Thursday, May 28, 2020

MSU files lawsuit against its insurance companies, stops payments to Nassar survivors seeking counseling

July 26, 2018
One of MSU's landmarks, the Beaumont Tower, is pictured.
One of MSU's landmarks, the Beaumont Tower, is pictured. —
Photo by Annie Barker | The State News

MSU suspended payments to a fund for survivors of ex-MSU and USA Gymnastics doctor Larry Nassar's sexual abuse who are seeking counseling and filed a lawsuit against all of its insurance companies as it pertains to their policies and coverage of sexual assault, according to statements released by the university Thursday.

The Healing Assistance Fund, created to provide survivors with resources needed for healing through counseling and mental health services, will not be funded until the situation can be further investigated and the university can "ensure these funds are being distributed appropriately," a university press release said.

"It was brought to our attention earlier this week by the firm that manages the Healing Assistance Fund that there are possible fraudulent claims being made," MSU Spokesperson Emily Guerrant said in the release. "MSU has decided to halt all further payments while the situation can be investigated."

Guerrant said that the university does not currently have specifics on the investigation.

Additionally, MSU filed a lawsuit on Thursday against all of its insurance carriers "regarding the policies and coverage for sexual assault claims," according to another university statement.

The university announced in recent months that it'll rely on its insurance companies to assist in paying for the $500 million settlement made in May with the survivors of Nassar's sexual abuse.

"We are suing our carriers, including our largest carrier United Educators, for failing  to honor their policies," Robert Young, MSU's general counsel, said in the statement. “It is disappointing  and unfortunate we have to go to court on this matter, but we are hopeful this lawsuit will bring us to speedy resolution and that the insurance companies will honor their contractual obligations."

A breakdown of the lawsuit was not immediately available, as the court in which it was filed was closed and Guerrant told the Detroit Free Press she didn't have the suit on hand.

The statement can be found here. 

This story was updated on July 26 at 7:07 p.m. and on July 31 at 2:03 p.m. to reflect further updates.

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