“In Brown, a panel of this court held that the heightened arbitrary and capricious standard must be used when the plan was administered by an insurance company which paid benefits out of its own assets. ‘Because an insurance company pays out to beneficiaries from its own assets rather than the assets of a trust, its fiduciary role lies in perpetual conflict with its profit-making role as a business.”
Buckley v. Metropolitan Life, 115 F.3d 936, 939 (11th Cir. 1997).
In Buckley, the plan’s decision was reviewed under an arbitrary and capricious
standard. However, there is a difference between the manner in which the plan was
funded there and in the present case. In Buckley, the plan was funded by
nonreversionary contributions; therefore, the employer:
“incurs no direct expense as a result of the allowance of benefits, nor does it benefit directly from the denial or discontinuation of benefits.”
Delta Airlines, Inc. does not have fixed contributions. Whether or not Delta is an
insurance company in name is irrelevant. The contributions from Delta Airlines, Inc.’s
assets depend on the actuarial valuation of the Plan. The actuarial valuation of the Plan
depends on the amount of costs and claims paid. Delta Airlines, Inc., through Delta,
incurs a direct benefit from the discontinuation of benefits; its fiduciary role lies in
perpetual conflict with its profit-making role as a business. Delta is operating under a
conflict of interest, therefore, the heightened arbitrary and capricious standard of review
"The beneficiary need only show that the fiduciary allowed himself to be placed in a position where his personal interest might conflict with the interest of the beneficiary. It is unnecessary to show that the fiduciary
or is unable to show , we reverse the denial of benefits only if the denial is completely unreasonable. Correspondingly, when the members of a tribunal – for example, the trustees of a pension fund – have a serious conflict of interest, the proper deference to give may be slight, even zero; the decision if wrong may be unreasonable." Brown v. Blue Cross and Blue Shield of Alabama, 898 F.2d 1556, 1564 (11th Cir. 1990)(citations omitted)(emphasis added). "