Reinsurance Provider Must Pick Up Claim Obligations for Defunct Self-Insured Employer

The Massachusetts Appeals Court last week ruled that a reinsurance provider for a self-insured employer cannot contractually limit its liability for benefits to an injured worker if the employer runs out of assets to pay the compensation owed to its employee. In Robert Janocha’s Case, the court said reinsurance providers have a statutory duty to make sure the payments to a worker do not lapse, so the ACE American Insurance Co. had to pick up the tab for his benefits. Janocha had worked as a maintenance mechanic for Malden Mills Industries, a self-insured employer. Under Massachusetts ...