Section 89.94. Exclusions

Exclusions which are ambiguous or unfairly discriminatory are not acceptable.

Notation

Notes of Decisions

Ambiguous Provision

Insurer’s policy which excludes from coverage persons who are ‘‘totally disabled’’ is ambiguous, and, therefore, must be construed against insurer. Schneider v. UNUM Life Insurance Co. of America, 149 F. Supp.2d 169 (E.D. Pa. 2001).

Exclusions Limited

Only exclusions which are ambiguous or unfairly discriminatory are prohibited in group policies. Other limitations, which are barred from individual policies, do not apply to group policies. Giangreco v. United States Life Ins. Co., 168 F. Supp 2d 417 (E.D. Pa. 2001).

Construction

In the absence of any statutory language or administrative rulings which interpret the meaning of the term ‘‘ambiguous’’ in a regulation, the court looks to the plain meaning of the term. The meaning of the term ‘‘ambiguous’’ as defined in Northbrook Ins. Co. v. Kuljian Corp., 690 F. 2d 368, 372 (3d Cir. 1982), is consistent with the plain meaning of that term as set forth in 31 Pa. Code § 89.94. Schneider v. UNUM Life Insurance Co. of America, 149 F. Supp. 2d. 169 (Pa. 2001); declined to follow 162 F. Supp. 1119 (C. D. Cal. 2001).

Nonpreemption under ERISA

The State insurance regulation section which prohibits ambiguous or discriminatory policy provisions is a law which regulates insurance, thereby excluding that section from ERISA preemption. An insured may bring an action for violation of that section, even if the coverage is provided as part of an employee’s ERISA benefit plan. Schneider v. UNUM Life Insurance Co. of America, 149 F. Supp.2d 169 (E.D. Pa. 2001).