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Unum: Better Benefits and Bigger Profits

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Albany, NYListening to the Unum conference call posted on the Internet, you immediately want to jump on board as an investor. Unum Group (formerly UnumProvident) reported strong first quarter results for 2007, and is bullish about the remainder of the year, according to the contents of a recorded conference call from early May, posted online.

Company officials go on to say that while sales are slow, Unum's exemplary bottom-line performance has a lot to do with 'expense management', a term that was used frequently throughout the address.

unum profitsWhether the 'expense management' referred to saving a few bucks on paper clips at head office, or denying policyholders of their benefits, was not identified. But time will tell if the Unum Group, newly re-branded and with a new executive at the helm, has the capacity to distance the company from the reputation of its former self -- a reputation that included greed and hard-heartedness.

Among frequent strategies employed by Unum, policyholders experienced reductions in their benefits, or were denied benefits altogether, because in Unum's view the policyholder did not fit the company's definition of disability, according to Unum doctors who did not even examine the claimant.

Dianne Tomlin (not her real name) is one such Unum policyholder via a group policy at her place of employment.

Tomlin was granted long-term disability (LTD) after her short-term coverage (STD) expired in 2003.

The woman, now 42, had been diagnosed with cancer and underwent a partial mastectomy and chemotherapy, embarking on a long and arduous battle with what turned out to be a very aggressive cancer. Her LTD, therefore, was integral to her ability to support herself while she managed her health crisis.

However, Unum granted her LTD for a grand total of one month. Her cheque arrived with a letter stating that in Unum's view and that of their medical team, Tomlin did not fit their LTD profile.

There are many stories like Dianne's - so many, in fact that the U.S. Department of Labor pressured Unum, then known as UnumProvident, to reassess a potential 300,000 previously-denied claims. As Unum Group works through those reassessments, the original deadline for application to reassess has now passed, but some individual state regulators have entered into separate agreements with Unum. A call to your local state representative, or to a lawyer, would help you determine if your previously denied claim is eligible, and whether the window of opportunity has indeed passed, or is still available for you.

Happily, reports seem to suggest that Unum Group, under the new regime, is co-operating fully with regulators in conducting the reassessments, which appear to have been revised downward by Unum. By it's own admission, according to the conference call, the cost forecast to the company is being revised from a plus/minus U.S. $90 million, to a forecast plus/minus U.S. $60 million.

Whether or not the apparent new co-operative spirit remains over the long-term as the company struggles to put its past behind it remains to be seen -- a past which may have something to do with Unum's reported flat sales.

But the company is doing well regardless. Most insurance companies do, thanks in large measure to the millions of dollars in premiums employees and employers shell out for the right to coverage, and the warm glow that comes from having peace of mind.

A positive end to the reassessment issue, together with a renewed commitment to fair play, will bode well for Unum Group's new mantra, 'better benefits at work.'

Meantime, industry watchers will be keeping track of the outcome concerning a lawsuit
conducted in New York's highest court, an outcome that puts more onus on insurance companies to pay out benefits.

Mitchell Benesowtz, a former employee of Honeywell, filed the lawsuit. After Benesowtz became disabled and filed for LTD benefits, Manulife denied his claim as the man had a pre-existing medical condition. However, the New York Court of Appeals in Albany recently ruled that a state law passed in 1993 allows insurance companies to only disallow payments for the first 12 months of a disability.

Unum, and First Unum are named among several others as now required to pay New York residents LTD benefits for a pre-existing condition except for the first 12 months of the disability. While the decision is binding only to New York residents, it has been suggested that under certain circumstances the ruling might also apply to policyholders who live out-of-state.

Unum Group reported earnings of U.S. $173.3 million in the first quarter of this year.


Unum Legal Help

If you have had a disability claim denied, or if your claim was granted and then later terminated, please contact a lawyer involved in a possible [Unum Lawsuit] who will review your case at no cost or obligation.


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