A federal agency is suing a single-state benefits purchasing group that kept the proceeds from a mutual insurer’s move to go public.
The U.S. Department of Labor says it has filed a suit against the Iowa Association of Business and Industry, Des Moines, Iowa, in the U.S. District Court for the Southern District of Iowa.
The department has accused the ABI of violating its fiduciary responsibility to employees under the Employee Retirement Income Security Act participating in an ABI benefit plan by keeping the proceeds when on of the plan’s insurers, Principal Mutual Insurance Company, Des Moines, demutualized and became Principal Financial Group Inc.
In 2001, the ABI plan provided group life insurance and group disability insurance as well as group health insurance, officials say.
The ABI received 870,373 shares of Principal stock when the insurer converted, then sold the stock and put the cash in a trust, officials say.
The ABI violated ERISA guidelines by keeping the stock sale proceeds, officials say.