Unum is one of the biggest disability and life insurers in the United States, owning subsidiaries including Provident Life and Accident Insurance Company and The Paul Revere Life Insurance Company. Unum generates billions of dollars in revenue and has boasted high rates of growth over the past few decades. Unum has also built a bad reputation for unfair handling of disability benefits claims over the years. Their aggressive and unfair tactics to avoid paying benefits to insured individuals resulted in numerous lawsuits and class actions for insurance bad faith practices, with trial losses totaling well over $100 million.
On top of individual lawsuits and class actions, in the early 2000’s, insurance regulators undertook a multistate market conduct examination to investigate reports of wrongful practices related to delaying and denying legitimate disability insurance claims. As a result, Unum entered into a multi-state settlement agreement in 2004 in which Unum agreed to review denied claims, implement new claims handling procedures, and pay a $15 million civil penalty. On top of the multi-state settlement agreement, California regulators undertook their own investigation and Unum’s California settlement agreement entailed an additional $8 million penalty as well as changes to policy provisions and claims handling procedures.
Some of the most striking problems with Unum’s handling of disability claims that insurance regulators identified included the following:
First, Unum was found to have a practice of selectively focusing on certain pieces of a person’s medical file while ignoring others in order to justify denying or terminating valid disability claims—in other words, Unum’s practice was to unfairly cherry pick from the records.
Second, Unum overly deferred on its own in-house medical reviewers in making its disability determinations. These in-house reviewers typically only looked at the paper files and did not conduct in-person examinations. Unum would then overrule the opinions of the insured person’s treating doctors in favor of relying on its own reviewers’ findings which supported the denial or termination of claims.
Third, regulators found many instances where Unum justified its denials or terminations based on a lack of objective evidence of disability, even where its policies contained no such requirement. Furthermore, regulators found evidence that Unum was pressuring its claims adjusters to meet certain benchmarks and targeting certain types of claims for denial or termination, essentially trying to make certain quotas.
Despite taking losses at trials, paying regulatory fines, and entering into settlement agreements in which Unum promised to make its claim handling practices more fair and ethical, it appears that Unum’s promises have not been fulfilled.
Kantor and Kantor continues to represent and fight for people whose long-term disability claims have been unfairly denied by Unum. With decades of experience dealing with Unum and similar insurers, our team is familiar with the range of tactics these companies use to denying valid claims and we are able to help clients overcome an unfair denial or termination through the administrative appeals process or through litigation. Please call Kantor & Kantor for a free consultation at 800-446-7529 or use our online contact form.