In Griffin v. Hartford Life & Acc. Ins. Co., 898 F.3d 371 (4th Cir. 2018)
, the Fourth Circuit addressed the issue of whether a related company of an entity that enjoyed the abuse of discretion standard also was entitled to the same deference.
The plaintiff's claim, which is somewhat novel, is that while Hartford Life & Accident Insurance Company retained discretionary authority, and, therefore, a discretionary standard of review of the plaintiff's benefit determination, the adjusters who decided the claim were paid by a subsidiary of the Hartford group of companies--namely, Hartford Fire Insurance Company. The plaintiff reasoned that because Hartford Fire was a separate entity from Hartford Life, the abuse of discretion standard did not apply. The district court and the Fourth Circuit ruled against the plaintiff on this point, and upheld the claim denial. The Fourth Circuit relied on undisputed evidence that the correspondence with plaintiff concerning his claim denial was on Hartford Life letterhead, and, more importantly, Hartford Fire paid all employees of the Hartford's subsidiaries and affiliate companies. Accordingly, the fact the employees of Hartford Life were paid by another related company in the form of Hartford Fire did not affect Hartford Life's contractual discretion over claims decisions.
In addition, the Fourth Circuit concluded Hartford Life did not bear the burden of proving the plaintiff's condition changed before it denied continuing long-term disability benefits, or to seek a medical examination to prove the same.
This case highlights the need for clarity concerning which entity is subject to discretionary review in the context of an insured plan, and to remove any latent ambiguity concerning the relationship between affiliated companies.