|
|
Publications
Passage of South Carolina Statute Does Not Retroactively Relieve Insurers From Paying Class Award
Insurance Law Update
March 2010
Fourth Circuit Court of Appeals
In Ward v. Dixie Nat. Life Ins. Co., 595 F.3d 164 (4th Cir. (S.C.) Feb. 8, 2010), the Fourth Circuit Court of Appeals held that the South Carolina Legislature’s passage of a statute providing a definition for the phrase “actual charges” in a supplemental insurance policy could not be retroactively applied. In particular, the court declined to reverse summary judgment in favor of a class of insureds based on a contrary interpretation of “actual charges” because that would “undermine the presumption against statutory retroactivity and raise constitutional concerns.”
The class members held supplemental cancer insurance policies that required insurers to pay “actual charges” directly to policyholders, not to medical providers. The insurers had been making payments under the policies based on an interpretation of “actual charges” construed to refer to the amount a medical provider actually received as payment from primary insurers. Plaintiffs sued the insurers, contending that the insurers’ payments were in breach of the terms of the policy because “actual charges” meant the full amount a medical provider billed patients for its services. The Fourth Circuit Court of Appeals ultimately adopted the policyholders’ definition of “actual charges” and, on remand, the district court granted the class summary judgment and awarded almost $8 million in damages.
In response to the Fourth Circuit’s decision, the South Carolina Legislature enacted a statute that adopted an interpretation of “actual charges” consistent with the position taken by the insurers. The insurers moved for judgment on the pleadings, arguing that the new statute prohibited them from paying “actual charges” as previously defined by the Fourth Circuit. The district court denied the insurers’ motion and the Fourth Circuit affirmed. The court declined to reverse its earlier decision in favor of the policyholders’ definition of “actual charges,” finding that there was no “clear congressional intent in favor of retroactivity” in the statute.
|
Related Offices
Related Practices
|