On October 27, 2009, the US Court of Appeals for the Ninth Circuit issued its highly anticipated decision in Standard Insurance Company v Morrison, wherein the Court held that state laws, regulations, and insurance department conduct prohibiting the use of discretionary clauses in insurance policies issued as part of ERISA-governed employee welfare benefit plans are not preempted by ERISA. The court’s decision is consistent with a prior decision by the U.S. Court of Appeals for the Sixth Circuit and significantly impacts the regulatory trend of states enacting laws and regulations prohibiting the use of discretionary clauses in insurance policies, including insurance policies issued as part of ERISAgoverned employee welfare benefit plans. The practical implication of the court’s decision, along with the Sixth Circuit’s earlier decision, is that coverage disputes arising under insurance policies providing ERISA-governed benefits in those states within the Sixth and Ninth Circuits where discretionary clauses are prohibited will be adjudicated under a de novo standard of review, rather than the abuse of discretion standard of review that would have been applicable had a discretionary clause been included in the policy. Finally, it is noteworthy that the scope of the Ninth and Sixth Circuits’ precedent does not extend to selfinsured ERISA-governed plans, which still receive the benefit of the abuse of discretion standard of review if discretionary clauses are included as part of the plans’ terms.