Laventure v. Prudential Insurance Company of America, 237 F.3d 1042 (9th Cir. 2001) The Ninth Circuit Court of Appeals held that a disability insurance policy purchased by a family-owned company to cover only the owners of the company but none of the other employees is not an “employee benefit plan” under ERISA, such that a lawsuit for benefits was not preempted by ERISA, but instead was governed under state law.
The Ninth Circuit Court of Appeals held “notice-prejudice” rule of insurance law, requiring an insurance company to prove that it was actually prejudiced by the insured’s submitting a claim beyond the time set forth in the policy is a law “regulating insurance,” saved from preemption, and thus, applicable to claims brought under ERISA. This decision was essentially upheld by the United States Supreme Court in the sister case of Unum Life Insurance Company v. Ward, 526 U.S. 358 (1999).
The Ninth Circuit Court of Appeals held that language in our client’s long-term disability insurance policy requiring “satisfactory proof” of her disability did not unequivocally delegate discretion to determine eligibility for benefits to the insurance company, such that the applicable standard of review was de novo.