New York Attorney General Eliot Spitzer, an Empire State gubernatorial candidate, created some excitement during the week before the general election by announcing a $15.5 million group insurance broker compensation agreement with UnumProvident Corp.

UnumProvident, Chattanooga, Tenn., the biggest U.S. disability insurer, also has agreed to unveil a new, simpler group insurance broker compensation system, and it has negotiated a settlement with regulators at the California Department of Insurance that calls for it to improve broker compensation disclosure.

The terms of the New York settlement and the California settlement are detailed in the accompanying chart.

At press time, UnumProvident was preparing to tell agents and brokers about its new compensation program.

“We proactively sought out the [New York] attorney general’s support for the compensation plan,” UnumProvident spokesman Tom White says.

Spitzer himself says in his settlement agreement announcement that UnumProvident itself conceived of many of the changes included in the agreement.

For Spitzer, who has been running for governor of New York as a Democrat, the UnumProvident announcement was the third major insurance-related announcement in less than a week.

Spitzer also has announced a major suit alleging bid-rigging in the life settlements market, and he has ordered Oxford Health Plans Inc., a unit of UnitedHealth Group Inc., Minnetonka, Minn., to provide health coverage for children adopted overseas the instant they become dependents of UnitedHealth insureds who are eligible for dependent coverage benefits.

UnumProvident, which notes that it changed its compensation programs and compensation disclosure policies in 2005, says it is hoping the New York broker comp settlement and the California broker comp settlement will serve as models for the entire industry.

Meanwhile, UnumProvident is continuing to implement a disability claim reassessment effort required by a multistate settlement. Participating states could impose additional fines on UnumProvident if the company fails to meet their standards for the claim reassessment process.

In other UnumProvident news:

- UnumProvident has reported a $64 million net loss for the third quarter on $2.7 billion in revenue, compared with $53 million in net income on $2.5 billion in revenue for the third quarter of 2005.

The net results include a $325 million “claim reassessment reserve increase.”

Part of the increase reflects the extra benefits UnumProvident may owe to claimants as result of the claims reassessment process, UnumProvident says.

Securities analysts in the New York office of Fox-Pitt, Kelton, write in a commentary that the $325 million charge for the claim reassessment reserve increase calls the adequacy of the reserves for the entire block of business into question.

UnumProvident’s group life and group disability sales were weak during the third quarter, but the company’s Colonial Life unit and voluntary benefits operations did better than expected, the analysts write.