A Maryland administrative law judge ruled against a woman seeking death benefits for her son from Primerica Life Insurance Co.

Administrative Judge Neile S. Friedman ruled that Primerica and Latarsia Gray, its agent who was also named in the complaint, did not use unfair settlement claims practices when it denied the death benefits to Lorna Callum, whose son, Shawn Peterking, died in May 2008, according to Maryland Insurance Administration records.

On Aug. 7, 2006, Callum completed information for an application for term life coverage for herself and her three children in a meeting with Latarsia Gray and Christopher Gray, business partners. As part of the application service for a “Children’s Term Rider” for each of her children, Callum told the Grays that none of her children had used illegal or illegally obtained drugs, been arrested on drug- or alcohol-related charges, been convicted of a felony or been incarcerated for any criminal offenses. Christopher Gray, according to testimony, recorded Callum’s response on the application, which Callum signed.

Policy stipulations

As part of the application, Callum signed that if the insurer discovered within two years of the policy issue date that any of the application information was found to be false, incomplete or incorrect that it could lead to the policy being voided.

Records show that Shawn Peterking pleaded guilty to possession of marijuana in August 2004; was convicted of first-degree burglary in April 2005; was convicted of resisting arrest and imprisoned for six months in November 2005; was convicted of disturbing school operations in November 2004; and appeared in court numerous times in the five years prior to the term insurance application’s filing.

On June 17, 2008, Callum filed for the term benefits for her son. The benefits were denied because the application information was inaccurate.

This story originally appeared in the December 2009 print edition of Insurance & Financial Advisor.