Legal Question in Insurance Law in New York

death benefit overpayment in New York state:\n\nA death benefit was made in July 2007, 18 months later (January 2009), the beneficiary was notified by the insurance company they had miscalculated the benefit due to erroneous information received from the employer of the deceased. \nI have two questions, is there a time limit whereby the insurance company can come back to the beneficiary for the over payment (as 18 months does not seem to be a reasonable period)? Also, the overpayment was calculated using information received from the employer who sponsered the group life insurance plan, no information was supplied by the beneficiary.\nFinally, as an fyi...the overpayment in less than $5,000.\n \n\n


Asked on 7/31/09, 11:42 am

1 Answer from Attorneys
John W. DeHaan DeHaanBusse LLP

It sounds like this death benefit was through an employer-sponsored life insurance plan. If that is the case, it would be governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). Such ERISA plans commonly contain a provision which allow the carrier to recover any benefits paid in error, and usually provide a period of at least 2 years to commence a lawsuit under the contract. So, the carrier may have a valid claim that is not yet time barred. There is at least 1 Supreme Court case that would make it difficult for the carrier to win the lawsuit if the money it had paid was already spent. Also, for such a small amount, the carrier may not be willing to sue. It may still sell the claim to a debt collection agency, but that would be outside the scope of my practice. . . In the end, it depends on what the insurance policy/plan document says, and you should have that reviewed by a lawyer.

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Answered on 8/06/09, 4:14 pm


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