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

Michigan State University has filed suit against 13 insurance carriers over coverage of sexual assault claims by victims of now-imprisoned former sports doctor Larry Nassar.

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

Michigan State agreed in May to pay $500 million to settle claims from more than 332 women and girls who said they were assaulted by Nassar. Under the agreement, $425 million would be paid to current claimants and $75 million would be set aside for any future claims. Lawyers will also be compensated out of the $500 million pool.

Interim President John Engler has said all the school’s insurers participated in mediation toward the settlement. However, School General Counsel Robert Young says in a release that the carriers have failed to honor “their policies.”

Nassar treated campus athletes and scores of young gymnasts at his Michigan State office, building an international reputation while working at the same time for USA Gymnastics, which trains Olympians. He 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:

Victim Counseling Payments

Michigan State also has halted payments from a $10 million fund it set up for counseling services for Nassar victims amid concerns about possible fraudulent claims.

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.