There was a tremendous amount of excellent media to read, watch or listen to this past week concerning insurance and ERISA issues. I am hitting five of my favorite ones in today’s post, starting with one from my favorite newspaper.
- A couple of weeks ago, writing about the relationship of insurance to shipping through the Strait of Hormuz, I referenced Lloyd’s of London’s history with risk and with shipping, calling it the Indiana Jones, in popular imagination, of maritime risk. And true enough, as this article explains, even now Lloyd’s will insure shipping risks in the Middle East, but at historically high rates. However, of more significance appears to be the lack of appetite of the insureds themselves for the risk, with or without insurance cover. It’s a good reminder that no matter how important insurance is, it’s not supposed to be the tail that wags the dog, but just the tail. (That last comment is a deliberate insurance pun).
- There is absolutely no question that the future will (and to some extent the present already does) involve using AI for claims processing. Insurance, including claims handling, is so innately an information and data intensive business that it is inevitable. But as I have written before, AI in claims handling is going to pose litigation and liability risks for insurers, including potential bad faith exposure. Take Massachusetts law, for instance, where settlement offers have to be both reasonable and based on reasonable investigation, at the risk of potentially significant statutory damages. It’s very easy to see how lawsuits could be constructed that AI usage in determining a settlement offer or investigating a claim violated one or both requirements, simply by demonstrating bias, oversight or errors either built into the software and its algorithms or as part of its application to a specific claim. And we are now, as this article shows, seeing the outlines of a discovery regime that will allow discovery into this exact topic.
- In early days, as they say, when it comes to the use of Target Date Funds in 401(k) plans, the question of whether their inclusion in plans might be a fiduciary breach was hotly debated at ERISA litigation conferences. I know, because I was there (in the audience, not as a speaker). The debate was notable just as much for the extent of polarization over the question as for the ferocity of the debate. But time went on, Target Date Funds became central to the operation of many 401(k) plans, and most people appeared to forget about the issue. Part of the plaintiffs’ class action bar clearly did not, however. The debate back then was focused on the glide paths of the funds – and the plaintiffs’ class action bar has now filed numerous ERISA breach of fiduciary duty class actions targeting that exact issue, as discussed in this article.
- This is an odd but interesting story from the ABA business section on the intersection of AI with ERISA class action litigation. There is a lot to like about it but also some underlying premises that are just plain wrong, in my opinion. The article, on the plus side, delves into the extent to which litigation against plan sponsors is hobbled and restricted to some extent by the lack of transparency in both public filings and investment products related to retirement plans. And there is some truth to this, which has been countered over the years to a significant degree only by the ever increasing knowledge base and sophistication on these issues of the better lawyers in the ERISA class action space. The article’s pitch is that AI tools can attack that problem by developing detailed evaluation of key issues despite this lack of transparency in the industry. And that may very well be right. But on the negative side of the ledger with regard to this article is its fundamental premise that plaintiff friendly precedents are making it ever easier to bring these types of suits, which I wouldn’t agree with for a second. From class action rulings that make it harder to certify a class, to standing decisions that make it harder to get out of the blocks with a case, to benchmarking disputes, the most important recent decisions are running against the plaintiffs’ class action bar right now. Regardless, the article is a good read.
- Well, there is thought leadership and then there is thought leadership writ large. I really like Duane Morris’ ERISA Class Action Review 2026, which was just released. I read a lot of the ERISA publications issued by the large class action defense firms and this one is a cut above almost all of them. What I really like about it isn’t just its comprehensive review of the key decisions to date but that it also discusses in depth where this area of litigation is going from here. Don’t miss the summary and chart discussing the largest settlements of 2025 either – you can draw a lot of conclusions and thoughts on settlement and liability issues if you think carefully about that data.