What Plan Language do You Need to Confer Discretionary Review?

Do you get discretionary standard of review if the plan states: “Written or authorized electronic proof of loss SATISFACTORY TO US must be given to Us at Our office, within 90 days of the loss for which claim is made.”

You would likely have discretionary review in the First, Eighth and Tenth Circuits…

BUT you would NOT have the benefit of discretionary review with this “satisfactory to us” language in the Second, Third, Seventh and Ninth Circuits.

Here’s the recent case of Viera v. LINA, __ F.3d __ (3rd. Cir. June 10, 2011)pdf (“[S]atisfactory to us” language does not confer discretion). This case also provides “safe harbor” language to use to make sure you get discretion in the Third Circuit next time.


Viera was covered by an accidental death and dismemberment (“AD&D”) policy issued by Life Insurance Company of America (LINA), which was subject to ERISA. Viera had a heart condition for which he took Coumadin to prevent blood clots. He died in a motorcycle accident. The Certificate of Death mentioned cardiovascular disease as one of multiple injuries contributing to the accident.

LINA denied the claim for benefits, relying on a medical review that concluded Viera’s Coumadin treatment complicated medical treatment and contributed to his death. LINA denied the appeal. Viera’s estate sued.

During litigation Plaintiff submitted an expert’s report which concluded that the Coumadin made “the bleeding worse” but it was “unreasonable to propose that, if not for the [Coumadin], the patient would have survived.” (This had not been a part of the record on appeal.)

THIRD CIRCUIT COURT OF APPEALS HELD … on the issue of De novo or Discretionary Review.

  1. “Proof of loss satisfactory to us” language does NOT confer discretion. Op. at 12-13, 19. (The Second, Seventh and Ninth Circuits follow this analysis.) This differs from the First, Eighth and Tenth Circuits which have held that “satisfactory to us” language DOES confer discretion.) Op. at 16-18.
  2. “Proof of loss satisfactory to us” language reserves only “the inevitable prerogative to determine what FORMS of proof must be submitted with a claim—something that an administrator in even the most tightly restricted plan would have to do.” (Quoting Diaz v. Prudential Insurance Co. of America, 424 F.3d 635, 639 (7th Cir. 2005)(Emph. in original). Op. at 19-20.
  3. Recommended Safe Harbor Discretionary Language: “If an administrator wishes to insulate its decision to deny benefits from de novo review, we suggest … the following “safe harbor” language: ‘Benefits under this plan will be paid only if the administrator decides in [its] discretion that the applicant is entitled to them.'” Op. at 21.

The case was remanded for further proceedings.