Trusts and Estate Litigation

We represented an insurance company in a class action. The company had issued a group policy to a major company which paid for coverage of its employees. The policy allowed employees at their option to purchase by payroll deduction additional life insurance. The policy made provisions for a claim stabilization reserve to be determined and held by the insurer. The employer had substantial downsizings. Then it decided to terminate the group policy. As provided by the policy, the insurer paid the employer tens of millions of dollars of the reserve, which it judged would no longer need to be held. The employer distributed the returned reserve to persons who were still its employees on the date it decided to terminate the policy. The insurer continued to hold some of the reserve, any unused portion of which it intended to release to the employer policyholder as the insured risks abated. A class action was brought by former employees who had paid premiums for the optional coverage, but who were no longer working for the employer at the cutoff date. They sued the employer, the plan administrator and our client insurance company, claiming that all such employees had contributed to the reserve and were getting no benefit from its return, that the reserve was excessive and should have been returned sooner, and that the premiums for the optional coverage were discriminatorily high. After we moved for summary judgment a settlement was achieved and approved by the court under which the class was certified but our client was to pay only what, and when, it had intended to pay from the reserve irrespective of the lawsuit. Our client was awarded and collected attorneys fees.