Calif. insurers win suit over ERISA preemption. (Employee Retirement Income Security Act)

National Underwriter Life & Health-Financial Services Edition, January, 1989 by Haggerty, Alfred

Calif. Insurers Win Suit Over ERISA Preemption

Insurers have won another round in their battle to establish that state unfair claims practices laws and the punitive damage suits they spawn are preempted by ERISA.

The California Supreme Court ruled 5-2 that workers dissatisfied with group health plan benefits can sue only under the 1974 Employee Retirement Income Security Act, which allows recovery of only the benefits in question and legal costs.

On the other hand, California's unfair claims practices act exposes insurers to multi-million-dollar punitive damage awards.

The California ruling in the case of Joseph V. Juliano vs. Commercial Life Ins. Co., follows a unanimous decision upholding the ERISA preemption last October by the...

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