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California Dept. of Insurance Fines Unum $8 Million for “Outlaw” Claims Handling

Disability Claim Denials, Insurance News, Publications/Articles

Over the weekend, the California State Department of Insurance reached a settlement with UnumProvident Corporation,  fining Unum $8 million, the largest settlement in the agency’s history, with  California Insurance Commissioner John Garamendi calling Unum an “outlaw company” that harmed consumers by denying their disability claims.  When the insurance commissioners of 48 states agreed to a $15 million multi-state settlement last year against Unum, Garamendi rejected the settlement, stating that it did not go far enough to protect California insureds.

This company engaged in a strategy to increase its bottom line at the expense of its customers. – California Insurance Commissioner John Garamendi

It was determined by state regulators that UnumProvident improperly overruled doctors’ opinions, misinterpreted job classifications,  and knowingly used incorrect insurance definitions to avoid payment disability benefits owed to its insureds.

The multi-state settlement required Unum to reopen 215,000 claims and pay a fine of $15 million.  The $8 million settlement reached between Unum and the California State Department of Insurance includes requirements for a third-party review by insurance experts, limits the discretion insurers have to interpret policy language and establishes a model policy that Unum and other disability insurers will be required to adhere to in California.

The disability insurance attorneys at Comitz | Beethe provide legal representation to protect the disability benefits of medical and dental professionals nationwide and throughout metropolitan Phoenix, Scottsdale, Tucson, Flagstaff, Sedona, Mesa, Prescott, and Yuma. We provide disability income claim advice and assistance with filing disability claims, including completion of disability claim forms and representation in disability insurance litigation.

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