A law firm that represents insurance claimants says regulators should renegotiate a draft settlement agreement supported by a large disability insurer.[@@]

UnumProvident Corp., Chattanooga, Tenn., is seeking approval from insurance regulators in at least 33 states and other jurisdictions for an agreement that could resolve disputes between it and thousands of disability insurance claimants.

The proposed agreement calls for UnumProvident to pay $15 million in fines. The agreement also calls for the company to spend $112 million to reassess as many as 215,000 old long-term disability claims and improve benefits for many claimants.

Regulators in Maine, Massachusetts, New York, Pennsylvania and Tennessee already have endorsed the agreement, and UnumProvident is hoping many more state regulators will approve the agreement by Dec. 20.

Some plaintiffs’ lawyers have welcomed the proposed settlement, but lawyers at Bourhis & Wolfson, San Francisco, a law firm that represents many consumers who have sued disability insurers, say the current version of the settlement is inadequate.

The settlement does not require UnumProvident to admit to wrongful conduct, and it forces participating insureds to waive all rights to collect interest, attorneys’ fees, and punitive damages, the Bourhis & Wolfson lawyers say in a press release about the settlement.

The settlement also fails to cover UnumProvident claim denials on policies originally written by other companies, even though those policies account for about half of UnumProvident’s disability business, the lawyers say.

The lawyers are encouraging consumers to tell insurance commissioners to reject the proposed settlement.