Jillian Redding, Esq

Abstract

This article explores the current state of ERISA law and its effects on good faith, fiduciary breaches, and available remedies. Although recent case law provides that the duty of good faith applies in an ERISA context, breaches typically result in recovery for the employee benefit plan rather than the injured participant. Courts have further held that ERISA precludes state remedies, even those specific to insurance. Part one offers an overview of ERISA and explains why state remedies or greater state oversight are necessary to protect beneficiaries. Section two discusses ERISA’s legislative background. Section three examines several cases that illustrate ERISA’s failure to provide adequate remedies for fiduciary breaches. Section four presents a case study of Unum Provident, a disability insurer whose egregious misconduct led to long-term, strict oversight by state departments of insurance. The final section reviews various scholarly theories on improving ERISA remedies and advances the author’s argument that the most effective and efficient solution is to require strict state regulatory oversight, a remedy demonstrated to be successful in the Unum Provident case.

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