The 3rd U.S. Circuit Court of Appeals recently held that a group disability insurer subject to the Employee Retirement Income Security Act (ERISA), which had denied a beneficiary’s claim, could also be sued for civil violations under the Racketeer Influenced and Corrupt Organizations Act (RICO), thereby possibly subjecting the insurer to treble damages under the RICO statute. Weiss v. First Unum Life Ins. Co., 482 F.3d 254 (3d Cir. 2007).

The U.S. District Court for the District of New Jersey had previously dismissed the insured’s RICO counts on the ground that they were barred by the McCarran-Ferguson Act, wherein Congress declared that the states had the primary responsibility for regulating the insurance industry. The District Court reasoned that the application of the RICO statute would needlessly interfere with New Jersey’s regulation of the insurance business.

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