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10-2112 Jackman Financial Corp. v. Humana Ins. Co.

ERISA; facility-of-payment clauses

Where a life insurance policy contained a facility-of-payment clause, it did not violate ERISA for the insurer to pay the proceeds to the insured’s children.

“Under the arbitrary and capricious standard, we overturn the administrator’s decision only where there is an absence of reasoning to support it. See Hess v. Reg-Ellen Machine Tool Corp., 423 F.3d 653, 658 (7th Cir. 2005); Tegtmeier v. Midwest Operating Engineers Pension Trust Fund, 390 F.3d 1040, 1045 (7th Cir. 2004). We apply the standard as an abuse of discretion standard. See Holmstrom v. Metropolitan Life Ins. Co., 615 F.3d 758, 767 n.7 (7th Cir. 2010). Applying that standard here, we agree with the district court that Humana’s decision to pay the proceeds of Torrence’s life insurance plan to his children was not an abuse of its discretion. The facility-of-payment clause in Torrence’s group plan provided Humana with the option of paying the life insurance proceeds to any of five named entities or groups if the named beneficiary had died. Humana did exactly that.”


10-2112 Jackman Financial Corp. v. Humana Ins. Co.

Appeal from the United States District Court for the Northern District of Illinois, Norgle, J., Hamilton, J.

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