Insurers Begin To Pay MSU To Cover Costs Of The Nassar Settlements

Aug 10, 2020

Michigan State University is collecting money from insurance companies to cover part of the half-billion dollar settlement with victims of Larry Nassar’s sexual abuse.

Nassar is serving a 60 year prison sentence on federal child pornography charges, and 175 years behind bars on state charges related to sexual assaults on minors. At the time of the assaults, Nassar was employed in the MSU College of Osteopathic Medicine as a doctor, and he also worked extensively as a trainer of Olympic gymnasts with USA Gymnastics.

The university sued more than a dozen insurance companies in 2018 after they refused to pay-out liability claims covering the cost of the settlement. Now, according to reporting from the Lansing State Journal, insurance companies have paid out nearly a third of the settlement money.

WKAR’s Scott Pohl spoke with LSJ reporter Megan Banta who has reported that several of the insurance companies have agreed to make payouts to MSU over those liability claims. Below is the transcript of their conversation:

SCOTT POHL: Let's begin with the basis of these lawsuits. Why is MSU suing these insurance companies?

MEGAN BANTA: MSU first sued these insurance companies a little more than two years ago, right after it made a settlement agreement with the survivors of Larry Nasser's abuse for $500-million. It's hoping that under the liability coverage that these companies provided throughout his employment at MSU, that they can recover about $300-million.

POHL: And settlements have already been reached with several of these insurance companies. Tell me about that, and how much money perhaps is already involved in these settlements.

BANTA: MSU has settled with five of about a dozen companies for a little more than $100-million, so about a third of the money that they hope to recover, with the biggest settlement coming from United Educators which we've heard provided the bulk of the liability coverage throughout the years.

POHL: What can you tell me about the insurance companies that have not yet settled with the university?

BANTA: The insurance companies that have not yet settled seems to be the smaller ones that provided coverage quite a few years ago and for only a couple of years. So, my best guess is that they're still trying to figure out what exactly they might have been liable for under the policies. And it's also worth noting that all of the insurance companies that have settled so far still maintain that they have no liability, that it's all on the university, but they seem to want to avoid a lengthy lawsuit.

POHL: Some of the legal ramifications of these lawsuits are expected in court next week, right?

BANTA: Correct. There is a settlement conference on the 17th scheduled in Ingham County Circuit Court, but a lot of dates have been pushed back as mediation talks have continued, so there's no guarantee that continuing of that hearing is really happening.

POHL: What can you tell me, if anything, about when the university expects to actually receive this settlement money from the companies they've worked things out with?

BANTA: So from looking at the settlement agreements, some of which are all the way from back in December, they should have actually received almost all of the money by now. The agreements say that the company should pay within 21 to 45 days of signing, and I think the most recent is from April.

You can read Megan's original story, here