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Abstract
In an important 1970 law review article, Professor Robert Keeton commented that, in light of the unique circumstances surrounding a layperson's purchase of insurance, the objectively reasonable expectations of applicants and intended beneficiaries regarding the terms of insurance contracts will be honored even though painstaking study of the policy provisions would have negated these expectations. Because it can be facially contrary to the fundamental requirement that an employee benefit plan must be administered in accordance with its terms, the reasonable expectations doctrine does not easily fit within the ERISA federal common law of contracts. That doctrinal difficulty is compounded when the reasonable expectations of a plan participant are based upon a summary plan description, and the plan clearly provides the plan administrator with the discretion to interpret a plan. However, the majority of courts that have considered the issue have accepted the doctrine at least with respect to the ambiguous component of the doctrine.