九色

The Unum Life Insurance Company of America, Provident Life And Accident Insurance Company, and the Paul Revere Life Insurance Co., all subsidiaries of UnumProvident, have agreed to settle issues regarding claims handling and marketing of disability insurance policies sold to Minnesota consumers.

According to terms of two separate settlement agreements with Minnesota and other insurance regulators, the companies are required to reassess certain claims going back as far as 1997 and to pay a $560,000 civil penalty to Minnesota.

The Minnesota Department of Commerce initiated an independent market conduct examination of UnumProvident and then subsequently provided information and participated with the multistate effort that eventually included all 50 states, District of Columbia, U.S. Department of Labor, and New York’s attorney general.

The multistate settlement imposes a fine of $15 million, which will be divided on a pro-rata basis among the participating states based on the long-term disability income insurance premium in each state as of Dec. 31, 2003. Minnesota’s share is estimated at about $310,000.

The Minnesota Department of Commerce’s independent examination involved a review of UnumProvident claims and marketing practices in Minnesota through 2003. As a result, UnumProvident will pay an additional civil penalty of $250,000 to Minnesota, will change its claim file policies and procedures, and will review marketing materials for compliance with Minnesota law.

Following its examination, the Department of Commerce alleged that the companies violated Minnesota insurance law.

In some instances:
鈥擴num marketed their disability income policies without adequately explaining terms that may have impacted benefit payments;
鈥擳he companies failed to comply with claim handling time periods regarding acknowledgments, investigations, and claim inquiries from policyholders;
鈥擳he companies failed to provide clear explanations for the payment of benefits or claim denials;
鈥擳he companies failed to inform the claimant of all available benefits
鈥擴num failed to determine whether the recommended product was suitable for the applicant;
鈥擴num failed to pay interest or to properly disclose the interest paid on some life claims.

The settlement agreements require UnumProvident to:
鈥擮ffer, in writing, to reassess claims denied or closed since Jan. 1, 2000, for reasons other than settlement, death, or reaching benefit maximums;
鈥擜llow for reassessment, upon request, of claims similarly denied or closed between Jan. 1, 1997 and Dec. 31, 1999
鈥擬odify claims handling and benefit determination practices as specified by the agreements
鈥擨mprove accountability and oversight of claims processes as specified in the agreements;
鈥擡nhance corporate governance by expanding the Board of Directors by three directors with insurance industry or regulatory experience;
鈥擡stablish claim file record retention policies and procedures and review marketing materials to ensure that the companies are in compliance with Minnesota law. The companies are required to submit their corrective action plans for review.

Topics Claims