Insurers May Be Sued Directly Under ERISA


On June 22, 2011, the Ninth Circuit Court of Appeals issued its long awaited en banc decision in Cyr v. Reliance Standard Life Insurance Company with the expected result: a claimant may sue an insurer directly under ERISA section 1132(a)(1)(B) for unpaid benefits.

Laura Cyr received long term disability benefits under an ERISA plan from Reliance due to a back condition that allegedly prevented her from working. While on disability she sued her employer and ultimately entered into a settlement in which her salary was retroactively adjusted upwards. When the insurer did not increase her monthly LTD benefit (which was based upon a percentage of her pre-disability income), Cyr filed suit against the insurer, the Plan, and the employer as plan administrator for benefits under 28 U.S.C. Section 1132(a)(1)(B), as well as equitable estoppel and breach of fiduciary duty under Section 1132(a)(3). The district court ruled for Cyr on the benefit claim, and Reliance appealed on a number of grounds.

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