Insurance industry

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This article is part of the Tobacco portal on Sourcewatch funded from 2006 - 2009 by the American Legacy Foundation.

PR and Lobbying techniques

The health insurance industry has adopted lobbying and PR techniques to fight health insurance reform that were earlier pioneered by the tobacco industry. One technique, known as the "Monster Theory" or "creating a bigger monster,"[1], relies on manufacturing fear among the populace to manipulate public opinion about an issue. For example, the tobacco industry has long used the strategy of fighting cigarette tax increases by claiming the tax will result in increased cigarette smuggling.[2] In a similar vein, the health insurance industry, through third parties, has raised fears of health insurance reform by frightening people with the specter of government-run "death panels."[3]

Tactics insurance companies use to avoid paying claims

"Slow Walking" - Insurance companies often delay rendering a decision on a disability claim because many people, distressed about their financial future, will simply abandon their claims and attempt to find an alternative type of employment. The Employee Retirement Income Security Act ("ERISA") requires insurance companies to render a decision within forty-five days, and only allows companies two thirty-day extensions if the company claims a need for the extension that is beyond its control. The intent behind these time limits is to prevent insurance companies from engaging in "slow walking." Despite the stringent regulations, many insurance companies continue to engage in "slow walking," because they know that many unrepresented claimants do not understand the law and are unlikely to pursue the violations in court.[4]

Life insurance

Claims of fraud - According to the disability benefits law firm of Elkin and Shea, "There are several common denial strategies that insurers will employ for the purpose of avoiding the liability of paying a life insurance claim. Typically, an insurer will point to the initial application for the purpose of claiming fraud in the procurement of the policy. A favorite tactic is the use of a pre-existing limitation clause. This clause usually reads that death due to a pre-existing condition which was not disclosed to the insurer will void the policy. This would seem rather unfair since the insurer usually has the person procuring the policy undergo a medical examination including blood tests as well as giving a complete list of treatment providers for past years. This premise is embodied in the “incontestable period” provision in most policies. This provision states that an insurer has a limited period of time to investigate the insured and void the policy. Otherwise, the insurer will waive its right to contest the policy. Unfortunately, insurers will try to advance a fraud claim to dissuade beneficiaries from litigating claims in order to avoid substantial liability posed by life insurance claims payouts.

Claims of self-inflicted injury - Another clause which has resulted in substantial litigation is the “self-inflicted injury” in cases of accidental death. Depending on the jurisdiction, activities such as drunken driving, dangerous behavior, and auto-erotic asphyxiation have been found to be “self-inflicted” injuries for which claim denials have been upheld in court. Whenever you are confronted with such a claim denial, it is essential to retain experienced legal counsel for assistance."[5]

The following is a listing of firms, individuals, organizations, programs, and other links (SourceWatch or external) that are related to the insurance industry.






Related SourceWatch articles


  1. Philip Morris Project Downunder Conference Notes Report. June 24, 1987. Bates No. 2021502102/2134, at pages 15 and 25
  2. DC Lobbying. Arizona & Colorado.
  3. James Strachan, Ph.D., Online Journal ‘Death panels’ and the health insurance industry, August 18, 2009. Accessed September 11, 2009
  4. Disabled Man's Battle with MS and Standard Insurance Company Featured on Good Morning America March 3, 2009. Accessed August 17, 2009
  5. Elkind and Shea Life Insurance Policy Litigation, undated, accesed August 17, 2009

External articles