Please ensure Javascript is enabled for purposes of website accessibility

00-2360 Midwest Community Health Service, Inc., et al. v. American United Life Insurance Co.

By: dmc-admin//June 25, 2001//

00-2360 Midwest Community Health Service, Inc., et al. v. American United Life Insurance Co.

By: dmc-admin//June 25, 2001//

Listen to this article

“Section 401(c)(5) provides:

‘No person shall be subject to liability under this part [for breach of ERISA fiduciary duties] for conduct which occurred before [December 31, 1998] on the basis of a claim that the assets of an insurer (other than plan assets held in a separate account) constitute assets of the plan. …’ 29 U.S.C. sec. 1101(c)(5)(B). Here, the appellants’ claim is not premised on a finding that assets of AUL held in AUL’s general account are assets of the plan. Instead, the basis of the appellants’ claim is that AUL failed to disclose the amount of the investment liquidation adjustment if they cashed out instead of converting and that the package of rights under the IHA Contract (with the potentially positive investment liquidation adjustment) was more valuable than the package of rights provided under the AUL-Star Contract. Unlike the cases relied upon by AUL, the appellants are not claiming that AUL misappropriated or illegally converted the funds deposited under the group annuity contract. Cf. Adkins, 957 F. Supp. at 212 (plaintiffs claimed insurer mismanaged or misappropriated pension plan assets); Tool, 957 F. Supp. at 1116 (plaintiffs claimed insurer stole pension plan contributions). Therefore, where AUL held the funds supporting the IHA Contract, i.e., in its general account or in a separate account, is irrelevant because the appellants’ claim has nothing to do with the (mis)management of the funds.”

Reversed and remanded.

Polls

Should Steven Avery be granted a new evidentiary hearing?

View Results

Loading ... Loading ...

Legal News

See All Legal News

WLJ People

Sea all WLJ People

Opinion Digests