Even though in 2008 the US Court of Appeals of the Second District found in favor of the plaintiff after reviewing Unum's history of "deception," and concluded that the insurer's denials "were arbitrary and capricious," Unum continues to practice "bad faith."
In 2006, Peter (not his real name) underwent five back surgeries, several years after he bought an Unum Group and Supplemental disability coverage policy, with the understanding that he would be entitled to full benefits should he ever become disabled and unable to work.
"My back problems began to affect my ability to work, which required extensive traveling," says Peter. "As a result, I was terminated in January 2008 and applied for Unum long term disability (LTD). Unum at first denied me then reversed the decision upon appeal, but only after volumes of paperwork and, in my view, harassment. By the time I received my first payment, I had exhausted my retirement fund (about $135,000) and had to refinance my house under a government modification plan."
Peter says that Unum sells its plan as a "vision of Utopia, promising security in the unlikely event something happens to you." But Unum is practiced in the art of deception. Despite detailed evidence from his orthopedic surgeon and even Unum's independent medical examiners—all of whom agreed that Peter was indeed disabled—Unum reversed the appeal.
Unum told Peter that he was able to perform certain other jobs available in the Baton Rouge Market, according to the opinion of their "Senior Vocational Specialist," who reached that decision under the "Gainful Occupation Clause." "They listed a number of employment opportunities by referring to my resume requested early in their investigation," Peter explains.
Peter received Unum's denial letter in April 2011, as he was recovering from a nine-hour surgery that fused his sacral (S1) through L5, L4, L3 and L2, and attaching to his cervical disks. "As a true and uplifting benefit, they attached a bill for overpayment of about $68,000," says Peter. Talk about adding insult to injury…
Unum demanded retroactive payments from the time they stopped paying Group insurance. "Interestingly, Unum is still paying Supplemental in the amount of $1,150.00 per month, says Peter, "but the Group Benefit pays $5,175.00 per month. In a nutshell this is a clear case of breach of contract. They have basically ruined my life because I bought this policy to protect my family and they have instead ruined my credibility, impacted my dignity, and left my marriage in a shambles due to the stress of unpaid bills and ruined credit.
"You can't put a price on a ruined and drastically changed life. I want all possible damages from Unum available under the law."
With the help of an experienced Unum attorney, Peter may get damages—the courts generally frown upon Unum's bad faith practices.
This is what the Court concluded in McCauley v. First Unum Life Ins. Co., Dec 2008 U.S. App. LEXIS 26094 (2nd Cir.), including a list of more than thirty cases in which First Unum's (as Unum was called in 2008) denials were found to be unlawful, including one decision in which First Unum's behavior was "culpably abusive."
(1) First Unum operated under a conflict of interest because it was both the claims administrator and payor of benefits;
(2) First Unum's reliance on one medical report in support of its denial to the detriment of a more detailed contrary report without further investigation was unreasonable;
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(4) First Unum has a well-documented history of abusive claims processing; and
(5) observations (2), (3) and (4), above, collectively lead to the conclusion that First Unum was in fact affected by its conflict of interest. In light of these observations, we find that a reasonable trier of fact could only come to one conclusion: First Unum's denial was arbitrary and capricious.
The court decided for the plaintiff: McCauley was awarded benefits and interest. There is hope for Peter…