Illinois Ban On Discretionary Clauses Not Preempted By ERISA, Federal Judge Rules

CHICAGO - Employee Retirement Income Security Act (ERISA), 29 U.S.C.S. § 1001 et seq. does not preempt an Illinois regulation prohibiting discretionary clauses in insurance contracts, a federal judge in Illinois ruled Nov. 29, concluding that the appropriate standard of review of a decision to terminate disability benefits was de novo even though the plan granted the fiduciary discretion to award benefits (Michael Ehas v. Life Insurance Company of North America,  No. 12 C 3537, N.D. Ill.; 2012 U.S. Dist. LEXIS 169151).

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