Disability Insurer's Problems Continue
January's Corner also included an article about a health care provider who successfully sued UnumProvident for illegally denying disability benefits to bolster their bottom line. [www.oandp.com/news/jmcorner/2003-01/4.asp] Last week's USA Today included a follow-up article noting that the nation's largest disability insurer is still under investigation in Florida and California, and has been fined $1 million USD and placed on probation by the state of Georgia.
Georgia Insurance Commissioner John Oxendine is quoted as stating that UnumProvident employees "were systematically looking for any possible shred of data or excuse to deny a policy" to disabled citizens in his state. The order he issued prevents this insurer from allowing lesser-trained claims processors to overrule decisions made in Georgia by more highly trained professionals, including doctors. During the two-year probation period, the Insuance Commisioner's office will continue to investigate Unum's claims handling process.
According to USA Today, Unum agreed to this settlement and stated that the required changes will make it a "more service-oriented company".
Today, UnumProvident announced they have dismissed their 53 year old Chairmen and Chief Executive Officer because "a leadership change was in the Company's best interest." This comes on the heels of last week's announcement that they will retroactively reduce their 2000, 2001, and 2002 income by $29.1 million USD following an investigation by the Securities Exchange Commission.
According to the Dow Jones Newswires, UnumProvident explained the restatement of earnings by noting that "disruptions can occur when companies merge", referring to the 1999 merger between these two insurance companies. The departing CEO will receive $8.5 million USD in severance payments and an equal additional amount in pension benefits. The full article is online at www.smartmoney.com.
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