Life Insurance

News & Analysis as of

Insurance Industry Sweeps Retained Asset Account Doubleheader

On August 26, the U.S. Court of Appeals for the First Circuit held in Vander Luitgaren v. Sun Life Ass. Co. of Canada, No. 13–2090, 2014 WL 4197947 (1st Cir. Aug. 26, 2014), that an insurer, acting as a claims administrator,...more

District Courts Reviewing ERISA Cases Under the Arbitrary and Capricious Review Standard Serve Only in an Appellate Role

In McCorkle v. Metro. Life Ins. Co., 13-30745, 2014 WL 2983360 (5th Cir. 2014), the Fifth Circuit reversed the district court’s holding that MetLife’s adverse determination regarding the plaintiff’s claim for benefits due to...more

Employers Should Monitor Closely Group Term Life Insurance Enrollments

Many employers offer group term life insurance, including supplemental life. Often an employee who wants to buy coverage above a particular level after an initial open enrollment period must show evidence of insurability....more

Florida DFS Unclaimed Property Grab “Clearly Erroneous”

Florida’s First District Court of Appeal filed an opinion yesterday in Thrivent Financial for Lutheran’s appeal from a declaratory statement issued by the Florida Department of Financial Services interpreting Florida’s...more

Florida Court Rejects "Date of Death" Trigger for Escheating Life Insurance Death Benefits Under Florida's Unclaimed Property Act

On August 5, Florida's First District Court of Appeal reversed a ruling issued by Florida's Department of Financial Services ("DFS") that would have triggered an insurer's duty to escheat life insurance benefits under...more

Unclaimed Property: Court Holds Life Insurer’s Escheatment Duties Not Triggered By Insured’s Death

In an opinion filed August 5, 2014, the Florida First District Court of Appeal held that under Florida’s unclaimed property law, life insurance proceeds are not “due and payable,” and the dormancy period does not begin to...more

ERISA: 6th Circuit — Benefit Denial Letters: Include The Time Limit For Judicial Review Or Lose Contractual Limitations Defense

Does your ERISA claim benefit denial letter preserve the contractual limitations defense? If your denial letter fails to expressly state the contractual limitations timeframe, it might not preserve that defense. ...more

Florida Court of Appeal Holds Insured’s Death Alone Does Not Trigger Unclaimed Property Law Obligations

In an opinion filed August 5, Florida’s First District Court of Appeal held that Florida’s unclaimed property law does not make life insurance proceeds due and payable at the time of the insured’s death and does not impose an...more

Fiduciary Notice Obligations Associated with Change of Carriers

This case discusses the fiduciary obligation of plan administrators to inform participants in advance of ERISA’s statutory notice periods regarding the potential impact caused by a change of life insurance carrier under a...more

Convictions of Life Insurance Producers for Mail and Wire Fraud Result in Lengthy Sentences and Millions in Restitution

Earlier this week, the United States District Court for the Southern District of New York sentenced Michael Binday, James Kergil, and Mark Resnick, and ordered the payment of millions of dollars in restitution. The sentencing...more

The Latest on the Use of Retained Asset Accounts to Pay Life Insurance Benefits

In Merrimon v. Unum Life Insurance Co. of America, 2014 WL 2960024 (1st Cir. July 2, 2014), the U.S. Court of Appeals for the First Circuit became the third circuit court to approve an insurance company’s use of a retained...more

Fourth Circuit Rejects Widow’s Claim for Equitable Relief

The Fourth Circuit recently rejected fiduciary breach and equitable estoppel claims for life insurance coverage by Leslie Moon, the widow of a deceased employee, who claimed that the employer’s actions resulted in Mr. Moon’s...more

Plan Sponsor Should Avoid These Retirement Plan Provider “Con Games”

The George Clooney-Brad Pitt trilogy of heist films known as Ocean’s Eleven, Ocean’s Twelve, and Ocean’s Thirteen were remembered for their twist endings, stylish pacing, and lightheartedness. Since the Ocean gang were...more

How to Fight a STOLI Scheme: Court Rulings Offer Clues

Two recent court decisions provide potential road maps for insurers in the fight against Stranger-Originated Life Insurance (STOLI) schemes. Ohio Nat’l Life Assurance Corp. v. Davis involved a STOLI scheme so obvious that...more

Harsh Justice

Concerned that its own decision might have "the potential to conflict" with that of the Pennsylvania Insurance Department, a Pennsylvania federal court relied on the primary jurisdiction doctrine to dismiss a putative class...more

First Circuit Finds for Life Insurer in ERISA Class Action Challenging Retained Asset Accounts to Pay Life Insurance Benefits

In a unanimous panel decision, the U.S. Court of Appeals for the First Circuit reversed a trial court’s ruling that the defendant, Unum Life Insurance Company of America (Unum), had breached fiduciary duties under the...more

First Circuit Upholds Use of Retained Asset Accounts in ERISA Class Action

On July 2, 2014, a unanimous panel of the United States Court of Appeals for the First Circuit held that Unum Life Insurance Company’s practice of using Retained Asset Accounts (RAAs) to pay death benefits claims on group...more

Unethical Companies Capitalizing on Employee Deaths: Protect Your Reputation with Compliance Training

It came as sort of a shock to me the other day when I came across the article in Fortune titled, “The many ways companies profit from hastening employees’ deaths.” What I took away from it was that companies are taking out...more

Idaho Unclaimed Property Rule: Insurers Must Confirm Whether Insureds Have Died

In a recently issued notice of rulemaking, the Idaho State Treasurer’s Office has proposed a temporary rule that, if permanently adopted, would alter two key definitional provisions in the state’s unclaimed property laws...more

"The Estate Planner" – July/August 2014

In this issue: - Net Gain For Taxpayers – Tax Court Approves Net Gift Strategy - Estate Planning For The Young And Affluent – How To Hedge Your Bets - Wealth Preserver – Use An ILIT To Shield Life...more

The California Supreme Court Agrees with Frankie Valli: “Big Girls Don’t Cry”

In an echo of the famed singer’s long-ago hit, Frankie Valli’s former wife may be crying, as she lost her bid to deny Frankie his community property interest in a life insurance policy. Imagine, paying the premiums on a...more

Protecting the Financial Services Firm as a Stakeholder: the Interpleader Action Defined (Part 1)

Financial services firms oftentimes can find themselves in the unenviable position of being in the middle of a dispute over money or property held by their clients. If two or more parties assert competing claims to the...more

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...more

CFTC Issues No Action Letter On Application Of Swap Rules To Longevity Reinsurance Transaction

There has been considerable concern in the insurance and reinsurance industries that certain hedging and reinsurance activities that companies have engaged in for a number of years, particularly with respect to life insurance...more

Equitable Surcharge Awarded to Life Insurance Plan Beneficiary

A federal district court in California awarded relief in the form of surcharge to a life insurance plan beneficiary who claimed that a plan administrator failed to provide complete and accurate information in response to...more

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