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November 24, 2002 at 07:00 PM
UnumProvident Faces Wave Of Attacks Over Handling Of Claims
By
UnumProvident Corp. is fighting off a flurry of attacks on its disability insurance claims-handling practices.
The NBC series “Dateline” and the CBS series “60 Minutes” have both aired critical reports on the company in the past few weeks. Bourhis & Wolfson, a San Francisco law firm, recently publicized a federal court order affirming a $7.7 million verdict against the company by putting out a press release calling the ruling a “huge victory for all insureds.”
The consumers in the NBC and CBS reports, and Joan Hangarter, the plaintiff in the federal case, have accused UnumProvident and some of the insurers it has acquired over the years of using quotas and other unreasonable strategies to terminate benefits for valid individual disability insurance claims.
UnumProvident denies the allegations that it has been unreasonably aggressive about contesting claims.
“Any business involves expectations of performance, and ours is no exception,” Tom Watjen, UnumProvidents chief operating officer, says. “However, to suggest that the natural stresses of our business involve pressure of any kind to close claims inappropriately is absolutely false.”
UnumProvident points out that it will pay about $3.6 billion in claims this year alone, and that only 2% of the policyholders who filed a claim with the company in 2001 were found not to be disabled.
When disputes do go to court, the courts rule in UnumProvidents favor three-quarters of the time, and the number of judgments against UnumProvident amounts to only 0.01% of the number of new claims, the company says.
UnumProvident also argues that the recent media attacks on its claims-handling practices have been the result of the activities of a handful of plaintiffs attorneys and a few disgruntled former employees.
