In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 02-2934

BRUCE A. WALLACE,

Plaintiff-Appellant,

v.

RELIANCE STANDARD LIFE INSURANCE CO.,

Defendant-Appellee.

____________

Appeal from the United States District Court

for the Western District of Wisconsin.

No. 01-C-714-C—Barbara B. Crabb, Chief Judge.

____________

ARGUED JANUARY 14, 2003—DECIDED FEBRUARY 4, 2003

____________

Before EASTERBROOK, RIPPLE, and ROVNER, Circuit

Judges.

EASTERBROOK, Circuit Judge. After his diabetes led

to renal failure, Bruce Wallace left his job as a manufacturer’s sales representative and began receiving disability benefits under an insurance policy provided as a

fringe benefit, and thus regulated by ERISA (the Employee

Retirement Income Security Act). A successful kidney

transplant ended Wallace’s need for dialysis. When he did

not return to work after recovering from the operation,

Reliance Standard Life Insurance Co., which underwrote

the disability insurance, cut off his benefits. Wallace sued

under §502(a)(1)(B) of ERISA, 29 U.S.C. §1132(a)(1)(B). Be-
2 No. 02-2934

cause the policy does not confer interpretive discretion on

Reliance, the district court made an independent decision

about Wallace’s eligibility. See Herzberger v. Standard

Insurance Co., 205 F.3d 327 (7th Cir. 2000). The judge

concluded that ample medical evidence (including statements by physicians releasing Wallace for work) demonstrates that he is no longer disabled, and she entered

summary judgment for Reliance. Because the district court

made a de novo determination without objection from

Reliance, this appeal is unaffected by the disagreement

between this circuit and the ninth about the consequences

of an insurer’s or sponsor’s financial interest. Compare

Perlman v. Swiss Bank Corp. Comprehensive Disability

Protection Plan, 195 F.3d 975, 980-81 (7th Cir. 1999), with

Nord v. Black & Decker Disability Plan, 296 F.3d 823, 828-

29 (9th Cir. 2002), cert. granted, No. 02-469 (U.S. Jan. 10,

2003).

Wallace does not challenge the district judge’s assessment of the medical evidence in the record. Instead he

contends that Reliance was obliged to obtain additional

medical evaluations, which would be submitted to an

independent physician for assessment. Nothing in the

policy, the employer’s plan, or the summary plan description, requires Reliance to take such steps. Nonetheless,

Wallace insists, Reliance was acting as his fiduciary, and

as his fiduciary was obliged to seek out additional evidence supporting his claim, even if (especially if) the

medical evidence he submitted was inadequate.

Yet why is Reliance a fiduciary when implementing

a contract of insurance? It has promised a particular set

of benefits, to be sure, and must act with care in fulfilling

its promises, but it did not undertake to evaluate all

claims with a thumb on the scale in the participant’s favor. Indeed, a genuine fiduciary would go to bat for Wallace as an advocate; but this is not the role Reliance

undertook to perform. Pegram v. Herdrich, 530 U.S. 211,
No. 02-2934 3

222-26, 231 (2000), holds that a health maintenance

organization (another kind of medical insurer) is not

an ERISA fiduciary to the extent that it makes decisions

about the nature of the care required under the contract.

Pre-Pegram opinions that loosely refer to medical insurers as fiduciaries are no longer authoritative (if they

ever were; the passages in the cases to which Wallace

points read like incautious dicta). Asked at oral argument what provision of ERISA turns an insurer into a

fiduciary, Wallace relied entirely on 29 U.S.C. §1104.

This section, however, specifies the duties of fiduciaries;

it does not tell us who is a fiduciary. The “who” of the

matter depends on 29 U.S.C. §1002(21)(A), which as the

Court remarked in Pegram tells us that managers, administrators, and financial advisers of pension and welfare plans are fiduciaries. Pegram concluded that a contract of insurance sold to a plan is not itself “the plan,”

so that the HMO implementing its contract is not a fiduciary. Just so, one would suppose, with a disability-insurance carrier. Cf. Rush Prudential HMO, Inc. v. Moran, 536

U.S. 355 (2002) (state regulation of an HMO providing

benefits to participants in a plan is regulation of insurance, not of the plan).

Now it is true, as we observed in Hightshue v. AIG Life

Insurance Co., 135 F.3d 1144, 1148 (7th Cir. 1998), that

when an insurer permits an independent medical evaluator to make the coverage decision, it will be hard to

show that the decision was influenced by a conflict of

interest. Contentions that insurers deny claims to save

money, and that judicial review should be more searching as a result even when the plan or policy confers interpretive discretion, are before the Supreme Court in Nord;

no such issue is at stake here, because the district judge

did not defer to Reliance’s decision but made her own.

Hightshue does not hold that an insurer must pay for

independent medical evaluations or accept their conclu-
4 No. 02-2934

sions; it gives plans an option, not an obligation. Insurers

remain free (as do judges) to resolve conflicts in the medical submissions. Their obligation is to evaluate claims

competently and dispassionately—and even that duty

plays a limited role when the judge proceeds de novo.

No case of which we are aware holds that, when a plan

participant’s own doctors opine that he is again able to

work, the insurer or plan administrator must refer the

participant to additional physicians in quest of one who

will find a disabling condition. Adding to the bureaucracy

would augment administrative costs, which in the long

run would reduce the net benefits that employees enjoy

under the plan.

AFFIRMED

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—2-4-03