Western District of Louisiana Dismisses Life Insurer After Finding No ERISA Plan and No Plan Administrator Liability

In Aikens v. Colonial Life & Accident Insurance Co., No. CV 24-0580, 2025 WL 3554622 (W.D. La. Dec. 11, 2025), the U.S. District Court for the Western District of Louisiana granted summary judgment in favor of a life insurer, holding that ERISA did not govern the disputed policy and that the insurer could not be treated as an ERISA plan administrator subject to statutory penalties. Because the insurer properly interpleaded the policy proceeds and faced competing claims, it was discharged as a disinterested stakeholder.

Background

Colonial Life issued four individual term life insurance policies to individuals associated with a lawn service business, with each policy naming the business as beneficiary and reflecting equal ownership interests among the insureds. After one insured died, questions arose concerning ownership of the business, beneficiary status, and potential disqualification under Louisiana’s slayer statute. The plaintiff, proceeding pro se, initially sought payment of benefits and later amended his complaint to assert ERISA document-production violations, seeking over $35 million in statutory penalties.

In response to the competing claims, Colonial Life filed an interpleader action and deposited the full $250,000 policy proceeds into the court’s registry, while denying that ERISA applied or that it acted as a plan administrator.

The Court’s Decision

Interpleader Was Properly Invoked

The court first addressed whether Colonial Life properly invoked interpleader. It concluded that the insurer faced real and substantial competing claims to a single, definite fund. The underwriting materials reflected a business owned equally by four individuals, while the plaintiff later claimed sole ownership based on an earlier assumed-name filing. This inconsistency alone created adverse claims to the proceeds.

In addition, the final death certificate listed the manner of death as homicide, and the record reflected that the plaintiff had been publicly linked to the circumstances of the insured’s death. The court explained that if the plaintiff were ultimately found to have participated in the killing, Louisiana’s slayer statute could bar recovery, further exposing Colonial Life to multiple, conflicting claims. Because Colonial Life deposited the full policy amount into the registry, interpleader was appropriate to protect it from multiple liability.

The Policy Was Not Governed by ERISA

The court next considered whether the life insurance policy was governed by ERISA, emphasizing that the plaintiff bore the burden of establishing the existence of an ERISA plan. Applying Fifth Circuit precedent, the court examined whether an employer established or maintained an employee welfare benefit plan.

The court found no evidence that any employer created, sponsored, or administered an ERISA plan. Instead, the record showed four individual life insurance policies purchased by individuals associated with a business, each naming the business as beneficiary. Under either version of ownership advanced by the plaintiff—sole ownership or equal co-ownership—the arrangement failed to satisfy ERISA’s requirement that an employer establish or maintain a plan for the purpose of providing benefits to employees. As a result, the court held that ERISA did not apply.

Colonial Life Was Not a Plan Administrator

Even assuming ERISA applied, the court concluded that Colonial Life was not a plan administrator subject to ERISA’s document-production penalties. ERISA defines a plan administrator as the entity designated in the plan documents, or, absent such designation, the plan sponsor. The record contained no evidence that Colonial Life was ever designated as plan administrator, nor did it qualify as a plan sponsor under ERISA’s statutory definitions.

The court rejected the plaintiff’s argument that Colonial Life became a plan administrator through its conduct, including communicating with claimants and processing claim-related materials. Citing Fifth Circuit authority, the court reiterated that insurers do not become “de facto” plan administrators merely by administering claims or exercising discretionary authority. Accordingly, even if an ERISA plan had existed, Colonial Life could not be held liable for statutory penalties under § 1132(c).

Court’s Disposition

The court granted Colonial Life’s motion for summary judgment, dismissed all claims against the insurer with prejudice, and discharged it as a disinterested stakeholder after interpleader of the full policy proceeds. The insurer’s pending motion for default judgment against a competing claimant was denied as moot.