The claimant, Nancy Love, was a 20 year employee of the bank before she became sick and was eventually diagnosed with multiple sclerosis. She was unable to work as of August 2001, began receiving disability insurance benefits and received those benefits through December 2005, when they were terminated.
There was no change or improvement in Love's condition that caused the termination of benefits. Instead, the bank's claims administrator, Liberty Mutual, had a "medical consultant", a Dr. Jonathan Sands, review Love's medical file. Despite Love's multiple sclerosis and despite the fact that she had been paid disability benefits for over four years, Sands concluded that her file revealed "no objective limitations in functional ability or capacity." So Love's LTD benefits were terminated.
Love appealed the termination of her LTD benefits. She submitted additional information regarding her condition and capabilities including a physical-therapy evaluation, a functional-capacity evaluation and a vocational evaluation, each prepared by a different doctor and each concluding that "Love had limited functional ability" due to her MS. Nonetheless, Liberty Mutual disregarded it all and refused to reinstate Love's benefits.
The Seventh Circuit ruled that Liberty Mutual's claims process was arbitrary and capricious. First, the court ruled that Liberty Mutual was required to explain its decision, including an explanation as to "why the reviewer chose to discredit the evaluations and conclusions of Love's treating physicians." Federal law requires, the court explained, that an insurance company provide "a reasonable explanation for its determination and must address any reliable, contrary evidence presented by the claimant." The insurance company must address the opinions and evaluations of the claimant's doctors: "they may not simply ignore their medical conclusions or dismiss those conclusions without explanation." Therefore, the court ruled that the insurance company "acted arbitrarily by terminating Love's benefits without sufficiently explaining its basis for doing so."