A former insurance agent for the Northwestern Mutual Life Insurance Company and his Idaho disability attorney filed a lawsuit against the insurer in Idaho Federal Court to recover his disability insurance benefits. In May 1970, Roger C. purchased a disability insurance policy from his own employer Northwestern Mutual Insurance Company (NWM) and subsequently purchased a second disability insurance policy in 1975. In addition, from 1970 until 1994 Roger C. added several life insurance policies from NWM to his portfolio of insurance coverage. And, having paid all premiums for the two (2) NWM policies as well as his other NWM life insurance policies, Roger C. rightfully expected to be fully covered by those policies should he become disabled, which he did in 2005. Unfortunately, NWM denied his claims for benefits.

Background of the Agent’s Disability Claim

After his stint as an insurance agent, Roger C. spent the majority of his working life as “a self-employed, commercial real estate developer” of anchor driven shopping centers. Dependent upon his “personal skills, proficiencies, labors, contacts, business acumen, talents, insights, leadership, management and administrative capabilities” to succeed, Roger C. participated in all aspects of his business development business.

Unfortunately, in the 1990s Roger C. began experiencing various maladies “most notably obstructive sleep apnea, hypertension, depression, anxiety, and related physiological symptoms” (i.e., migraine headaches, slurred speech, numbness and tingling, lack of concentration, poor memory, chronic fatigue and panic attacks).

Functionally disabled from performing the duties of his commercial real estate business, Roger C. attempted to continue working, but succumbed to his ailments in 2007 when he was formally diagnosed with general anxiety, disorder, moderately severe depression and progressive stress intolerance.

Roger C. Files is Disability Claim with NWM

Roger C. filed his disability claim with NWM, along with verifying medical records, but NWM demanded more. As requested, Roger C. provided the insurer with extensive medical information, medical records, and non-medical occupational information as well as opinions from his psychologist, psychiatrist and neurologist, all confirming Roger C.’s disability. After much back and forth of information and no claim decision by NWM concerning Roger C.’s benefits, Roger C. wrote a letter to Chairman and CEO of NWM asking for a “timely claim decision. Four days later, NWM’s disability benefits specialist denied Roger C.’s disability benefits claim and life insurance policy premium waivers.

After Denial of Claim, Roger C. and His Idaho Disability Attorney File a Complaint against the Insurer

Consequently, Roger C. and his attorney felt that there was no alternative to remedying Roger C.’s situation with NWM except to file the subject lawsuit in the Idaho District Court. Alleging that NWM breach its contract with Roger C., he and his attorney accuse NWM of violating their duty of good faith toward Roger C. by:

  • Intentionally and unreasonably denying his claims;
  • Not fairly debating his claims;
  • Not making a denial on the basis of a mistake; and
  • Harming him in a not-fully compensable manner.

They also claim that the insurer showed tortuous bad faith in that:

  • NWM relied on policy provisions not in Roger C.’s particular policy to deny his claim;
  • Even after numerous requests, NWM failed to supply Roger C. with “genuine copies of the insurance policies it relied upon and applied in denying his claims”;
  • NWM declined and evaded his repeated requests to provide him copies of his insurance policies;
  • NWM refused to provide him and his Idaho disability lawyer with copies of the insurer’s “rules, policies and procedures” for processing claims;
  • NWM asked for the same information again and again;
  • NWM claimed that his medical records and reports they used to deny his claim were privileged and confidential and could not be shared with him and his disability attorney; and
  • NWM refused to provide Roger C. with copies of the reports from consulting psychiatrists, investigators, and others it used to decide his claim.

Roger C. and His Attorney Accuse NWM of Deviating from Its Own Standards in Assessing Disability Benefits Claims

In addition, Roger C. and his Idaho disability attorney have stated in their complaint that NWM is guilty of breach of covenant of good faith and fair dealing in its denial of Roger C.’s disability benefits. They point to NWM’s conduct in handling, processing and ultimately denying Roger C.’s claim as the basis for this charge, and accuse the insurer of conduct that was “willful, intentional, knowing, malicious, reckless and in extreme deviation from appropriate and acceptable standards.” Consequently, Roger C. and his Idaho disability attorney petition the Idaho District Court to order NWM:

  • To provide Roger C. with the benefits of all his insurance policies, past, present and future;
  • To reimburse Roger C. for all premiums on life insurance policies that should have been waived as a result of Roger C. qualifying for disability benefits;
  • To pay Roger C.’s interest on his wrongfully denied claim and insurance premiums;
  • To pay Roger C. non-economic and compensatory losses in an amount not less than $250,000.00;
  • To reimburse Roger C. for Court costs and attorney fees for this action; and
  • To provide Roger C. with any other remedies the Court deems just and equitable.