Yet Another Decision On The Availability of Equitable Surcharge

A district court in Pennsylvania concluded that a decedent’s life insurance plan beneficiaries were entitled to equitable surcharge where the plan administrator failed to, among other things, inform the decedent about the need to convert her group policy to an individual policy. Weaver Brothers Insurance Associates, Inc. v. Braunstein, 2014 WL 2599929 (E.D. Pa. June 9, 2014). This ruling and others like it (as reported on here) stand in contrast to a ruling in the Ninth Circuit (as reported on here) that surcharge was not an appropriate remedy where a plan stopped paying a participant pension benefits that it had mistakenly advised him that he was entitled to, based on a narrower construction of the scope of surcharge relief following the Supreme Court’s decision in Amara v. Cigna. As the number of post Amara claims for equitable surcharge make their way through the courts, we are likely to see an uptick in the number of decisions on this issue.

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.

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