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From Roger Baron: SDNY holds SPD provision not enforceable under Cigna v Amara

Reprinted with permission from Roger Baron

In Durham v. Prudential Insurance, 2012 WL 3893604 (S.D.N.Y. Aug. 28, 2012), the Court was requested by the ERISA Insurer to uphold the “discretionary clause”  of the SPD, but the plan document did not contain a “discretionary clause.”  This Court applied the Supreme Court’s ruling in Cigna v. Amara and held that “the SPD cannot confer discretion.  Accordingly, the appropriate standard of review is de novo.”  This opinion provides as follows:

Prudential argues that the SPD should be considered in determining the standard of review. The SPD’s language is clear about Prudential’s discretion. However, the Supreme Court recently held that “statutorily required plan summaries (or summaries of plan modifications)”—like the SPD—may not be enforced as if they are the terms of the plan itself. CIGNA Corp. v. Amara,131 S.Ct. 1866, 1877 (2011).

Prudential suggests that the SPD nonetheless should be considered part of the Plan because it is contained in the same bound booklet as the Group Insurance Certificate. “However, an insurer is not entitled to deferential review merely because it claims the SPD is integrated into the Plan. Rather, the insurer must demonstrate that the SPD is part of the Plan, for example, by the SPD clearly stating on its face that it is part of the Plan. A contrary decision would undermineAmara.” Eugene S. v. Horizon Blue Cross Blue Shield of N.J., 663 F.3d 1124, 1131 (10th Cir.2011). Here, the SPD expressly provides that it is not part of the Group Insurance Certificate.

To view the opinion, click HERE

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