Contributors A Potential Class Certification Defense Parmenter v. Prudential Insurance Co., No. 1:22-cv10079 (D. Mass. Aug. 22, 2024). The District of Massachusetts denied a motion for class certification filed by a putative class of insureds alleging that the defendant breached its fiduciary duties to policyholders in violation of ERISA because the defendant was required to receive approval from the Massachusetts insurance commissioner before increasing premiums. The policies at issue said premium increases would be “subject to the approval of the Massachusetts Commissioner of Insurance.” The plaintiff argued that the class action complaint posed a common question: Could the defendant increase premiums without first securing approval of the Massachusetts commissioner? The court reasoned that even if this question were commonly posed to class members, it could not be answered universally for the class because the First Circuit had already held the “subject to” language was ambiguous. Accordingly, the intent of the parties to each policy would be relevant extrinsic evidence. Given that different policyholders may have had different views of the meaning of the at-issue clause, evidence of the negotiation between the defendant and each policyholder could result in varying interpretations Annuities Privacy / AI 11 Jason Sigalos Associate Litigation & Trial Practice jason.sigalos@alston.com More States Adopt NAIC AI Bulletin Over the summer and continuing this fall, state insurance departments have continued to adopt the National Association of Insurance Commissioners’ (NAIC) model bulletin on the use of AI in insurance. As of February 2025, 22 states have adopted the NAIC bulletin, which provides regulatory guidance and expectations for insurers and guidelines for the development and implementation of AI systems. In general, the bulletin reminds insurers that any conduct or decisions made using AI systems is subject to all legal and regulatory requirements, and AI systems should be developed to avoid adverse consumer outcomes. Indeed, the development and maintenance of AI systems is likely to be subjected to regulatory scrutiny in both states that have adopted the NAIC bulletin and those states that have independently promulgated regulations or guidance. The 22 states that have adopted this bulletin are: Alaska, Arkansas, Connecticut, District of Columbia, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Nebraska, Nevada, New Hampshire, New Jersey, North Carolina, Oklahoma, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and West Virginia. of the clause. That means the putative classes lacked commonality under Rule 23. The court’s order denying class certification due to ambiguous policy language has important implications for how courts may evaluate class certification motions brought by putative classes alleging breaches of contract by insurance companies and annuity vendors. Many putative class actions alleging breach of insurance and annuity contracts may relate to ambiguous policy language. To the extent the policy language in those cases is, in fact, ambiguous, courts in those cases may similarly reason that classes cannot be certified because the common question posed by the breach allegation cannot be answered classwide. n Contributors Peter Cornick Associate Litigation & Trial Practice peter.cornick@alston.com Gillian Clow Senior Associate Litigation & Trial Practice gillian.clow@alston.com 10
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