OK To Nix Insurance Discretionary Clauses: 9th Circ.

Law360, New York (October 27, 2009, 7:59 PM EDT) -- A federal appeals court ruled Tuesday that the state of Montana's practice of disapproving insurance policies with clauses vesting discretion in insurers does not violate the Employee Retirement Income Security Act.

A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit handed down the affirmation of a district court's judgment against an insurer that had sued Montana's insurance commissioner over the policy.

Montana requires its commissioner of insurance to disapprove any insurance form if the form contains any inconsistent, ambiguous or misleading clauses,...
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