It was an eclectic week on the insurance and ERISA front, at least in my feed. Eclectic, but fascinating. I read at least ten articles this week that could have warranted blog posts all their own, but here are the five that made it, in shorter form, into this week’s Five Favorites for Friday.
- Forfeitures are having their day in the sun, with oral argument at one appellate court, a trial ruling adverse to participants claiming losses from forfeitures in a federal district court, and still another appellate bench upholding a dismissal against the plan participant for lack of standing. This write up will tell you, if you are late to this particular party, what this issue really is and what these cases are about, as well as why some courts – including now the Eighth Circuit – don’t believe that plaintiffs can show standing in these types of cases. (I could write a law review article on the question of how standing, civil procedure and ERISA intersect, and as to whether courts are right or not in this regard, but this isn’t the time or place for it – but if you want to hear me hold forth on this issue, feel free to reach out and I will be happy to jump on a call).
- I have written many times on the bad faith risks that insurers may face from relying on or utilizing AI in claims handling. Here’s one example. I have extensive experience litigating Chapter 93A and bad faith claims handling cases in Massachusetts and it’s easy to see how someone should prosecute or defend those types of cases once AI is added in as a new ingredient. This post is a nice reminder that state legislatures are weighing in on exactly this issue, and that their skepticism about the use of AI in this context needs to be accounted for by insurers, both in the claims handling itself and in defending claim decisions after the fact and in court.
- You know what’s always big news? Withdrawal liability and union pension plans. You want to know why? Because the statute that governs it combined with the reality of union plans consistently makes this issue about big money. Here’s a story about a brand new Supreme Court decision on the calculation of those amounts. What’s most interesting to me about it, however, is that, as the article points out, the decision allows actuarial flexibility in determining the amount at issue. Courts have always seemed reluctant to me to get into the nitty gritty of actuarial determinations, and over the years have often seemed to adopt rules that reduce the need to do that – this is certainly one with that theme.
- There’s multiple books worth of thoughts to be written about how AI and insurance coverage should coexist – or whether they even should. This podcast by Kevin Szczepanski is a good addition to the topic. Although it’s titled as focusing on exclusions for AI, it branches off into broader topics of coverage for AI exposures, including whether there should be any and, if so, how will it be cabined.
- I have frequently advocated for ERISA plan sponsors and their insurers to take more class action breach of fiduciary duty cases to trial for multiple reasons, including that the defense will do better than plan sponsors, their lawyers and their insurers often assume, and that trying more cases (rather than motion practice, discovery and settlement) will deter the filing of many of the cases. Here is a great blog post making the exact same case with regard to securities class actions, and citing evidence that trials can run just as easily in favor of the defense as the plaintiff class in that context as well.