Quadrino Schwartz, your resource for Insurance, Class Actions, and Business Law

UnumProvident Multistate Settlement is Approved, Triggering a Reassessment of 215,00 Denied Disabili

The following story ran across the newswires on December 21, 2004. Despite the upbeat nature of these stories, Quadrino Schwartz urges all potentially affected individuals to get legal advice before signing anything with UnumProvident. There are class actions pending, in which Quadrino Schwartz is involved, that may provide for greater rights for more people than the limited remedies under the government agreement. Efforts are under way in these class actions to gain more protection for many more disabled policyholders, and to increase their chances for success in obtaining their benefits. For more information, click on our contact us page or call 516-745-1122 and ask for Carolyn Lau who will take some initial information from you regarding your situation.

Below is the story by the Associated Press, reprinted here:

Multistate UnumProvident Settlement OK'd
Tuesday December 21, 7:12 pm ET
By Bill Poovey, Associated Press Writer

Multistate UnumProvident Claims Settlement Approved in at Least 40 States CHATTANOOGA, Tenn. (AP)

-- At least 40 states have approved a settlement in an investigation of UnumProvident Corp., requiring the disability giant to reconsider about 200,000 claims and pay a $15 million fine, insurance officials said Tuesday.

Approval of the settlement in the claims handling investigation requires the nation's largest disability insurer to notify affected policyholders within 15 days.

Including the penalty, agreed-to changes in claims handling and other operations will carry a total pretax cost of $127 million in the fiscal fourth quarter, a company spokeswoman said.

"We have 40 signed agreements in hand and three states who have asked for extensions," said Paula Flowers, Tennessee's commissioner of Commerce and Insurance.

The settlement provides for a $145 million fine if the company fails to meet the terms.

Insurance regulators in Tennessee, Maine and Massachusetts, the lead states in the investigation, signed the agreement in November, as did officials in New York and with the U.S. Department of Labor.

Unum Life Insurance Co. of America, Paul Revere Life Insurance Co., First Unum, and Provident Life and Accident Insurance Co., will have to notify affected customers that their denied or closed claims can be reassessed.

Those claims were denied or closed since Jan. 1, 2000, for reasons other than settlement, death, or reaching maximum benefits.

Insurance officials in Virginia, Missouri and Wisconsin received requested extensions, officials said.

While regulators in California and Montana chose to not approve the deal, individual policyholders are not affected by whether their states agree and are eligible to have claims re-examined.

UnumProvident insures more than 25 million people and controls about a quarter of the disability insurance market. UnumProvident shares rose 19 cents to close at $17.45 Tuesday on the New York Stock Exchange.

The investigation began last year in response to customer complaints. Georgia's insurance commissioner, John Oxendine, in March 2003 imposed a $1 million fine on UnumProvident and its subsidiaries over the claim payment issue. Flowers has said investigators saw a "lack of diligence in the claims personnel" and insufficient training.

Regulators will re-examine the company's claims handling after two years. The company is to hire an additional 75 employees as part of the settlement.

UnumProvident, organized with the 1999 merger of Provident Cos. of Chattanooga and Unum Corp. of Portland, Maine, has more than 13,000 employees worldwide.