At least 40 states have ratified landmark multi-state settlement agreements involving three major disability insurance carriers owned by UnumProvident Corp. of Chattanooga, Tenn., insurance regulators announced Tuesday.
“We have 40 signed agreements in hand and three states who have asked for extensions,” Paula Flowers, Tennessee Insurance Commissioner said. “We’re looking forward to the successful re-assessment of claims as called for in the corrective action plan.”
Under the multi-state agreement reached in November by insurance regulators in Tennessee, Maine and Massachusetts, acceptance by two-thirds of the participating states makes the national settlement effective and triggers implementation of the settlement’s Plan of Corrective Action.
Unum Life Insurance Company of America, Paul Revere Life Insurance Company, Unum National Insurance Company, and Provident Life and Accident Insurance Company now have 15 days to notify more than 200,000 qualified claimants of their right to seek re-assessment of claims denied or closed since January 1, 2000 for reasons other than settlement, death, or reaching benefit maximums.
“Throughout this process, we’ve worked with our fellow state regulators nationwide towards a national settlement that is fair to policyholders and claimants – past, present and future,” Alessandro Iuppa, Maine Insurance Superintendent said.
Re-assessment of claims is also available to those who request it for claims similarly denied or closed between January 1, 1997 and December 31, 1999. The companies also must modify clais handling and benefit determination practices as specified in the agreements, improve accountability and oversight, and enhance corporate governance.
“We will enforce the terms and strict timetables in the agreements, and keep our colleagues aware of all developments through the National Association of Insurance Commissioners,” Julianne Bowler, Massachusetts Insurance Commissioner said.
The companies also will pay a fine of $15 million, which will be divided on a pro-rata basis among the signatory 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 and deadlines of the Plan of Corrective Action set forth in the agreements, a substantial fine ($145 million) will be imposed.
Georgia Insurance Commissioner Insurance John W. Oxendine has fined UnumProvident Corp. companies an additional $500,000 for alleged mishandling of disability claims.
Oxendine is requiring companies owned by UnumProvident Corp. to not only change their claims practices, but also to re-assess certain claims denied or benefits terminated going back as far as 1997. As many as 8,821 Georgia claimants will be affected.
In March 2003, Oxendine ordered Unum to pay a $1 million fine totaling as part of an initial response by Oxendine to his investigation of Unum’s claims-handling practices in Georgia. In addition to the fine, the companies were required to make changes to their claims handling practices and placed on probation for two years.
North Carolina Insurance Commissioner Jim Long said he expects North Carolina to receive $390,861. One estimate is that more than 10,000 claims in North Carolina are eligible for reassessment.
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