Otte v. Life Insurance of North America (1st Cir. (Mass.), November 14, 2011)
This case involves the certification of a class of plaintiffs numbering from 90,000 to 120,000, all of which participated in employer sponsored life insurance plans governed by ERISA. The insurers seek to decertify the class claiming that the plan terms of each life insurance policy are materially different and must be considered on a case by case basis. The dispute is over the payment of death benefits into a retained asset account, which earned interest on deposited funds constitutes a per se violation of ERISA. The plaintiffs claim that the payment of benefits into a retained asset account violates the provision of the statute requiring that plan fiduciaries discharge their duties with respect to ERISA plans solely in the interests of the plans’ participants and beneficiaries. Further, the statute prohibits plan fiduciaries from dealing with plan assets in their own interest or for their own account. The district court certified the class finding that the claims relate not to the language of the plans, but rather, the insurers’ use of the plan proceeds for their own personal benefit.