Cigna Has Continued its Battle for Coverage of ERISA Class Action

Cigna has continued its fight for coverage again urging the Pennsylvania Superior Court to overturn a decision that let its excess insurers off the hook over an ERISA class action brought by the company’s employees. The dispute centers on changes to the benefit plan, which U.S. District Judge Janet Arterton’s 2012 decision found had been fraudulently altered. Cigna argues that this finding does not qualify as a fact finding, and that the fraud exemption was inaccurately applied. Cigna’s argument has been that the finding relied upon was nothing more than the use of the term “fraud” in the court’s 2008 decision which it argues has no value here as a liability finding and is otherwise dicta. The Insurers position is that there was a “final judgment” and a fact finding, that Cigna’s conduct was “deliberately fraudulent” and thereby triggered the application of the fraud exclusion. The coverage dispute stems from an underlying lawsuit in which Cigna employees sued the company in 2001 after it altered its traditionally defined benefit plan to become a cash benefit plan. The employees claimed that the altered plan was not properly noticed to the employees and that under the new terms, less favorable benefits would be provided.

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