Case Bulletin – The Pennsylvania Supreme Court Holds that Insurance Policy Provision Requiring IME is Void
Most automobile insurance policies include a provision that requires an insured who is seeking first party benefits to submit to an independent medical examination, (IME). In a recent opinion, the Pennsylvania Supreme Court has held that those medical examination policy provisions conflict with Section 1796(a) of Pennsylvania’s Motor Vehicle Financial Responsibility Law, (MVFRL), which includes statutory protections for individuals insured under automobile insurance policies regarding the conduct of IMEs, and therefore they are void as against the public policy.
In the cases of Sayles v. Allstate and Scott v. Travelers, the insureds in both cases were injured in motor vehicle accidents, treated and thereafter sought first party benefits, requesting that their medical bills be paid. In each case, the insurance carrier requested the insured to undergo an IME. Each insured balked at the request, and as a result, the carriers refused payment of the medical bills in reliance on the policy provision that contractually allowed them to request the examinations. Both insureds sued in Common Pleas Court, with each alleging that the carrier’s conditioning of first party medical benefits on the IME violated Section 1796(a). The cases were subsequently removed to federal district courts on the basis of diversity jurisdiction. In both cases, the district courts held that the medical examination policy provisions conflict with the MVFRL which requires that a party seeking to compel an IME must present a petition with the court. In both cases, the courts predicted that the Pennsylvania Supreme Court would find the insurer’s medical examination provision in direct conflict with Section 1796(a). Both carriers appealed and the appeals were consolidated for disposition by the United States Court of Appeals for the Third Circuit.
The Third Circuit recognized that there is a split in decisions involving the IME provisions. It noted that the only Pennsylvania intermediate appellate court opinion that considered whether an insurer could compel an insured to submit to an IME absent a court order, did not address whether the policy provision that required an insured to submit to a medical examination conflicted with the MVFRL that requires a court order. See Fleming v. CNA Ins. Co., 597 A.2d 1206 (Pa. Super. 1991). Based on its recognition of the split in decisions, as well as the large number of insurance contracts containing similar IME clauses, the Third Circuit petitioned the Pennsylvania Supreme Court for certification of the following question:
Whether, under Pennsylvania law, a contractual provision in a motor vehicle insurance policy that requires an insured to submit to an independent medical examination
by a physician selected by the insurer, when and as often as the insurer may reasonably require, as a condition precedent to the payment of first-party medical benefits under
that policy, conflicts with the Motor Vehicle Financial Responsibility Law, 75 Pa.C.S. §1796(a), and is therefore void as against public policy.
As predicted by the district courts, the Pennsylvania Supreme Court indeed concluded that the policy provisions requiring the insured to submit to a medical examination conflicts with the MVFRL. The Supreme Court held that insurers are required to follow Section 1796(a) when seeking to compel an insured to submit to an IME, when the insured has refused to voluntarily comply with such a request, and any insurance policy which purports to set requirements by which an insurer may compel an insured to undergo an IME is required to comply with that section.
Going forward, insurance carriers will be required to petition the court in those cases where the insured refuses to voluntarily comply with a request for an IME, and the court, rather than the insurance carrier, will select the examining physician.