Not what you're
looking for? Try an advanced search.
Buy This Entire Record For
GALLIEN v. CONNECTICUT GEN. LIFE INS. CO.
February 8, 1996
ADELE GALLIEN, Plaintiff, against CONNECTICUT GENERAL LIFE INSURANCE COMPANY and CAREY ENERGY CORPORATION, Defendants.
The opinion of the court was delivered by: GRUBIN
REPORT AND RECOMMENDATION TO THE HONORABLE SHIRLEY WOHL KRAM
SHARON E. GRUBIN, United States Magistrate Judge:
Under the Plan, Connecticut General agreed to provide coverage to Carey's employees for group term life insurance, group accidental death and disability insurance, New York disability insurance and group medical expense insurance. For coverage for group life and accidental death and disability benefits, Carey was obligated to pay monthly "traditional and residual premiums." The medical expense policy was funded through a program that Connecticut General called its Cash Management Program ("CMP"), which featured a "cash flow" option under which Carey was permitted to hold a portion of the premiums until the termination of the Plan. Under the CMP, Carey was obligated to pay a monthly residual premium to cover estimated expenses and to deposit funds upon request, up to a maximum monthly amount, into an account out of which Connecticut General had the authority to write checks for claim payments. Carey was also obligated to pay a deferred supplemental premium, the amount of which was to be calculated according to paragraph 16(b) of a CMP "Rider Form GM 2554" attached to the parties' original agreement. Paragraph 16 provided that the following sums were to become "immediately due" upon termination of that rider:
a. All unpaid monthly premiums; and
b. The excess, if any, of:
(1) The sum of the Maximum Monthly Payments for each of the Policy Months in the last Policy Year, over
(i) all Plan Benefits the Employer has paid with respect to such Policy Year; and
(ii) all Plan Benefits unpaid at the time of such termination, which the Employer is (at the time of such termination) obligated to pay with respect to such Policy Year.
Pursuant to the Supplemental Plan executed two years after the original agreement, a supplemental premium was nominally due each month but was "waived contemporaneously with a subsequent Supplemental Premium becoming due," and the supplemental premium outstanding at the termination of the Agreement was payable on the date of termination. The Supplemental Plan set forth the following new formula for calculating the "Supplemental Premium":
(a) An amount equal to the estimated liability for incurred but unreported claims at the close of the preceding policy year (being $ 264,454 as of October 1, 1988); PLUS
(b) the unpaid portion, if any, of the Maximum Monthly Payments from October 1, 1988 to the date as of which item (a) is revised.
The Supplemental Plan further provided that "by use of this formula, the amount described in paragraph 16(b) of the CMP Rider Form GM2554 ...
Buy This Entire Record For