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 Article of Interest - Insurance

Disability insurer hit with class action lawsuit
by Devlin Barrett, Newsday.com, November 5, 2002
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Original URL: http://www.newsday.com/news/local/newyork/ny-bc-ny--disabilitylawsuit1105nov05,0,693614.story

The nation's largest disability insurer was hit Tuesday with a class action lawsuit charging the company wrongly denied thousands of claims in order to cut costs.

The suit, filed in Manhattan federal court, charges UnumProvident Corp. "has illegally victimized, and continues to victimize, many thousands of disabled Americans."

UnumProvident has already been sued by a former doctor at the company, who leveled similar allegations, and by numerous policy-holders with denied claims.

The new lawsuit claims non-medical personnel at UnumProvident routinely determine which claims should be denied, and then use their own medical staff to create a "paper trail" to justify the decision.

The suit charges UnumProvident and its subsidiaries "operate long term disability denial factories, efficiently denying claims, not on the merits of an individual claim but, rather, to satisfy the self-interested financial goals of UnumProvident and other group insurers."

The suit, filed by four people whose disability claims were denied by UnumProvident, seeks unspecified monetary relief and asks the courts to order UnumProvident to re-evaluate all of the claims it has denied in recent years.

Company spokesman Tom White declined to comment on the suit because UnumProvident had not yet seen the court papers. UnumProvident has previously called the charges "absolutely false."

The company has said it handles 30 percent of the nation's disability insurance business, and rejected about 2 percent of disability claims in 2001.

About 3,500 people work for UnumProvident in Portland, Maine, where the former Unum Corp. was founded. UnumProvident was created by the 1999 merger of the Unum Corp. and The Provident Companies, based in Chattanooga, Tenn., where there are more than 2,217 workers.

UnumProvident employs about 100 doctors at claims offices in Chattanooga; Portland; Worcester, Mass., and Glendale, Calif.
 

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