STORY FROM: Reinsurance & Arbitration
Insurers Accused of Hiding Financial Conflict of Interest from Plan Participants
June 20, 2019
BOSTON — A Boston man seeking long-term disability benefits has accused two insurers of violating the Employee Retirement Income Security Act by failing to disclose their reinsurance relationship with one another to plan participants.
In a complaint filed June 14 in the U.S. District Court for the District of Massachusetts, the plaintiff says the insurers are parties to a reinsurance agreement pursuant to which one of them assumes 60 percent of the risk and receives 60 percent of the policy premiums.
In 1998, Standard Insurance Co. agreed to administer certain Northwestern Mutual Life Insurance Co. (NML) group disability products. ...