LTC Insurer Cannot Be Sued Under State’s Elder Financial Abuse Statute

Answering a certified question from the U.S. Court of Appeals for the Ninth Circuit, the Oregon Supreme Court holds that the state’s elder financial abuse statute does not apply to a case where a long-term care insurance company allegedly acted in bad faith to delay and deny claims. Bates v. Bankers Life and Casualty Company (Or., No. 2, Jan. 19, 2018).

Residents of Oregon who purchased long-term care insurance policies from Bankers Life and Casualty Company sued the insurer in federal court. The policyholders claimed that the company violated Oregon’s elder financial abuse law by purposely developing procedures to delay and deny insurance claims. The policyholders alleged that, among other things, the company didn’t answer phone calls, lost documents, wrongly denied claims, and paid less than policyholders were entitled to.

The policyholders sued the company in federal court. The federal district court dismissed the claim, finding that Oregon’s elder financial abuse statute did not apply. The policyholders appealed, and the U.S. Court of Appeals for the Ninth Circuit certified a question to the Oregon Supreme Court to determine whether the policyholders stated a claim under the state financial elder abuse statute for wrongful withholding of money.

The Oregon Supreme Court answers the certified question in the negative, holding that “allegations that an insurance company, in bad faith, delayed the processing of claims and refused to pay benefits owed to vulnerable persons under an insurance contract do not state a claim under [Oregon’s elder financial abuse statute] for wrongful withholding of ‘money or property.'” According to the court, the legislature intended the state elder financial abuse statue “to apply only where the other person holds the same money or property that the other person acquired from the vulnerable person and that still ‘belongs to’ the vulnerable person.”

For the full text of this decision, go to: http://www.publications.ojd.state.or.us/docs/S064742.pdf

David Wingate is an elder law attorney at the Elder Law Office of David Wingate, LLC. The elder law office services clients with powers of attorneys, living wills, Wills, Trusts, Medicaid and asset protection. The Elder Law office has locations in Frederick and Montgomery Counties, Maryland.