Parents confront insurer over stillbirth

By Fred Kelly
fred.kelly@indystar.com
September 18, 2003


An Army reservist from Kokomo is suing the government and the nation's largest life insurance provider to try to force them to pay a death benefit claim for his stillborn son.

The outcome of the case could set a precedent that could require insurance companies to provide death benefits to parents of thousands of stillborn babies, attorneys and industry observers say.

It may also spark fresh debate about the legal definition of when life begins, they said.

Michael Warnock last week filed the lawsuit against the federal Office of Servicemembers Group Life Insurance and Prudential Life Insurance Co. in U.S. District Court in Indianapolis.

In the suit, Warnock accuses Prudential and the government of breech of contract because they refuse to pay a $10,000 claim he filed after his son, Joshua, was stillborn on April 14, 2002.

His wife, Christine, carried the child for 38 weeks. Under Indiana law any stillborn baby who was in gestation for at least 20 weeks must have a burial because it is considered a life at that point, said a spokeswoman for the state Department of Health.

As a reservist, Warnock was enrolled in the military's Servicemembers Group Life Insurance program, which covers soldiers and their spouses and children.

Prudential collects $500 million annually in premiums to insure and administer the program for the military.

Warnock, who paid $6,000 for Joshua's funeral, said he was seeking damages to cover costs of the burial and other expenses.

Attorneys are seeking class-action status for the suit, which would allow other couples in the military's insurance program and whose stillborn babies were in gestation for at least 20 weeks to join the litigation. The class would include people who had stillborn babies after August 1993.

No hearing date has been set.

It is not immediately known how many people would fit into that category, lawyers said.

"When they wouldn't pay (my claim), it was a big kick in the face," saidMichael Warnock, 29. "No one is trying to make out like a bandit.

"I lost my son. You pay for insurance to cover things like this."

Government officials referred questions to Prudential, which declined comment.

Prudential has told the Warnocks it will not pay the claim because "the child was (never) alive," said Charleyne Gabriel, the couple's attorney.

Warnock said the company has offered to settle the dispute for $5,000, but he refused.

The suit alleges that he should receive a death benefit because the policy covers any "naturally born or legally adopted" children in his family.

However, life insurance policies generally do not cover children until they are at least two-months old, agents said.

"I've never heard of a policy that covers a child before it is even born," said Stanley Hopp, director of the Society of Insurance Research in Marietta, Ga. "This is a new one on me."

There were 609 stillborn babies in Indiana in 2001, the latest year for which statistics are available.

Yet no one in recent memory has filed a complaint with the Indiana Department of Insurance about an unpaid claim on a stillborn child, said Amy Strati, the agency's chief legal counsel.

She said she did not know whether anything in the state insurance code addresses the issue.

The Warnock case may set a legal precedent.

The federal courts have never ruled whether the parents of stillborn children are entitled to life insurance claims, Gabriel said. Other couples have inquired about the benefit but were denied, she said.

If the suit is successful, litigation against other insurers will follow, predicts John Fitzgerald, a professor of finance and insurance at Ball State University in Muncie.

It also likely will add fuel to the heated debate about abortion and the legal definition of when life begins.

"For years different people have tried to get insurance to recognize life at the earliest (stage)," Fitzgerald said. "Some people have tried to have their fetus insured.

"Companies have stayed away from this to avoid (taking a side) on the abortion issue."

Michael and Christine Warnock, who have been married for three years, continue to struggle to deal with their loss.

He said the legal wrangling has made a painful experience more difficult.

"This has been hard," Warnock said. "It's not something you want to deal with everyday."

Call Star reporter Fred Kelly at 1-317-444-6491.

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