Posts in category: Case Reports

CR11

• Disability claim – claim repudiated on basis of failure to meet criteria of screening tests – insured’s medical practitioners’ view that insured not capable of engaging in his occupation.

The complainant, a self-employed mechanic, was diagnosed as having a prothombotic tendency after suffering a deep vein thrombosis with severe pulmonary embolism, and a sagittal sinus thrombosis with cerebral venous infarcts and generalised seizures.

The view of the neurologist who treated him was that he no longer capable of engaging in his former occupation as a mechanic. Formal neuropsychological testing revealed deficits in executive functioning – he was unable to engage in abstract thought, and displayed perseveration and deficits in attention and working memory. In addition, the neurologist noted that he would have to take Warfarin, a blood-thinning drug, for life, and stated his view that “the combination of using Warfarin in a patient with seizures is fraught with difficulty, and then to additionally expose such a patient to a workshop environment with dangerous moving machinery and expect him to continue to work is an irresponsible and dangerous practice. “ It appears that the complainant would run the risk of severe bleeding if injured while on Warfarin, as a relatively minor laceration could result in hospitalisation.

The complainant had purchased a “new generation” disability product. A selling point for this product was that a lump sum disability benefit was payable not if an impairment affected one’s ability to perform a specific occupation, as in the classic disability benefit, but according to a system of strict medical criteria, described as “objective and fair”. Thus, when the complainant submitted his claim, it was assessed against the “nervous system” criteria. To qualify for a 50% benefit these criteria were: “inability to comprehend or communicate language symbols or 85% speech impairment or able to perform ≤ 4 basic activities of daily living or destruction of an optic nerve or monoplegia or < 20/125 Snellen rating bilaterally or > 75% binaural hearing impairment”. It seems the complainant did not meet any of these requirements – but the insurer repudiated the claim specifically on the basis that the neurologist had recorded a score of 5/6 on the Activities of Daily Living score sheet. In the last category, “Advanced activities”, he scored the complainant as “poor/cannot” in almost every sub-category, specifically memory, problem solving and stress adaptation.

The Ombudsman’s office commented that if one read the policy as a whole, it could not be interpreted as restrictively as the insurer had done. The wording in the policy was reminiscent of a classic disability policy.

The insurer recognises that some illnesses could be assessed only through strict screening tests. The policy stated that in cases where objective criteria were insufficient a more subjective test, the Activities of Daily Living score sheet, had to be used “to assess incapacity to work, for example, the inability to communicate, loss of memory, impaired locomotion, etc.” The score sheet tests activities in six basic activity categories: self care; communication; physical activity; sensory function; hand functions; and advanced functions.

We pointed out to the insurer that, in interpreting the contract to determine the common or constructive intention of the parties, and having regard to the contract as a whole, one needs to reconcile the policy provision that “this benefit pays a capital amount in the event of you being medically impaired and hence unable to work”, with an exclusion simply on the basis of medical screening tests that do not specifically measure an ability to work. The quoted statement indicated the nature and purpose of the contract: to provide cover if you were medically impaired and unable to work. The link between the criteria and the purpose was in fact explicitly acknowledged in the policy document: “these criteria are designed to establish whether your disability prevents you from working at all”. We suggested that the criteria should be seen, in the context of the contract as a whole, as guidelines to gauge whether an insured is able to work. They should not therefore be applied mechanistically but to help the insurer form an opinion as to the claimant’s ability to work, the insurer retaining a discretion to override the strict application of the criteria to give effect to the policy provision that the benefit is payable if you are “medically impaired and hence unable to work”, if indeed it is clear that the person cannot work.

The complainant’s case provided a good example of someone who was fully functional in most respects allowed for on the score sheet (5 out of the 6 categories), but who utterly failed the 6th category (Advanced Activities), which happened to contain most of the abilities one would immediately recognise as being necessary to enable one to work as a mechanic: social interaction, understanding concepts, memory, problem solving.

The insurer responded to our input by conceding that reliance solely on the Activities of Daily Living tool had led to an unfair result. It agreed to pay the 50% benefit immediately and indicated that it would consider payment of the remaining 50% after the complainant had had a further neuropsychological assessment to determine whether his cognitive impairment was moderate or severe. We accepted the reasonableness of this stance.

SM

CR12

Disability claim – “own, similar or other occupation” – whether the complainant is suited for the alternative occupations the insurer maintains he is able to perform.

The complainant worked as a caretaker of community halls for a municipality. He had chronic bilateral osteoarthritis of the knee joints and had had total knee replacements. His services were terminated on grounds of incapacity and he submitted a claim for a disability benefit.

The definition of disability in the policy reads:

“The Company shall regard a Member as having become Disabled if…due to an injury, illness or a disease, he is totally and permanently prevented from following his own occupation, and a similar or other occupation for which he is suited having regard to his ability, training, education and experience.”

The insurer did not in dispute that the complainant could not perform his own occupation as a caretaker, which was a physically demanding job involving walking, bending to clean floors, lifting and carrying chairs, pushing a trolley, etc. However, the insurer maintained that he would be able to perform the duties of a clerk (he had worked as an office clerk before for a short period many years ago).

An examination of the complainant’s occupational history and current status, as set out in the occupational therapist’s report, indicated that, of his 27 years spent working, some 21 had been spent doing physical work: 3 years as a petrol attendant, 3 years installing electrical poles, 1 year as a packer and 14 years as a caretaker. Approximately 6 years were spent working as an office clerk, a number of years earlier (1978 – 1983), in our view making any skills he gained during that time out of date or forgotten to some degree. It appeared likely that he did not have a great aptitude for work as an office clerk, as his subsequent jobs, for the next 18 years, were manual jobs. His abilities and experience thus lay overwhelmingly in physical manual work. He had a relatively low level of education (Std 8) and no other training whatsoever. Our stated view was that in all the circumstances it was not reasonable to regard the complainant as suited for a clerical occupation.

The insurer objected to our preliminary view, stating that the fact that the bulk of the claimant’s work was manual was irrelevant, and reiterating that he had six years as an office clerk which would certainly be classed as experience.

We made a final ruling however that it was not reasonable to regard the complainant as suited for the clerical occupations mentioned. In the ruling we quoted from the LOA booklet “Impairment and Disability Assessment Guidelines” as follows:
“Factors which influence the reasonability of an alternative/similar occupation, include:
…
Years in current position. The lower one’s qualifications, and the longer one is in one specific occupation, the less reasonable will any alternative position become. In this regard it is recommended that it should be unfair to expect the following categories to do any alternative work, ie own/similar definitions should effectively become own occupation:
* Any manual labourer with qualifications less than Grade 12 at school, and doing a manual work for > 10 years”.

SM

CR13

Disability claim – total permanent disability – elements of definition – interpretation of word “suited” in definition

The complainant, a bus driver, suffered a gunshot wound. As a result his left leg was amputated above the knee, and he now wears a prosthesis. He was dismissed from his employment on grounds of incapacity, and has not worked since. He had cover in terms of a group insurance scheme arranged by the company which gave him a housing loan.

The definition of disability in the policy is as follows:

“A life assured shall be regarded as totally and permanently disabled if in the opinion of the insurer, he has been so disabled by injury or illness as to be continuously, permanently and totally incapable of engaging for remuneration or profit (a) in his own occupation, or (b) in any other suited occupation for which he is or could reasonably be expected to become qualified by his knowledge, training, education, ability and experience.”.

An Occupational Therapist (“OT”) who assessed the complainant reported a number of ongoing physical limitations and pain, and stated her opinion that he was totally and permanently compromised for his occupation as a bus driver. However she was of the view that he had the potential for retraining for semi-skilled, sedentary occupations to which he would be suited, such as machine operator.

The insurer pointed out that the housing loan company which arranged the group insurance had selected cheaper cover with a stricter than usual definition of disability. The insurer accepted that the complainant could not perform his own occupation as a bus driver. However it applied criteria in the Dictionary of Occupational Titles and concluded that there were many types of “light work” machine operator jobs (28 examples were listed) for which, with reference to the definition wording, it could reasonably be expected that the complainant could become qualified. It could also reasonably be expected that he develop the necessary physical capacity through a vocational rehabilitation programme. He had even done some machine operator work for a period before, in the early 1980’s. The insurer maintained that on the evidence he was not permanently incapable of performing an alternative occupation, and rejected the claim.

The Ombudsman’s office took the view that “any other suited occupation” must be interpreted to refer to an occupation in which a person of the insured’s level of knowledge, training, education, ability and experience could engage, but which a person of lesser knowledge, training, education, ability and experience would not be able to follow – in other words it is not referring to an occupation at a lower level. It would be unreasonable to hold that the insured fell outside the requirements of the definition, on the grounds that he was capable of engaging in some job at a lower level than the job he previously held.

The complainant’s work history, as outlined in the OT report, indicated that over the 22 years of his working life he had gradually bettered himself and his prospects. Starting out as a handyman, he later became a machine operator, which would have involved some specific training. Thereafter he left for “better prospects” to become a truck driver; this would have involved the training needed to obtain a specific licence. After five years he obtained a bus driver’s job, which came with improved benefits, and he gained experience and salary increases by working in this position for eight years. To expect the complainant to work as a machine operator at this stage, or to start out in some other form of semi-skilled sedentary work, would be to expect him to work at a lower level than at the time of his disablement, in an occupation which cannot be seen as another suited occupation.

The definition also envisages the possibility of further training: to be considered disabled, the insured must be incapable of engaging in any other suited occupation for which he could reasonably be expected to become qualified. However this must imply that any further training would be towards the end of qualifying him for a job at the same level as the one he is incapable of performing (“own occupation”), or a higher level, but not a lower level.

The amputation of the complainant’s leg above the knee had left him considerably impaired, with a reduced range of movement, pain, muscle weakness, poor dynamic balance, reduced physical and mental stamina and an inability to tolerate prolonged sitting without discomfort. He could not drive, or even use public transport without the help of an attendant. His level of education was not high (standard 7) and his literacy and numeracy skills were average or below average. All these factors would strongly indicate that the complainant was not able to perform his own or any other suited occupation, nor could he reasonably be expected to become qualified for a suited occupation, taking into account his knowledge, training, education, ability and experience.

It did not seem on a balance of probabilities that the complainant was capable of working full-time in light physical work. In any event whether he could perform any alternative occupation was not the test engendered by the definition; the insured should be regarded as totally and permanently disabled if he could not do his own or any suited occupation, at the same level. The Ombudsman’s office made a provisional ruling that the claim should be admitted and paid, and the insurer thereafter admitted the claim.

SM

CR14

• Disability claim – insurer being pedantic

Background

Mrs A enjoyed an Income Protection Benefit from Company X. She was booked off from work for back problems. According to her general practitioner she should rest for 3 weeks and go for physiotherapy and biokinetic exercises. Two days later she instituted a claim but was informed that the claim was repudiated because she was not booked off by a specialist. She complained about this and Company X undertook to re-assess the claim. In the end it repudiated the claim because she did not go to a physiotherapist.

According to Mrs A, her doctor had advised her to rest and take medication, and only if that did not help, should she go for physiotherapy. When the three weeks expired she did go to a physiotherapist.

When we wrote to Company X it responded that the doctor’s instruction was not carried out. It also do no accept that a general practitioner could diagnose a serious back condition without referring the insured to a specialist. It relied on a clause in the contract which stated that “professional medical advice shall be sought and followed promptly on the occurrence of any bodily injury or illness and the company shall not be liable for that part of any claim which in the opinion of its medical advisor arises from the unreasonable or wilful neglect or failure of any insured person to seek and remain compliant under the care of a qualified medical practitioner”.

Assessment

We did not agree with Company X that Mrs A did not carry out the doctor’s instruction or that the doctor’s advice could be interpreted that she should immediately go for physiotherapy. We also did not agree that the abovementioned clause could be interpreted that she should consult with a specialist before a valid claim could be instituted.

Result

Company X decided to pay the benefit.

AS

CR15

Disability – suitable alternative occupation

Facts

The insured in this case was a saleslady in the fresh produce department of a small supermarket. She started suffering from repeated hernia complaints for which she had six repairs during a period of five years. As a result her employer “boarded” her after they had attempted to redeploy her to delicatessen department. Here she was still required to lift packages and she became acutely ill and the employer thereupon terminated her employment. The employer also indicated that the insured was unable to stand for extended periods and presented with excessive abdominal and lower limb swelling by the end of the working day. When she submitted a disability claim to the insurer the insurer declined the claim on the basis that although the complainant could no longer fulfil her previous occupation she could work as a saleslady in the fresh produce department of a different kind of supermarket or she could work as a cashier.

The complainant was 46 years old and had a standard seven education and had worked as a saleslady in the fresh produce department since commencing employment. In the light of her physical disabilities we requested the insurer to re-evaluate the complaint. The definition of total and permanent disability which applied to her policy read as follows: “the normal occupation in which the life assured was gainfully employed at the time of disablement or any other occupation for gain or reward to which the life assured would be reasonably suited by education, training, earnings, status or experience.”

Discussion

We were of the opinion that the alternative occupation for which the complainant would be able to qualify would require extensive accommodation by an employer to such an extent that we were not convinced that such occupations existed in reality. As she was unable to lift objects, unable to stand for extended periods and according to her previous employer did not have the intellectual capacity to work as a cashier that left a very limited number of occupations available to her. We were not convinced that these fell within the purview of the definition. A claims consultant from a reinsurer re-evaluated the claim and submitted that it was unlikely that any new potential employer would willingly tailor-make a position to suit the complainant and conceded that it would be unreasonable to decline the claim on the basis that the complainant could carry on an alternative occupation. The insurer accordingly paid the claim.

JP