UnumProvident Lawsuit News
UnumProvident $120 million agreement called "one of the most significant multi-state insurance regulatory actions in history"
-November 18, 2004
Final approval of a multi-state settlement with UnumProvident Corp. over disputed handling of disability claims will cost the firm over $120 million to comply and require claims made as far back as 1997 to be reassessed. In addition, the UnumProvident settlement will require $15 million in fines be paid.
UnumProvident has been the target of as many of almost 3,000 lawsuits, in addition to a class action suit filed in 2002. For several years complaints and lawsuits continued to allege UnumProvident was unfairly and deliberately denying disability claims. Insurance regulators of Maine, Massachusetts and Tennessee released its examination of the claim handling practices of three disability insurers that are owned by UnumProvident, in addition to settlement agreements requiring the companies change their claims practices and reassess certain claims that date back as far as 1997. Officials in New York and the U.S. Department of Labor also signed the agreement.
There are also 47 other states and the District of Columbia that have joined in the multi-state market conduct examination of Unum Life Insurance Company of America, The Paul Revere Life Insurance Company and Provident Life and Accident Insurance Company. Every one of the 50 states and the District of Columbia will be given the opportunity to join in identical settlement agreements signed by Maine Insurance Superintendent Alessandro Iuppa, Massachusetts Insurance Commissioner Julianne Bowler, Tennessee Insurance Commissioner Paula Flowers and U.S. Department of Labor Employee Benefits Security Administration Regional Director James Benages.
Final approval to allow all four of the agreements to become effective will depend on regulators in two-thirds of the 47 remaining states agreeing, with some states planning on continuing its own market conduct examinations. According to Iuppa, "This action is one of the most significant multi-state insurance regulatory actions in history, providing a uniform verifiable and effective state based settlement for the benefit of UnumProvident policyholders nationwide."
The multi-state examination began in September 2003. Massachusetts and Tennessee had launched market conduct examinations of its own companies, but in consulting with colleagues nationwide through the National Association of Insurance Commissioners, all the states and the District of Columbia joined in the multi-state examination. Examination cost, continued oversight called for in the settlements and compliance with the settlements is estimated to be more than $120 million. Major changes in UnumProvident's claim handling processes are expected to come from the agreements, which would be continuously monitored to make sure compliance is met.
The agreement does not prevent the possibility that additional fines and sanctions by states deciding to pursue additional settlements from occurring. Failure of the companies to meet the terms of the Plan of Corrective Action as outlined in the agreements would impose a fine of $145 million. UnumProvident is the nation's largest disability insurer, insuring more than 25 million people. An estimated 215,000 claims nationwide will be reconsidered that were previously denied by UnumProvident.
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