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Two more file suits on CUNA Mutuals credit disability
RAPID CITY, S.D., and GREENVILLE, S.C. (7/10/09)--Two more credit union members have filed suits against CUNA Mutual Group and CUNA Mutual Insurance Society (CUMIS) regarding credit disability benefits. Conrad Perovich, a member of Dacotach FCU, Rapid City, S.D., filed a lawsuit July 2 in U.S. District Court in the District of South Dakota, Western Division, against CUNA Mutual Group and CUMIS for denying him credit disability coverage. Perovich is suing CUNA Mutual and CUMIS for rejecting disability benefits regarding a claim he submitted Feb. 28, 2008, for benefits between Jan. 9, 2007, and Jan. 11, 2008. CUNA Mutual denied Perovich’s claim on March 17, on the basis that he had not filed for benefits within the time frame allowed under the certificate of insurance, the complaint said. Perovich claims that he did file within the time allowed by the certificate of insurance, which says that proof of loss must be submitted within 90 days when the claimant’s disability stops. Russell Smith, a member of Market USA FCU, Laurel, Md., also filed suit May 7 in South Carolina after CUNA Mutual Group refused to pay benefits after Smith became disabled, according to the complaint. “CUNA Mutual carefully examines each claim and pays benefits due under the policy,” said Phil Tschudy, CUNA Mutual media relations manager. “We are in a closely regulated industry, and we routinely work with regulators to review claims handling practices. We are fully transparent, and the interpretation of the policy that is being challenged was one that no court had ever disagreed with,” he told News Now. CUNA Mutual is reviewing past claims that might involve a similar situation, and will work with regulators to discuss how to best handle the situation, he added. “As a mutual insurance company, our responsibility is to administer our claims fairly, and we consistently meet that responsibility,” Tschudy said. In 2008, CUNA Mutual paid out $1.6 billion in benefits to policyholders, of which $385.6 million were in claims for credit insurance. In June, the estate of Teri Powell, who died of cancer in 2007, won a lawsuit against CUNA Mutual Group. She filed the suit after CUNA Mutual denied credit disability benefits on her home equity loan (News Now June 16). CUNA Mutual Group is considering an appeal of that decision.


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