Reliance Standards’ unreasonable and bad faith claims handling , was carefully scrutinized by Judge Reeves, sitting in the Southern District of Mississippi. Reliance and its competitors in the industry, as the Judge notes, “have conflicting missions of deciding who qualifies for benefits and ensuring those decisions do not undermine their own bottom line.” Nichols v. Reliance Std. Life Ins. Co., No. 3:17-CV-42-CWR-FKB, 2018 U.S. Dist. LEXIS 109526 (S.D. Miss. June 29, 2018). This conflict of interest has become very evident to the courts, which frequently criticize the practices of disability insurers; yet insurers refuse to change their ways, seeking to preserve their financial interests.
The case involved 62 year old Ms. Nichols who spent her entire life working as a Hazard Analysis and Critical Control Points Coordinator at a chicken processing plant in Mississippi. Her duties included training employees on quality assurance procedures and inspecting, packaging, and exporting meat products in processing areas, which were maintained at near-freezing temperatures. Ms. Nichols suffers from circulatory disorders, including Reynaud’s Syndrome rendering her unable to tolerate cold temperatures because doing so would cause her arteries to spasm and could lead to serious medical complications, such as gangrene.
Ms. Nichols’ medical conditions clearly prevented her from performing the duties of her occupation, which required exposure to cold. Reliance sought a way to deny Ms. Nichols’ claim turning to the policy’s definition of “regular occupation”—which defines a claimant’s occupational duties as they are “normally performed in the national economy,” rather than “the unique duties performed for a specific employer or specific locale.” Reliance excluded Ms. Nichol’s duties associated with exposure to the cold by generally classifying her job to ignore the meat inspection, packaging, and exporting duties of Ms. Nichols’ occupation and denied her disability claim. Ms. Nichols brought suit in federal court, and she won a resounding victory.