According to the lawsuit, Unum denied over 31,000 new claims between June 30, 1999 and the date the suit was filed in 2003. Targets were set to save the company money and physicians and claims adjusters were given financial incentives to help meet those goals by denying or terminating claims. Furthermore, at least 6,200 plan beneficiaries were affected by Unum's "alleged illegal claims practice."
In 2004 Unum Group was ordered to reconsider around 200,000 denied claims and pay a fine of $15 million. The order came after an investigation by New York State Attorney General Eliot Spitzer into inappropriately denied claims for policyholders who had individual and group long-term disability policies. Unum was also ordered to restructure their claim-handling procedure to ensure that all claimants were handled in a fair and objective manner.
Under the order, people who had their long-term disability claim denied for reasons other than death of the claimant, withdrawal of the claim, failure to satisfy the elimination period, payment of maximum benefits or resolution of the claim through litigation or settlement were eligible to have their claim reassessed. The reassessment process was scheduled to end June 30, 2007 and resulted in the reversal of approximately 30 percent of initial decisions being changed.
However, many people who were eligible may have already given up on the process and chosen to go through lawyers to settle their claim, rather than once-again going through Unum's claims process - a process they do not trust.
Unum also faces thousands of individual lawsuits filed by policyholders who allege their claims were improperly denied.
In July, insurers, including Unum, were ordered to pay claimants under group disability policies who had pre-existing conditions. The order stated that insurers such as Unum could only exclude the first 12 months of payments but starting in the 13th month of a long-term disability, the insurer must make full payments to the claimant. Many insurers deny claims because of pre-existing conditions.
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Unum's tactics may save the company money but they cost claimants more. Many have lost their homes, cars and other possessions because they cannot pay their bills after Unum has denied their claim. Some wind up injuring themselves further because they try to go back to work too early in order to pay the bills that they thought their policy would pay.
If you purchased a policy through Unum only to have it unfairly denied, contact a lawyer to discuss your options.