Luitgaren v. Sun Life Assurance Co. of Canada , No. 13-2090 (1st Cir. 2014)
Annotate this CaseAt issue in this case was the fiduciary implications of a life insurance company’s decision to pay benefits through a retained asset account (RAA) that allows the insurance company to invest the retained assets for its own profit. In Merrimon v. Unum Life Insurance Co., decided also this year, the First Circuit held that an insurer, acting in the place and stead of a plan administrator, properly discharges its duties under ERISA when it pays a death benefit by establishing an RAA as long as that method of payment is called for by the terms of the particular employee welfare benefit plan. In this case, Appellant alleged that an Insurer’s use of RAAs as a method of paying death benefits transgressed its ERISA-inspired fiduciary duties. The district court granted summary judgment in the Insurer’s favor. The First Circuit affirmed largely on the basis of its opinion in Merrimon, holding that, under the circumstances of this case, the Insurer’s choice to pay by means of an RAA did not violate its fiduciary duties.
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