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Michigan State Stops Victim Payments, Sues Insurers Over Nassar Claims Coverage.

Byline: Stephanie K. Jones

Michigan State Stops Victim Payments, Sues Insurers Over Nassar Claims Coverage

Michigan State University has halted payments from a $10 million fund it set up for counseling services for victims of now-imprisoned former sports doctor Larry Nassar amid concerns about possible fraudulent claims. It also has filed suit against its insurance carriers over coverage of sexual assault claims by Nassar's victims.

The lawsuit was filed July 26 in Ingham County Circuit Court.

School General Counsel Robert Young says in a release that the carriers have failed to honor "their policies."

Michigan State announced in May it reached a $500 million settlement with 332 women and girls who said they were assaulted by Nassar. Interim President John Engler has said all the school's insurers participated in mediation toward the settlement.

Nassar is serving a 60-year federal prison term for child porn possession, then 40 to 175 years in state prison for the sexual assaults.

The Associated Press left messages seeking comment from Michigan State's largest carrier, United Educators.

In addition to United Educators, insurance companies named in the suit include:

* United National Insurance Co.

* Federal Insurance Co.

* Westchester Surplus Lines Insurance Co.

* Ironshore Specialty Insurance Co.

* Michigan Universities Self Insurance Corp.

* Genesis Management and Insurance Services Corp.

* National Union Fire Insurance Co.

* American Home Assurance Co.

* TIG Insurance Co.

* American Insurance Co. Corp.

* The Doctors Co.

* Sompo International

The Lansing State Journal reported the school stopped making counseling services payments on July 25 after the Healing Assistance Fund administrator's flagged the issue. MSU spokeswoman Emily Guerrant says stopping payments will allow an investigation into the issue.

Guerrant says the fund had distributed more than $1.1 million as of June 30.

Nassar worked for Michigan State and USA Gymnastics, which trains Olympians. He is imprisoned for molesting athletes and possessing child pornography.

The Detroit News reports John Manly, a civil attorney for roughly 200 victims, says fraud should be rooted out but that he worries about how victims will cope without.

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Publication:Insurance Journal
Geographic Code:1USA
Date:Jul 30, 2018
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