Opinion ID: 201501
Heading Depth: 3
Heading Rank: 1

Heading: Conflict Based on Status

Text: 28 Turning first to Wright's structural conflict of interest claim, the district court concluded that, although Hartford clearly had a financial incentive to maximize profits with respect to the LTD Plan, which it fully insured, the potential that it would deny claims based on self-interest was not alone sufficient to alter the standard of review. See App. at A89. Under the law of this Circuit, [t]he fact that [ ] the plan administrator [ ] will have to pay [the plaintiff's] claim[] out of its own assets does not change [the arbitrary and capricious] standard of review. Glista v. Unum Life Ins. Co. of Am., 378 F.3d 113, 125-26 (1st Cir.2004) (noting that simply because a plan administrator has to pay a claim does not deprive the administrator of discretion when the terms of the plan grant discretion); see also Doe v. Travelers Ins. Co., 167 F.3d 53, 57 (1st Cir.1999); Doyle, 144 F.3d at 184. 29 In Pari-Fasano, the Court acknowledged that an insurer does have a conflict of sorts when a finding of eligibility means that the insurer will have to pay benefits out of its own pocket, but determined that the market presents competing incentives that substantially minimize the apparent conflict of interest. 230 F.3d at 418. In Doyle, the Court identified the competing incentives, explaining that employers have benefit plans to please employees and, consequently, will not want to keep an overly tight-fisted insurer. 144 F.3d at 184. Thus, according to the Court, an insurer could hardly sell policies if it is too severe in administering them. Doe, 167 F.3d at 57. 30 Wright acknowledges this precedent but argues that the rationale relied upon in these decisions overstates the ability of market forces to minimize the apparent conflict. The district court similarly was troubled by what it deemed the false premise that an ERISA plan administrator that also has a financial stake in the benefit decisions can act as a disinterested trustee. Bound by well-established precedent, however, the court properly declined to apply a less deferential standard due to the alleged structural conflict. 5