In December 2010, The Texas Department of Insurance issued an order banning the use of discretionary clauses in Long Term Disability insurance policies. This is an important protection for Texas consumers, as previously, insurance companies utilized these clauses to deny the payment of Long Term Disability benefits based on their own process of determination as to who was eligible to receive payments. That is no longer the case.
This quote from the beginning of the lengthy order neatly sums up what is at the heart of this measure:
"The new subchapter prohibiting the use of discretionary clauses in certain insurance policy forms and HMO evidence of coverage forms is necessary to protect insurance and HMO consumers from the possibility of incorrect and unfair coverage determinations by insurers and HMOs (carriers) without a subsequent opportunity for a full and independent review under a non-deferential standard. Discretionary clauses are contractual provisions that purport or act to reserve for carriers the discretion to interpret the terms of an insurance contract or HMO evidence of coverage and alter the judicial standard of review upon appeal."
You can download and review the entire Texas Long Term Disability Discretionary Clause Order here. Also, you may call Lonnie Roach, or click our Get Started button and fill out our inquiry form if you have been denied insurance benefits and have questions. The knowledgeable attorneys at Bemis, Roach & Reed would be pleased to assist you.