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Davis Law Group, P.S.

Legal Action Against Unum Insurance Company

Unum Insurance: Company Profile

Unum (NYSE: UNM) is a Chattanooga, Tennessee-based insurance company previously named UnumProvident, which was formed from the merger of two competing insurance companies, Unum of Portland, Maine, and Provident Life and Accident Insurance Company of Chattanooga. It is currently the largest disability insurance company worldwide. Unum provides employee benefits including disability insurance, critical illness insurance, long-term care insurance and life insurance.
 
Corporate parent company Unum Group consists of three divisions: Unum US (headquartered in Chattanooga), Unum UK (headquartered in Dorking, England), and Colonial Life (headquartered in Columbia, SC). Unum Group employs approximately 10,000 people and has significant operations in Chattanooga; Columbia; Dorking; Portland, Maine; Worcester, Massachusetts; and Glendale, California; and field offices in 38 major U.S. cities.
 
Unum became the focus of negative media attention in 2002, after several plaintiff's attorneys who had sued the company went to national television outlets claiming that the company had quotas for closing claims. CBS's 60 Minutes aired a very devastating article about Unum's alleged abuses. Among their accusations was a "Vulture Award" offering personal rewards to close claims. Due to its alleged unfair business practices, investigations, and fines, Unum was called an "outlaw company" by the former California Insurance Commissioner, John Garamendi (who later became Lieutenant Governor). Unum attempted to counter the accusations by noting that "only 2% of the policyholders who filed a claim with the company last year [2001] were found not to be disabled, an amount consistent with prior experience," and that court judgments in the prior year were in the company's favor 75% of the time.
 
In December 2004, the company and several states entered into a regulatory settlement agreement. The multistate review was completed in April 2008. In a press release, Maine Insurance Superintendent Mila Kofman said, "Not only is this an example of state insurance regulators working effectively to protect the nation's insurance consumers, it is also an example of an insurer reforming its practices and becoming a model for other insurers. The strong new processes and the resulting change in corporate culture - measured by a very low rate and in some cases a 0% error in claim determinations is remarkable."
 
Advising the United Kingdom government on claims since 1994, Unum has been involved with the UK's controversial Welfare Reform Bill. Unum was investigated by the BBC in England and were described by critics as a 'rogue firm.'


Lawsuits Brought Against Unum Insurance

There are many people that have had an accident where either they or the at-fault has been insured by Unum Insurance. If this is a situation you find yourself in, it is essential that you research past legal cases involving your insurance company if you hope successfully negotiate your own settlement or court case. Substantial research will reduce the risk of repeating mistakes others have made when legally dealing with your insurance companies and can provide unique insight as to which legal courses of action might affect the value of your settlement. Additionally, substantial legal research helps highlight pivotal strategies and avenues that have historically helped win lawsuits against major insurance companies such as Unum Insurance.

Major insurance firms are renowned for stalling the release of settlement funds until the absolute last possible minute. While the ethics of this practice are highly questionable, the practice is unfortunately implemented by an extremely high percentage of insurance companies. This strategy has been devised as both a money-making and a money-saving technique. Major insurance companies usually have access to tens of billions of dollars due to high volume revenue and cash flow. Similar to banks, they invest these funds in order to amplify their profits. Even if they are required to pay a settlement, they will hold the money as long as legally possible in a leveraged effort to increase their own profits through the interest they earn on their investments.

In addition to delaying the disbursement of settlement funds, most insurance companies implement many of the following strategies to cut costs and generate profit:

 

 

  • Nickel and dime smaller individual clients with various charges with the knowledge they cannot afford to investigate their legal options.
  • Present clients with a very small initial settlement offer, as many policy holders do not realize they do not have to accept the insurance company’s first offer.
  • Wait until the last possible week to disperse funds, as some negotiations can last well over a year.
  • If you have sustained personal injuries that will be permanent, it is important to use an expert trial attorney.