DCBS Media Release
November 18, 2004
Oregon expects to join multi-state, federal settlement on UnumProvident claims handling
SALEM – Oregonians are expected to benefit from a settlement announced today by the chief insurance regulators of Maine, Massachusetts, and Tennessee, who released their examination of the claims handling practices of three disability insurers owned by UnumProvident Corp., along with agreements requiring the companies to change their claims practices and to re-assess certain claims going back as far as 1997.
Oregon, along with 46 other states and the District of Columbia, joined the three ``lead states'' in the multi-state market conduct examination of Unum Life Insurance Co. of America, The Paul Revere Life Insurance Co., and Provident Life and Accident Insurance Co. The U.S. Department of Labor, which conducted a related investigation of UnumProvident's practices involving employee benefit plans covered by the Employee Retirement Income Security Act, is also a party to the settlement agreements. New York's Attorney General, who also investigated the companies' claims practices, has endorsed the settlement.
All 50 states and the District of Columbia will have the opportunity to join in the identical settlement agreements signed today by Maine Insurance Superintendent Alessandro Iuppa, Massachusetts Insurance Commissioner Julianne Bowler, Tennessee Insurance Commissioner Paula Flowers, and U.S. Department of Labor Employee Benefits Security Administration Regional Director James Benages. A substantially identical agreement was signed by Gregory Serio, New York Superintendent of Insurance, with UnumProvident's New York company. All four agreements become effective once two-thirds of the participating states have approved.
The settlement agreements, which are substantially similar, require the companies to:
`This action will provide important benefits and protections to Oregon consumers," said Oregon Insurance Administrator Joel Ario.
The Oregon Insurance Division received the settlement language earlier today and expects to join the settlement after reviewing the final documents.
Oregon policyholders who believe their disability claim, going back to January 1, 1997, has been mishandled by UnumProvident should contact the Insurance Division at 1-888-877-4894 or 503-947-7984. Information about the settlement also will be available on the division's Web site: insurance.oregon.gov.
The $15 million fine is being divided on a pro-rata basis among the participating states based on the long term disability income insurance premium in each state as of December 31, 2003. If the companies fail to meet the terms of the Plan of Corrective Action set forth in the agreements, a substantial fine ($145 million) will be imposed.
The multistate market conduct examination identified several claims handling practices of concern to the state insurance regulators, including:
"The agreements make sure that policyholders and claimants, past and present, get what they paid for," Ario said.
The agreements also require significant changes in UnumProvident's claim handling processes, and the states will continuously monitor and assess the companies' compliance with the agreements.
The multi-state exam began in September 2003, after Massachusetts and Tennessee had begun market conduct examinations of their respective domiciled companies. In consultation with their colleagues nationwide through the National Association of Insurance Commissioners (NAIC) all the states and the District of Columbia joined in the multi-state examination.