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CUNA Mutual considering appeal in credit life case
MADISON, Wis. (6/16/09)--CUNA Mutual Group says it is considering an appeal of a federal jury's "excessive" $6.2 million award Friday over its denial of a credit life disability claim on a former school teacher's home equity loan. The jury in Rapid City, S. D., awarded $200,000 in compensatory damages and $6 million in punitive damages to the estate of Teri Powell, who died of cancer in 2007. Her personal representative, Sharon McElgunn, and Powell's attorneys continued to pursue the case. Powell purchased disability insurance from the company in 2001 on a home equity loan and stopped working the following year because of deteriorating health. In 2005, she was diagnosed with cancer and applied for benefits as far back as 2002, the year she stopped working. CUNA Mutual denied the claim, saying she had not contacted the company when she first became disabled in 2002. "CUNA Mutual carefully examines each claim and pays benefits due under the policy," said CUNA Mutual in a statement. "In this case, we talked with Ms. Powell about the claim, explained how she could have our decision reconsidered and ultimately paid all of Ms. Powell's benefits after working with her on the claim. "As a closely regulated industry, CUNA Mutual routinely works with regulators to review claims handling practices. We are fully transparent, and the interpretation of the policy that the plaintiff’s lawyer challenged was one that our regulators have reviewed in the past and raised no question. And we are currently working with regulators to discuss how best to handle this situation. We have also had other courts examine this type of claim and [they] agreed that CUNA Mutual properly handled the claim. "As a mutual insurance company, our responsibility is to administer our claims fairly. We consistently meet that responsibility. In 2008, CUNA Mutual paid out $1.6 billion is benefits to policyholders, of which $385.6 million was in claims for credit insurance. While Teri Powell’s situation was tragic, we disagree with the verdict and believe the award to be excessive. As such, we are considering an appeal in this case."


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