.
L-DEF-2 (7/1/91)
-...,.....
-\.
SECTION II - DEFINITIONS (continued)
"Physician" means a person who Is:
1. operating within the scope of his license; and either
2. licensed to practice medicine and prescribe and administer drugs
or to perform surgery; or
3. legally qualified as a medical practitioner and required to be re-
cognized, under this policy for Insurance purposes, according to
the Insurance statutes or the insurance regulations of the gov-
erning jurisdiction.
It will not Include an employee or his spouse, daughter, son, father,
mother, sister or brothsr.
"Policy Specifications" Is the document showing the eligible classes, the
amounts of Insurance and other relevant Information pertaining to the plan
of Insurance applied for by the policyholder. This document, designated
Section I, Is attached to and Is part of this policy.
i'
"Retirement benefits", when used with ths term retirement plan, means mo-
ney which:
1. Is payable under a retirement plan either In a lump sum or In the
form of periodic payments;
2. does not represent contributions made by an employee; and
Note: payments which represent employee contributions are
deemed to be received over the employee's expected remaining
life regardless of when such payments are actually received.
3. Is payable upon:
a. early or normal retirement; or
b. disability If the payment does reduce the amount of
money which would have been paid at the normal re-
tirement age under the plan If the disability had not
occurred.
"Retirement plan" means a plan which provides retirement benefits to em-
ployees and which Is not funded wholly by employee contributions. The term
shall not Include a profit-sharing plan, a thrift plan, an Individual retire-
ment account (IRA), a tax sheltered annuity (TSA), a stock ownership plan,
or a non-qualified plan of deferred compensation.
"Sickness" means Illness or disease. It will Include pregnancy unless ex-
cluded In the General Exclusions section of this polley. The disability must
begin while the employee Is Insured under this polley.
"Waiting period," as shown In the polley specifications, means the continuous
length of time an employee must serve In an eligible class to reach his el-
Igibility date.
L-DEF-3 (7/1/91)
SECTION III - ELIGIBILITY AND EFFECTIVE DATES
A. EL.IGIBL-E CLASSES
The classes eligible for Insurance are shown In the policy specifications.
B. ELIGIBILITY DATE
An employee in an eligible class will be eligible for insurance on the later
of:
1. the policy effective date; or
2. the day after the employee completes the waiting period.
If a former employee Is rehired within one year of the date his employment
terminated, his previous service In an eligible class will apply toward the
waiting period to determine that employee's eligibility date.
C. EFFECTIVE DATES OF INSURANCE
1. Insurance will be effective at 12:01 a.m. on the day determined as fol-
lows, but only If the employee's written application for insurance Is:
a. made with the Company through his employer; and
b. on a form satisfactory to the Company.
2. An employee will be Insured for noncontributory insurance on his eligi-
bility date.
3. An employee will be insured for contributory Insurance on the latest of
these dates:
a. the employee's eligibility date, If he has made written application for
Insurance on or before this date.
b. the date the employee makes written application for insurance, If he
does it on or before the 31st day aftsr his eligibility date.
c. the later of the following dates If the employee makes written appli-
cation for Insurance more than 31 days after his eligibility date: *
I. 6 months following the date the employee makes written applica-
tion for Insurance; or
II. the date the Company gives Its approval.
d. the"date the Company gives Its approval, If the employee terminated
his Insurance while continuing to be eligible. ,
In the case of c. and d. above, the employee must submit an appli-
cation and evidence of Insurability to the Company for approval.
This will be at the employee's expense.
4. Delayed Effective Date for Insurance - The effective date of any Initial,
Increased or additional insurance will be delayed for an employee If he
Is not In active employment because of a disability. The Initial, Increased
or additional insurance will start on the date that employee returns to
active employment.
* Special
L-EFF-1 (1/1/91)
SECTION IV . BENEFITS
DISABILITY'
When the Company receives proof that an Insured Is disabled due to sickness or
Injury and requires the regular attendance of a physician. the Company will pay
the Insured a monthly benefit after ths end of the elimination period. The benefit
will be paid for the period of disability if the insured gives to the Company proof
of continued:
1. disability; and
2. regular attendance of a physician.
The proof must be given upon request and at the insured's expense.
The monthly benefit will not:
1. exceed the Insured's amount of insurance; nor
2. be paid for longer than the maximum benefit period.
The amount of Insurancs and the maximum benefit period are shown In the policy
specifications.
PARTIAL DISABiliTY
When proof Is received that an Insured Is partially disabled within 31 days of the
end of a period during which he received disability benefits, the Company will
pay a monthly benefit. The partial disability must result from the Injury or
sickness that caused the disability.
MONTHLY BENEFIT
Class 1 and 2
To figure the amount of monthly benefit:
1. Take the lesser of:
a. 70% of the Insured's basic monthly earnings; or
b. the amount of the maximum monthly benefit shown In the policy specifi-
cations; and
2. Deduct other Incoms benefits, shown below, from this amount.
Class 3
To figure the amount of monthly benefit:
1. Take the lesser of:
a. 50% of the Insured's basic monthly earnings; or
b. the amount of the maximum monthly benefit shown In the policy specifi-
cations; and
2. Deduct other Income benefits, shown below, from this amount.
L-BEN-1 (711191)
SECTION IV . BENEFITS (continued)
But. If the insured Is earning more than 20% of his Indexed pre-disability earnings
In his regular occupation or another occupation. then the monthly benefit will
be figu red as follows:
1. During the first 12 months. the monthly benefit will not be reduced by any
earnings until the gross monthly benefit plus the Insured's earnings exceed
100% of his Indexed pre-disability earnings. The monthly benefit will then
be reduced by that excess amount.
2. After 12 months. the following formula will be used to figure the monthly
benefit.
(A divided by B) x C
A = The Insured's "Indexed pre-disability earnings" minus the Insured's
monthly earnings received ,while he Is disabled.
B = The insured's "Indexed pre-disability earnings".
C = The benefit as figured above, but not Including adjustments under the
Cost of Living Adjustment provision.
The benefit payable will never be less than the minimum monthly benefit shown
In the policy specifications.
Proof of the Insured's monthly earnings must be given to the Company on a
quarterly basis. Benefit payments will be adjusted upon receipt of this proof
of earnings.
OTHER INCOME BENEFITS
Other Income benefits means those benefits as follows.
1. The amount for which the Insured is eligible under:
a. Workers' or Workmen's Compensation Law;
b. occupational disease law; or
c. any other act or law of like Intent.
2. The amount of any disability income benefits for which the insured Is eligible
under any compulsory benefit act or law. This Includes, the amount the in-
sured receives under the Pennsylvania Motor Vehicle Financial Responsibility
Law.
3. The amount of any disability Income benefits for which the Insured Is eligible
under:
a. any other group insurance plan;
b. any governmental retirement system as a result of his job with the em-
ployer.
4. The amount of disability benefits and/or retirement benefits received by the
Insured under the ~mployer's retirement plan.
L-BEN-2
SECTION IV - BENEFITS (continued)
As 'used here, "received" does not Include any amount ~olled over or
transferred to any eligible retirement plan as that term Is defined In
Section 402 of the Internal Revenue Code and any future amendments
which affect the definition of an eligible retirement plan.
5. The amount of disability or retirement benefits under the United States Social
Security Act, The Canada Pension Plan. or The Quebec Pension Plan, or any
similar plan or act, as follows:
a. disability benefits for which:
I. the insured Is eligible; and
Ii. his spouse, child or children are eligible because of his disability;
or
b. retirement benefits received by:
I. the Insured; and
II. his spouse, child or children because of his receipt of the retirement
benefits .
These other Income benefits, except retirement benefits, must be payable as a
result of the same disability for which this policy pays a benefit.
Item 5. b. will not apply to disabilities which begin after age 70 for those Insureds
already receiving Social Security retirement benefits while continuing to work
beyond age 70.
Benefits under Item 5.a above will be estimated If such benefits:
,. have not been awarded; and
2. have not been denied; or
3. have been denied and the denial Is being appealed.
The monthly benefit will be reduced by the estimated amount. But, these benefits
will not be estimated provided that the Insured:
,. applies for benefits under item 5.a; and
2. requests and signs the Company's Agreement Concerning Benefits.
This agreement states that the Insured promises to repay the Company any ov-
erpayment caused by an award received under Item 5.a.
L-BEN-3
SECTION IV - BENEFITS lcontinued)
If benefits have been estimated, the monthly benefit will be adjusted when the
Company receives proof:
1. of the amount awarded; or
2. that benefits have been denied and the denial 15 not being appealed.
In the case of 2. above, a lump sum refund of the estimated amounts will be made.
"Law," "plan," or "act" means the Initial enactment and all amendments.
COST OF LIVING FREEZE
After the first deduction for each of the other income benefits, the monthly be-
nefit will not be further reduced due to any cost of living Increases payable under
these other Income benefits.
LUMP SUM PAYMENTS
Other income benefits which are paid In a lump sum will be prorated on a monthly.
basis over the time period for which the sum Is given. If no time period Is stated,
the sum will be prorated on a monthly basis over the insured's sxpected lifetime
as determined by ths Company.
TERMINATION OF DISABILITY BENEFITS
Disability benefits will cease on the earliest of:
1. the date the insured Is no longer disabled;
2. the date tho Insured dies;
3. the end of the maximum benefit period;
4. the date the Insured's current earnings exceed 80% of his Indexed pre-disa-
bility earnings.
RECURRENT DISABILITY
"Recurrent disability" means a disability which is related to or due to the same
cause(s) of a prior disability for which a monthly benefit was payable.
A recurrent disability will be treated as part of the prior disability if, after re-
ceiving disability benefits under this polley, an Insured:
1. returns to his regular occupation on a full-time basis for less than six
months; and
2. performs all the material duties of his occupation.
Benofit payments will be subject to the terms of this policy for the prior disa-
bility.
L-BEN-4
SE-:TION IV - SENEFITS Icontinued)
If an Insured'returns to his regular occupation on a full-time basis' for six months
or more, a recurrent disability will be treated as a new period of disability.
The insured must complete another elimination period,
In order to Pl'event overinsurance because of duplication of benefits, benefits
paYllble under this Recurrent Disability provision will cease if benefits are payable
to the Insured under any other group long tsrm disability policy.
SURVIVOR BENEFIT
The Company will pay a benefit to the eligible survivor when proof is received
that an Insured died:
I, after disability had continued for 180 or more consecutive days; and
2. while receiving a monthly benefit.
The benefit will be an amount equal to three times the Insured's gross monthly
benefit,
If payment becomes due to the Insured's children, payment will be made to:
I, the children; or
2. a person named by the Company to receive payments on the children's behalf.
This payment will be valid and effective against all claims by others repres-
enting or claiming to represent the children.
"Eligible survivor" means the insured's spouse, If living,. otherwise the Insured's
children under age 25. But, If there are no eligible survivors, payment will be
made to the Insured's estate.
GENERAL EXCLUSIONS
This policy does not cover any disability due to:
1. war, declared or undeclared, or any act of war;
2, Intentionally self-Inflicted InJuries;
3, active participation In a riot.
PRE-EXISTING CONDITION EXCLUSION
This policy will not cover any disability:
1. caused by, contributed to by, or resulting from a pre-existing condition;
and
2. which begins In ths first 12 months after an Insured's effective date,
A "pre-existing condition" means a sickness or injury for which the Insured re-
ceived medical treatment, consultation, care or services Including diagnostic
measures, or had taken prescribed drugs or medicines In the three months prior
to the Insured's effective date,
MENTAL ILLNESS, ALCOHOLISM, AND DRUG ABUSE LIMITATION *
L-BEN-5 (111/94)
SECTION IV - BENEFITS (continued)
Benefits for disability due to mental illness. alcoholism or drug abuse will not
exceed 12 months of monthly benefit payments unless the insured meets one of
these situations.
1. The insured Is in a hospital or Institution at the end of the 12-month period.
The monthly benefit will be paid during the confinement.
If the Insured Is stili disabled when he is discharged, the monthly benefit
will be paid for a recovery period of up to 90 days.
If the insured becomes reconflned during the recovery period for at least
14 days in a row, benefits will be paid for the confinement and another re-
covery period up to 90 more days.
2. The insured continues to be disabled and becomes confined:
a. after the 12-month period; and
b. for at least 14 days In a row.
The monthly benefit will be payable during the confinement.
The monthly benefit will not be payable beyond the maximum benefit period.
"Hospital" or "Institution" means facilities IIcsnsed to provide care and treatment
for the condition causing the Insured's disability.
"Mental Illness" means mental, nervous or emotional diseases or disorders of any
type without demonstrable organic origin.
CLASS 1
COST OF LIVING ADJUSTMENT
Elialbllltv
An Insured will be eligible for cost of living adjustments on the first anniversary
of benefit payments and each following anniversary. Adjustments may be made
as long as the insured is receiving benefits.
Adlustment Amount
The Insured's net monthly benefit will be increased by 3%.
Each adjustment will be added to the Insured's net monthly benefit and will be
paid monthly.
Maximum Monthlv Benefit
Cost of living adjustment Increases are not subject to the maximum monthly ben-
efit.
* Special
L. BEN-6 (1/1/94)
SECTION IV - BENEFITS (continued)
Net Monthlv Benefit
The net monthly benefit means the amount determined by reducing the Insured's
amount of Insurance by other Income benefits and any reductions for earnings.
The net monthly benefit will be determined each month. For the purpose of
calculating adjustments, the net monthly benefit will Include any prior cost of
living adJustments.
CONTINUITY OF COVERAGE UPON TRANSFER OF INSURANCE CARRIERS
I n order to prevent loss of coverage for an employee because of a transfer of
insurance carriers, this policy will provide coverage for certain employees as
follows.
Failure to be In Active EmDlovment Due to Inlurv or Sickness
This policy will cover, subject to premium payments, employees:
1. insured with the prior carrier at the time of transfer; and
2. who are not In active employment due to injury or sickness.
The benefit payable will be that which would have been paid by the prior carrier
had coverage rem~lned In force, less any benefit for which the prior carrier Is
liable.
Dlsabllltv due to a Pre-exlstlna Condition
Benefits may be payable for a disability dus to a pre-existing condition for an
employee who:
1. was Insured by the prior carrier at the time of transfer; and
2. was In active employment and insured under this policy on Its effective date.
The benefit will be determined according to this pollcy's benefit schedule If the
employee satisfies the pre-existing condition exclusion under:
1. this policy; or
2. the prior carrier's policy, giving consideration towards continuous time In-
sured under both policies.
No benefit will be paid If the employee cannot satisfy the pre-existing condition
exclusion of 1. or 2. above.
L-BEN-7
SECTION V - TERMINATION PROVISIONS
A. TERMINATION OF EMPLOYEE'S INSURANCE
An employee will cease to be Insured on the earliest of the following dates:
1. the date this policy terminates;
2. the date the employee is no longer in an eligible class;
3. the date the employee's class Is no longer Included for Insurance;
4. the last day for which any required employee contribution has been made;
5. the date employment terminates. Cessation of active employment will be
deemed termination of employment, except:
a. the Insurance will be continued for a disabled employee during:
I. the elimination period; and
II. while benefits are being paid.
b. the employer may continue the employee's Insurancs by paying the
required premiums, subject to the following:
I. Insurance may be continued for the time shown In the policy
specifications for an employee:
a) temporarily laid off; or
b) given leava of absence.
-,
II. The employer must act so as not to discriminate unfairly among
employees In similar situations.
B. TERMINATION OF POLICY
1. Termination of this policy under any conditions will not prejudice any
payable claim which occurs while this policy is In force.
2. If the policyholder fails to pay any premium within the grace period, this
policy will automatically terminate at 12:00 midnight of the last day of the
grace period. The policyholder may terminate this policy by advance
written notice delivered to the Company at least 31 days prior to the
termination date. But, this policy wlil not terminate ,during any period
for which premium has been paid. The pollcyholdsr will be liable to the
Company for all premiums due and unpaid for the full period for which
this policy Is In force.
3. The Company may terminate this policy on any premium due da~e by
giving written notice to the policyholder at least 31 days In advance If:
a. the number of employees Insured Is less than 10; or
b. less than 100% of the employees eligible for any noncontributory In-
surance are Insured for It; or
c. less than 75% of the employees eligible for any contributory Insurance
are Insured for It; or
L-TERM-l
SECTION VI - GENERAL POLICY PROVISIONS
A. sf A TEMENTS
In the absence of fraud, all statements made in any application are considered
representations and not warranties (absolute guarantees). No reprssentatlon
by:
I. the policyholder in applying for this policy will make It void unless the
I'epresentatlon Is contained in the application; or
2. any employee In applying for Insurance under this policy will be used
to reduce or deny a claim unless a copy of the application for Insurance
Is or has been given to the employee.
B. COMPLETE CONTRACT - POLICY CHANGES
1. This policy Is the complete contract. It consists of:
a. all of the pages;
b. the policy specifications;
c. the attached application of the policyholder.
2. This policy may be changed In whole or In part. Only an officer or a
registrar of the Company can approve a change. The approval must be
In writing and endorsed on or attached to this polley.
3. Any other person, Including an agent, may not change this polley or
waive any part of It.
C. EMPLOYEE'S CERTIFICATE
The Company will provide a certificate to the policyholder for delivery to each
Insured. If the terms of a certificate and this policy differ, this polley will
govern.
D. FURNISHING OF INFORMATION - ACCESS TO RECORDS
1. The employer will furnish at regular Intervals to the Company:
a. Information relative to employees:
I. who qualify to become Insured;
II. whose amounts of Insurance change; and/or
III. whose Insurance terminates.
b. any other Information about this policy that may be reasonably re-
quired.
The employer's records which, in the opinion of the Company, have a
bearing on the Insurance will be opened for Inspection by the Company
at any reasonable time.
2. Clerical error or omission will not:
a. deprive an employee of insurance;
b. affect an employee's amount of insurance; or
L-G PP-I
SECTION VI - GENERAL POLICY PROVISIONS
c. . effect or continue an employee's Insurance which otherwise would not
be In force.
E. MISSTATEMENT OF FACTS
If relevant facts about any employee were not accurate:
1. a fair adjustment of premium will be made; and
2. the true facts will decide if and In what amount insurance Is valid under
this polley.
F. NOTICE AND PROOF OF CLAIM
1. Notice
a. Written notice of claim must be given to the Company within 30 daya
of the date disability starts, If that Is possible. If that Is not pos-
sible, the Company must be notified as soon as it Is reasonably
possible to do so.
b. When the Company has the written notice of claim, the Company will
send the Insured Its claim forms. If the forms are not received within
15 days after written notice of claim Is sent, the Insured can send
the Company written proof of claim without waiting for the form.
2. Proof
a. Proof of claim must be given to the Company. This must be done
no later than 90 days after the end of ths elimination period.
b. If It Is not possible to give proof within these time limits, It must
bs given as soon as reasonably possible. But proof of claim may not
be given later than one year after the time proof Is otherwise re-
quired.
c. Proof of continued disability and regular attendance of a physician
must be given to the Company within 30 days of the request for the
proof.
d. The proof must cover:
I. the date disability started:
II. the cause of disability; and
III. how serious the disability Is.
G. EXAMINATION
The Company, at its own expense, will have the right and opportunity to
have an employee, whose Injury or sickness Is the basis of a claim, examined
by a physician or vocatlonnl expert of Its choice. This right may be used
as often as reasonably required.
H. LEGAL PROCEEDINGS
L-GPP-2
SECTION VII - PREMIUMS
A. PI\EMIUM RATES
The Initial premium is determined on the basis of the rates shown in the polley
specifications.
The Company may establish new rates for the computation of all future pre-
miums as well as the one then due:
1. when the terms of this policy are changed;
2. when a division, subsidiary, or affiliated company is added to this policy;
or
3. for reasons other than 1. and 2. above, such as, but not limited to a
change In factors bearing on the risk assumed. But, the rates may not
be changed within the first 12 months following the policy effective date.
No premium may be Increased unless the Company notifies the employer at
least 31 days in advance of the Increase. Premium increases may take effect
on an earlier date when both the Company and the employer agree.
B. PAYMENT OF PREMIUMS
1. Premium payment calculations:
a. will be based on the coverage provided under this polley; and
b. are determined by the covered payroll as shown In the policy spec-
iflcatlons.
2. All premiums due under this polley, Including adjustments, If any, are
payable by the employer on or before their respective due dates at the
Company's home office. The due dates are specified on the first page
of this policy.
3. Premiums payable to the Company will be paid in United States dollars.
4. If premiums are payable on a monthly basis, premiums for additional or
Increased Insurance becoming effective during a policy month will be
charged from the next premium due date.
5. The premium charge for Insurance terminated during a polley month will
cease at the end of the policy month In which such Insurance terminates.
This manner of charging premium Is for accounting purposes only and
will not extend insurance coverage beyond a date It would have otherwise
terminated as shown in the "Termination of Employee's Insurance" section
of this policy.
6. If premiums are payable on other than a monthly basis, premiums for
additional, Increased, reduced or terminated insurance will cause a pro
rata adjustment on the next premium due date.
7. Except for fraud, premium adjustments, refunds or charges will be made
for only:
a. the current policy year; and
b. the prior policy year.
L-PREM-1