Legal Alert: Retained Asset Account Litigation—Summary Judgment Entered for MetLife

On March 8, 2013, the U.S. District Court for the District of Nevada, Judge Larry R. Hicks presiding, granted the defendant - insurer’s motions for summary judgment in the consolidated, putative class actions, Keife v. Metropolitan Life Insurance Company , No. 3:10 - cv - 0546 - LRH - VPC, and Simon v. Metropolitan Life Insurance Company , No. 3:10 - cv - 0916 - LRH - VPC. (Please click here for the opinion.) Sutherland was MetLife’s trial counsel in the consolidated cases.

Plaintiffs were beneficiaries under the Federal Employees’ Group Life Insurance (FEGLI) Policy, pursuant to which MetLife provided life insurance to civilian employees of the federal government. Plaintiffs alleged that, by establishing retained asset accounts (called Total Control Accounts) to pay life insurance proceeds to beneficiaries and investing the funds backing those accounts in its general account, MetLife breached the FEGLI Policy’s requirement that MetLife make “payment” to beneficiaries “immediately” and in “one sum.” Plaintiffs argued that MetLife was required to issue beneficiaries a single check for the total amount of their life insurance proceeds. MetLife countered that it satisfied the FEGLI Policy’s requirement to make “payment” of life insurance proceeds “immediately” and in “one sum” when it established an interest - bearing account in the beneficiary’s name, credited the account with the entire amount of life insurance proceeds (and interest) owed to the beneficiary, and provided the beneficiary with a “checkbook” to draw on the account up to the full balance at any time.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Topics:  Federal Employees, Insurers, Life Insurance, MetLife, Retained Asset Accounts, Summary Judgment

Published In: Civil Procedure Updates, General Business Updates, Finance & Banking Updates, Insurance Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sutherland Asbill & Brennan LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »