UnumProvident Multistate Investigation Settles

UnumProvident Corporation, the nations largest disability insurer, has announced some of its subsidiaries have entered into settlement agreements with state insurance regulators led by Maine, Massachusetts and Tennessee in response to a multistate investigation.

(PRWEB) December 3, 2004 -- Both the U.S. Department of Labor and the New York Attorney Generals Office has notified UnumProvident of its support of the settlement and have closed its own investigations. The press release from the office of New York State Attorney General, Eliot Spitzer: http://www.oag.state.ny.us/press/2004/nov/nov18a_04.html

Final approval of the settlement will require obtaining the consent of two-thirds of the 47 remaining states and two jurisdictions that participated in the examination. Insurance regulators in states that sign the agreement will get a share of the fine. Three states are still conducting their own review of the insurer and may end up imposing their own fines.

Under the agreement, UnumProvident will pay a $15 million fine and reconsider about 200,000 denied claims, in addition to agreeing to change various company practices. UnumProvident estimates the settlement will result in a recording loss of $127 million to pay policyholders and to enact required reforms. The companys failure to meet settlement requirements after two years will result in a possible contingent fine" of up to $145 million.

Investigation began in response to customer complaints last year. In March 2003, Georgias insurance commissioner, John Oxendine, imposed a $1 million fine on UnumProvident and its subsidiaries.

To read more about the press release from the Massachusetts Division of Insurance, click here.

More UnumProvident lawsuit settlements may result, which could end up affecting the companys anticipated losses.

The company insures more than 25 million people and has about a quarter of the disability insurance market.

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