State Fines Disability Insurer $8M, Says Company Must Reopen Cases
The Department of Insurance on Monday will announce that it will fine UnumProvident Corporation, the nation's largest disability insurer, $8 million for more than 25 alleged violations of state law, the Los Angeles Times reports (Gosselin, Los Angeles Times, 10/3). The fine is part of a settlement reached Sunday with the Tennessee-based company (Colliver, San Francisco Chronicle, 10/3).
Insurance regulators charge that the company knowingly misused claimants' medical records and the opinions of medical personnel to deny benefits, among other charges. The insurance department also is requiring UnumProvident to reopen as many as 26,000 cases since 1997 in which state policyholders' claims were denied or whose benefits were terminated.
The company did not admit or deny the charges.
According to state insurance regulators, they found violations of state law in almost one-third of a random sample of about 1,000 claims handled by the company. The settlement could alter how insurance is regulated in the state and perhaps nationwide, according to the Times (Los Angeles Times, 10/3).
The fine is the largest in the state insurance agency's history (San Francisco Chronicle, 10/3).