Oct. 2003 – Lyon’s insurer can delay payment

Des Moines Register, Frank Santiago, October 28, 2003

Lyon’s insurer can delay payment

Tom Lyon’s widow must wait to collect $100,000 in life insurance on her slain husband because state law allows companies to check for fraud in insurance policies less than two years old, a state official said Monday.

Lyon was killed in a land dispute with neighbor Rodney Heemstra on Jan. 13.

Last week, Heemstra, who claimed self-defense, was found guilty by a jury of first-degree murder.

The insurer, Zurich Life, wants to examine Lyon’s medical history for any conditions he did not disclose – which would allow the company to deny payment even though Lyon was shot to death.

The maneuver enrages the Lyon family attorney.

Donald Beattie, who represents widow Ronda Lyon, said Zurich Life representatives told him they wanted to determine whether there had been “material misrepresentations made on the application” for the policy. They have requested Lyon’s medical records, he said.

“This has been going on since March or April,” he said. “There’s no dispute in the case whatsoever. The man was murdered. Why do they need to know his medical background?

“What they are saying is that nobody is going to get paid until they go through every medical record in the world, and if they can find an excuse, they will not pay,” he said.

Susan Voss, deputy commission of Iowa’s insurance division, said insurance companies must pay on policies in force for more than two years.

Newer policies are subject to scrutiny.

In the case of Lyon’s policy, which is about two years old, “we don’t know any reason why Zurich Life hasn’t paid,” Voss said Monday.

“Was this a suspicious death? He was shot,” said Voss.

She said her office has offered to contact Zurich Life on behalf of the family “to see what the issues are.”

Beattie said Lyon’s medical records, sought by Zurich Life, have been sealed by District Judge William Joy.

The order prevents any examination of the records without the court’s approval.