More on Plan Drafting

On September 1, the ERISA and Disability Benefits Law Blog posted and excellent write-up of Ushakova v. AIG Life Ins. Co., 2006 WL 2473473 (W.D. Wash. 8/26/06). The District Court concluded that a claim for benefits was reviewable de novo because the plan documents contained no language specifically granting discretion to the plan administrator. Instead it required that the claimant provide "due written proof of the loss."

The case is certainly another instance of courts resisting the application of the Supreme Court's "arbitrary and capricious" standard of review. There are now so many of these cases that one has to assume that a court will always look far a way to apply some lower standard.

The case is also yet another reminder that plans need to be better written than is the norm today. It is very simple to include language that the plan (to paraphrase Firestone Tire and Rubber v. Bruch, 489 U.S. 101 (1989) that the plan gives the administrator discretionary authority to determine eligibility for benefits and to construe the terms of the plan. All plans, whether they are subject to ERISA or not, should do so loudly and clearly.