Employee Benefits Developments For July 2008

Qualified Retirement Plans

The U.S. Supreme Court (Court) ruled that insurers that fund benefits and decide benefit claims have a conflict of interest that reviewing courts must consider as a factor in deciding whether the insurer has abused its discretion in denying a claim for benefits. Metropolitan Life Insurance Co. v. Glenn (2008, S.Ct.), 2008 WL 2444796. The case involved a claim for disability benefits where the benefits were insured and claims for benefits were finally determined by MetLife. The Court relied on its earlier decision in Firestone Tire & Rubber v. Bruch, 489 U.S. 101 (1989), in which it held that where an administrator or fiduciary vested with discretionary authority has a conflict of interest, the conflict must be weighed as a factor in determining whether there has been an abuse of discretion. The decision does not provide specific guidance on how such a conflict of interest is