Tennessee-based Insurer Unum Group to Pay $5.55 Million Penalty

June 25, 2008

Chattanooga, Tennessee-based disability insurer Unum Group agreed to pay fines and penalties totaling $5.55 million for failing to report special fees paid to a San Diego-based insurance broker.

Federal prosecutors in San Diego said in a statement June 23 that the insurer paid fees to a broker from 2000 to 2004 without disclosing them.

The statement says the broker secretly charged the insured millions of dollars in higher premiums based on the undisclosed fees.

Assistant U.S. Attorney Phillip Halpern describes the penalty as part of an agreement to cooperate.

Unum spokesman Jim Sabourin identified the broker as Universal Life Resources of San Diego. Sabourin described the investigation as an industry issue that has involved other insurers and other states. He said Unum has changed its reporting practices.

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