Bad Faith Lawsuits
$8 million UnumProvident settlement allows California policyholders to have claims reevaluated
- October 10, 2005
The California Department of Insurance issued an $8 million fine against the nation’s largest disability insurer, UnumProvident Corp., as part of a landmark settlement reached October 2, 2005. The biggest fine in the agency’s history, state regulators said Unum misinterpreted job classifications, improperly overruled doctors’ opinions and knowingly used incorrect insurance definitions to avoid paying benefits.
The corporation, which operates Unum, Provident and Paul Revere life insurance companies, has been the target of much criticism and lawsuits across the country in recent years. Last year, insurance companies from 48 states agreed to a settlement against Unum, requiring 215,000 cases to be reopened and fined the company $15 million.
Although no wrongdoing was discovered, Insurance Commissioner John Garamendi called Unum an “outlaw” company and rejected the multi-state settlement claiming it failed to reach far enough to protect California consumers because it allowed Unum to reassess claims without a third-party review. The California agreement includes a third-party review by insurance experts, limits the discretion insurers have to interpret policy language and establishes a model policy that Unum and other disability insurers will be required to adhere to in the state.
For policyholders, the settlement has left them wondering what effect it will have on and what they should do. The settlement will benefit previously denied policyholders, as well as increase the claim bar, altering the way disability business and claims will be handled for carriers nationwide.
If your claim for disability insurance benefits was denied or your disability insurance benefits were terminated on or after January 1, 1987 and before September 30, 2005 by Unum, Provident or Paul Revere, under new claim standards developed specifically for California claims you are entitled to have your claim reevaluated.
Also, if you previously received notice from UnumProvident notifying you of your right to ask for reassessment of your California claim and if you timely responded to that letter, a new request is not necessary. If you did not receive the earlier notice or did receive it and did not respond to it or within the allotted time frame, you can request reassessment of your claim now by filling out and returning the Request to Participate form.
Steps must be taken 60 days from date of notice in order to be reconsidered. Failing to take action within that time frame will disqualify you from having your claim reassessed. For more information about what your rights are regarding your claim, please contact us to confer with a California disability law attorney.
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