Canadian insurer faces law suit

by Nicolas Heffernan28 Jan 2015
An American steel company has filed a lawsuit against Sun Life Assurance Company’s Canadian and American divisions and Delaware Life Insurance Company, accusing the companies of a wrongfully denied claim.

Steel of West Virginia (SWVA) provides its employees with healthcare coverage and also purchased stop-loss insurance for expenses that exceed a specified deductible, according to court documents.

Sun Life issued the stop-loss policy for the period of Jan. 1, 2008 through Dec. 31, 2011, according to the suit.

Two of the company’s employees, William Powers and his wife, Jamie Powers, had a son, Drew, who at the age of 3, was diagnosed with advanced Stage IV Neuroblastoma, a rare and aggressive form of childhood cancer.

In accordance with the Sun Life Policy, SWVA denied payment for the treatment expenses that were experimental and/or investigational, according to the suit. Throughout Drew’s course of treatment for cancer, a total of 264 payments were made on behalf of SWVA pursuant to their plan.

SWVA claims from the time Drew Powers was diagnosed in September 2008 until his death on Nov. 26, 2010, he received medical treatment that was entirely unrelated to his cancer and also medical treatment that was related to his cancer, but not experimental nor part of any clinical trial in a total amount of $431,396.10.

A portion of the total, $39,222.27, was incurred prior to the Sun Life policy coverage period, which left the remaining and eligible expenses in the amount of $392,173.83, leaving a total amount of $92,173.83 in excess of SWVA’s $300,000 deductible under the Sun Life policy, according to the suit.

SWVA said on Sept. 28, 2012, the defendants denied its claim, contending that it had not received information necessary to evaluate the claim and on Nov. 20, 2012 and Nov. 27, 2012, the defendants denied the claim in its entirety, based on overly broad, inaccurate and unsupported assumptions that all of the medical treatment received by Powers was experimental, investigational and/or part of a clinical trial.

On Jan. 22, 2013, SWVA’s former counsel appealed Sun Life’s denial and, despite SWVA’s satisfaction of its burden of proof, the defendants reaffirmed its total denial.

On July 8, 2013, in a last good faith attempt to avoid litigation, SWVA’s current counsel appealed the affirmation of the claim denial and on Jan. 17, 2014, the defendants issued a final denial.

SWVA is seeking compensatory and punitive damages with pre- and post-judgment interest.
 

COMMENTS

  • by Saddened Advisor 2015-01-28 10:10:22 AM

    Unbelievable! As a parent myself, I can't imagine not trying to get the best treatment to help save my son, experimental or otherwise. It seems that insurance companies create certain products with a usually steep price, but the strings attached can really make it next to impossible to receive in circomstances such as this. There has to be an ethical component to their decision, in my opinion. Lose of a child and bills that could potentially bankrupt the family as well! There's got to be a better way than this.

  • by Kevin 2015-01-28 10:40:59 AM

    As someone who is involved in a law suit against one of the big insurers in Canada due to a denied claim there is a reason that Personal Injury Lawyers that work on contingency are popping up all over the country. Insurers deny first and hope the person goes away

  • by Diane 2015-01-28 12:01:09 PM

    Shame on you Insurance companies for no paying --the little boy lost his life due to an illness ---the people that make these decision not to pay how can they sleep at night ------SHAME ON YOU and pray it never happens to your family.