Novant Health is suing two insurers in federal court over claims they breached contracts by not providing coverage for a $32 million settlement the health care system reached with employees over retirement plans.
Novant, headquartered in Winston-Salem, filed the civil case last week against Travelers Casualty and Surety Company of America, and Federal Insurance Company, also known as Chubb. In April, Novant had filed a similar lawsuit in state court against both insurers.
The suits follow court approval granted last September for the settlement, which Novant agreed to after current and former employees sued the health care system in 2014.
That suit claimed Novant employees collectively lost millions from their retirement plans because of unnecessarily high fees and poor investment decisions. Novant’s plan paid much higher rates to invest in mutual funds than other institutional investors – in some cases, more than double, according to the suit.
Novant, which employs about 24,000 people, including in the Charlotte area, notes in court documents it did not admit or deny liability in agreeing to settle the claims.
In its lawsuit against the two insurers, Novant claims the policies had combined coverage limits of $25 million but that Chubb has provided only $4 million and Travelers about $4 million toward the settlement. Novant, which claims it had to pay the roughly $24 million balance of the settlement, is seeking damages in excess of $25,000 apiece from Chubb and Travelers.
In a statement to the Observer, Novant said the insurers “have not fully honored their obligations to pay under their insurance policies, and Novant Health has been forced to file a lawsuit.” Novant said it had “made every attempt” to negotiate a fair resolution with the insurers, efforts Novant said were not successful.
A spokeswoman for Chubb declined to comment. A spokesperson for Travelers did not immediately respond to requests for comment.
Researcher Maria David contributed.