An Insurance Commissioner’s non-binding opinion banning discretionary language in an ERISA governed plan has no effect.

Here’s the case of Frazier v. Life Insurance Company of North America, __ F.3d __ (6th Cir. August 5, 2013) (Court  is “‘not bound by language in a non-binding opinion [banning discretionary language in a disability insurance policy] by Kentucky’s [Insurance] Commissioner.”).

But wait….there’s more.

Read this case to get some helpful rulings on a host of other key ERISA issues including:

  • when an insurer is vested with discretion,
  • what standard applies in determining the occupational duties of the claimant,
  • whether plan language obligates the insurer to conduct an independent medical exam,
  • whether the insurer is obligated to help the claimant with her Social Security Disability claim.

FACTS: Frazier was a sorter on a production belt and sought ERISA-governed long term disability benefits due to low back pain. The plan contained discretionary language, but Kentucky’s Insurance Commissioner issued a non-binding opinion that “discretionary clauses deceptively affect the risk purported to be assumed in any policy and as such, any forms containing discretionary clauses may be disapproved.” LINA denied the claim and appeal as there was no evidence of sensory deficits.  The trial court granted LINA’s summary judgment, applying the discretionary standard of review, and Frazier appealed.


  1. Frazier claimed de novo review should apply because the Plan did not confer discretionary authority in LINA.  But the insurance policy was an ERISA plan document and therefore the plan documents made LINA a “named fiduciary for deciding claims for benefits under the Plan, and for deciding any appeals of denied claims.”  Op. at 9.
  2. Language in a plan requiring the claimant to “provide…satisfactory proof of Disability” grants discretion to administrators and fiduciaries.  Op. at 9 (Emph. in original).
  3. The court applied discretionary review, and not de novo review, because the court is “‘not bound by language in a non-binding opinion’ by Kentucky’s [Insurance] Commissioner.”  Op. at 10.
  4. LINA reasonably consulted with the employer to ascertain her job duties. “LINA needs only determine the duties of the occupation as it is normally performed in the national economy.” Op. at 12
  5. LINA sufficiently consulted with Frazier’s doctors by seeking notes and other information related to her condition and treatment. Op. at 12.
  6. LINA “reasonably gave more weight to the objective findings and express clearance to return to work provided by [one treating doctor] rather than [another treater’s assessment] which lacked diagnostic data.” Op. at 12.
  7. LINA was under no obligation to have Frazier physically examined—although the Policy permits LINA to have a physical evaluation performed on a claimant, no language requires it.”  Op. at 12 (Emph. added).
  8. Plaintiff claimed LINA was judicially estopped from concluding she was not disabled because LINA apparently made representations supporting Frazier’s claim for disability with the Social Security Administration. The Court stated that LINA’s statement supportive of the SSDI claim have no effect because “[t]hese statements were made before LINA finished assessing Frazier’s benefits claim and thus before receiving any offsets from an SSDI award.”  Op. at 12.
  9. LINA was not required to assist Frazier in her Social Security Disability Claim application. The plan language indicates there is no “obligation” for LINA to assist Frazier. (“The Insurance Company may help the Employee in applying for [SSDI] Benefits.”)  Op. at 13.

Key Take Away:  A very nice case to read for a variety of issues.