The fact that a Tyco International Management Co. employee was out on disability when he sought to collect the $100,000 employer-sponsored life insurance policy on his deceased wife didn’t provide a legitimate reason for the company to deny the claim, a federal judge in Pennsylvania has ruled.
U.S. District Judge J. Curtis Joyner of the Eastern District of Pennsylvania said Prudential Insurance Co. of America, as claims administrator of Tyco’s benefits plans, had a “tortured” reading of the plan’s language resulting in a denial of benefits that was “arbitrary, capricious and a clear abuse” of Prudential’s discretion.
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