ERISA Does Not Preempt State Law Claim Against First Allmerica Life Insurance Company and Its Agent for Misrepresentations in connection with the Establishment of Pension Plan
Insurance company agents recommended that small business owners set up defined benefit plan and represented that because the plan would be insured by the PBGC, they were guaranteed 100% of the spousal benefits promised under the plan.
After death of husband business owner, insurance agent told surviving wife to close the company and put it into bankruptcy. Surviving wife later told by PBGC that her plan benefits would be reduced because she and deceased husband were substantial owners of the business. Court ruled that wife’s state law claims for misrepresentation by insurance company and agents were not preempted by ERISA.
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