Unum and Provident Disability Denials
You may be in business with Unum whether you ever wanted to be or not. If you own a disability policy issued by Paul Revere Life Insurance Company, Provident Life and Accident Insurance Company, Unum Life Insurance Company of America, or National Life Insurance Company, your disability claim will be handled by Unum employees. Through a series of mergers and acquisitions over many years, Unum acquired all these companies and the policies they issued. Unum Group (formerly UnumProvident) and its affiliates collectively make up the largest underwriter of disability insurance in the world.
From the late 80s to the early 2000s, Unum’s subsidiaries wrote disability policies which contained features and pricing so favorable to the policyholder that they are no longer being sold anywhere or by any company. If you own one of these older policies, good for you – this is the best disability coverage ever sold. In fact, it is now well-documented that Unum’s subsidiaries under-priced these policies and ended up suffering financial losses as a result. In short, you got a great deal.
But Will Unum Honor Your Original Deal?
The problem now is that Unum does not always honor that deal. Unum eventually segregated these older policies into a business unit it calls “the Closed Block.” According to Unum Group’s 2009 Form 10k, at the beginning of 2004 it stopped selling any new policies into the Closed Block segment. Unum’s public filings also acknowledge that most of the Closed Block policies were “written on a noncancelable basis.”
With a noncancelable policy, as long as the insured continues to pay the fixed annual premium for the policy’s duration, Unum cannot cancel the policy or raise the premium. The revenue side of the Unum Closed Block is therefore beyond Unum’s control. The only way Unum can affect or control the profitability of the Closed Block segment of its business is by “managing” the cost side of the equation (i.e., claims). Juries and courts have found that Unum’s “management” of these claims, and particularly claims for lifetime benefits, has run afoul of its duty to resolve claims in good faith.
These older Disability Income policies written by Provident, Paul Revere, and others commonly contain unique features such as lifetime benefits for disabilities caused by “Accident” as opposed to “Sickness.” Among other things, Unum has been found guilty of aggressively “managing” these claims by failing to acknowledge claims obviously caused by “accident,” thereby undermining the lifetime coverage the policyholder paid extra to obtain. Unum and its affiliates have been ordered to pay millions of dollars in bad faith damages in several different jurisdictions over these and other bad faith claim handling tactics. We have been hired in several cases involving precisely these issues.
Unum Fined $1M for Denying Claims in Bad Faith
In March of 2003, the Georgia Insurance Commissioner, John Oxendine, imposed a $1 million fine on UnumProvident and its subsidiaries over claims payment issues. In 2006, after a class action brought by the attorneys general of several states, Unum and its affiliates entered into a regulatory settlement agreement with all but two of our fifty states, requiring the disability giant to reconsider about 200,000 claims and pay a $15 million fine. (California entered into its own separate regulatory agreement.) Under the multi-state regulatory agreement Unum, its affiliates, and its employees promised to adhere to certain industry standards and to refrain from certain of its more aggressive claims management practices.
Despite the regulatory settlement agreements in the early 2000s, subsequent cases found Unum employees guilty of precisely the same kinds of conduct for which they had been sued and sanctioned in the first place.
How Unum Denies Claims Under Your Policy
In cases where an insurance company denies a claim that is otherwise valid, they can be charged with operating in bad faith. The insurance company has a fiduciary responsibility to act in the best interests of their policyholders. When it denies a claim that is legally valid under the terms of the policy, they are breaking the law and can be liable for damages.
While Unum does not provide a specific definition of a disability in their policies, it does acknowledge that, for the sake of your insurance claim, a disability prevents you from doing the core duties that are necessary to function at your job. In other words, if some condition prevents you from working, your insurance policy should cover you.
So, if you have a disability that prevents you from doing your job, how can Unum legally deny your claim? Well, they often list the following reasons:
Your disability is not covered under the terms of the policy
Some Unum policies, primarily their group policies, provide “own occupation” coverage for the first twenty-four months, and “any occupation” coverage beyond that. Under the “any occupation” definition Unum might contend that, even though your medical condition prevents you doing your chosen occupation, there are other, lighter jobs that you could perform. In fact, a high percentage of calls we get at Robinson & Warncke are about this precise issue. An experienced disability insurance attorney can help you demonstrate that your condition precludes you from working in any full time occupation, or that the earnings from alternate occupations would not be sufficient to disqualify you from meeting the policy’s definition of total disability.
Your disability is specifically excluded by the policy
While specific kinds of disabilities may not be excluded from the policy itself, a typical long-term disability policy will exclude disabilities based on how they happened or policy violations. For instance:
- You submitted false information on your policy;
- Disability is related to a pre-existing condition;
- Injury was self-inflicted;
- Disability arose from criminal activity;
- Disability arose during a period of imprisonment;
- The disability occurred during an act of war; or
- The disability is covered by your employer’s workers’ comp plan.
Under insurance law nationwide, policy exclusions are interpreted narrowly, and any ambiguity will typically be interpreted in favor of coverage. It takes real experience and expertise to interpret insurance terms, and some of our biggest successes at Robinson & Warncke have come as a result of discovering a reading of policy exclusions that differs from an insurer’s self-serving interpretation.
You failed to follow claim procedures or prove your claim
Filing a long-term disability claim takes more work and more detail than most people expect. It may seem like Unum is giving you the runaround asking for more information. Sometimes that is true, but oftentimes these documentation requests are reasonable.
Having a disability insurance expert on your side can help you differentiate reasonable requests from unreasonable ones. An experienced disability expert attorney can also anticipate exactly what proof will be requested, and the level of detail that will convince Unum to pay your claim. Being proactive in providing documentation leads to good outcomes – claims get paid more quickly and with less headaches.
Unum, like every other disability insurer, will require you to provide a lot of information related to your personal health and duties of your job. They will require medical proof that your disability prevents you from doing your job, and they will impose deadlines on when this information must be received by. Failure to timely respond to these requests can lead to a claim denial.
A Denial Letter Is Not the End of the Road
If your claim was denied by Unum, you can still appeal the decision. It is important that you contact an attorney as soon as possible after receiving an adverse decision. A Unum long-term disability denial attorney can make sure that your case file is complete and presents an ironclad case if your claim should go into litigation. To learn more about appeals, read our article Should I Handle My Own Appeal?
If you believe your claim has been wrongfully denied, or need help or advice about how to prove your claim, the attorneys at Robinson & Warncke can help.
Talk to a Disability Denial Attorney
If you are experiencing difficulty with your Unum, Paul Revere, Provident, or National Life claim, you need to call a denied claims lawyer who understands Unum’s history, structure, and practices, and who has the skill and resources to take on this corporate giant.