to insurance as a business, as opposed to regulations of more peripheral administrative functions, would be unworkable. Such a distinction would promote "endless litigation" to determine what constitutes a core insurance business activity. FMC, 111 S. Ct. at 411. Thus, section 367i of the Illinois Insurance Code fits squarely within ERISA's "saving clause" and is not preempted.
But, even if the Illinois Insurance Code is not preempted, the question of ERISA's preemption of the plaintiff's claim is not disposed of. It is also necessary to determine whether, even if ERISA does not preempt a state regulation as a whole, it preempts the remedies available to an ERISA plan beneficiary. ERISA does expressly provide various civil enforcement measures. Under Title 29 U.S.C. § 1132 a plan participant or beneficiary may sue to recover benefits due under the plan, to enforce the participant's rights under the plan, or to clarify rights to future benefits. Relief may take the form of accrued benefits due, a declaratory judgment on entitlement to benefits, or an injunction against a plan administrator's improper refusal to pay benefits. In Pilot Life, the Supreme Court wrote broadly that this civil enforcement scheme was exclusive. Pilot Life, 481 U.S. at 54. But, as mentioned above, Pilot Life involved only a common law cause of action against an insurer, so it was left unclear if ERISA's remedies were exclusive in all cases.
The current case presents the Court with the prodigy of FMC and Pilot Life. On the one hand, FMC allows for a fairly broad range of state insurance regulations like the one relied upon here. On the other hand, Pilot Life recognizes exclusive ERISA remedies in common law suits for failure to pay insurance benefits. In this case, then, the Court must determine what remedies are available to an ERISA plan beneficiary who alleges the violation of a permissible state regulation of insurance.
The broad language of Pilot Life suggests the total preemption of state remedies by ERISA's enforcement provisions. The Court wrote, "The deliberate care with which ERISA's civil enforcement remedies were drafted and the balancing of policies embodied in its choice of remedies argue strongly for the conclusion that ERISA's civil enforcement remedies were intended to be exclusive." Id. There is nothing in this reasoning to suggest a different level of preemption of remedies for a statutory claim as opposed to a common law claim. Lower court decisions have adopted this reading of Pilot Life. In Buehler Ltd. v. Home Life Ins. Co., 722 F. Supp. 1554, 1562 (N.D.Ill. 1989), this Court conceded that section 155 of the Illinois Insurance Code was a regulation of insurance not preempted by ERISA, but held that any remedy it might provide to a beneficiary of an ERISA plan was preempted. Id., 722 F. Supp. at 1562. In Kanne v. Connecticut General Life Ins. Co., 859 F.2d 96 (9th Cir. 1988), the Ninth Circuit came to the same conclusion. Referring to Pilot Life, the Court wrote, "We do not find it possible to read this language in a way that permits a state statute . . . to supplement the ERISA civil enforcement provisions available to remedy improper claims processing." Id., 859 F.2d at 100.
In the case at bar, the plaintiff alleges improper processing of benefits under an insurance plan. As the plan qualifies as an ERISA employee benefit plan, this Court must conclude that the broad language of Pilot Life mandates that any relief available to a beneficiary of such a plan must be based on an ERISA claim. The fact that the defendant may or may not have violated a permissible state regulation of insurance does not enable the plaintiff to recover contested benefits. The state of Illinois may enforce the Illinois Insurance Code by fining Guardian or denying it a license to practice insurance, but it may not enforce the Code by providing an ERISA plan beneficiary a state law cause of action for contested insurance benefits. Such a remedy is exclusively an ERISA concern.
Accordingly, as Count I of plaintiff's complaint fails to state a claim upon which relief may be had, the motion to dismiss is GRANTED.
JOHN A. NORDBERG
United States District Judge
DATED: July 30, 1993
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