Ninth Circuit Finds Unum’s 2005 California Settlement Agreement Prohibits Self-Reported Symptoms Limitation in Allin Corporation’s Disability Plan

In Cox v. Allin Corporation Plan; et al., No. 16-15231, __F.App’x__, 2021 WL 613799 (9th Cir. Feb. 17, 2021), Plaintiff-Appellant Cox appealed the district court’s judgment in favor of Unum in his suit for long-term disability benefits. Cox’s disability claim was based on his diagnoses of vertigo and dizziness. Unum paid benefits for 24 months and then terminated his claim under the policy’s self-reported symptoms limitation.

The Ninth Circuit was presented with several issues, but it reversed and remanded based on its determination “that the district court erred in finding that Unum’s 2005 California Settlement Agreement (CSA) with the California Department of Insurance (CDOI) did not apply to the Allin Plan and thus that the CSA’s prohibition on self-reported symptoms limitations did not apply.” The CSA provides that the limitations on self-reported conditions “shall not be applied in existing California Contracts.” A “California Contract” is defined as “a policy of disability income insurance issued by a Respondent which is subject to the jurisdiction of and approved by the Department.”

The district court erroneously determined that the Allin Plan was not subject to the jurisdiction of the CDOI. California law subjects insurance provided in California to the jurisdiction of CDOI. The California Insurance Code explicitly prohibits the provision of group disability coverage in California unless the policy is approved by the CDOI. See Cal. Ins. Code § 10270.9. Here, Unum understood it was subject to the jurisdiction of the CDOI. “It is irrelevant that the Allin Plan states that it is governed by Pennsylvania law because the CSA applies to all California Contracts, without regard to the policy’s stated governing jurisdiction.”