Georgia officials Tuesday ordered UnumProvident, the nation’s largest disability insurer, to pay $1 million in fines and go on two years probation after an 18-month investigation into its claims practices.
The fine comes as Unum faces investigations in at least two other states, California and Florida, and as it appeals two multimillion-dollar jury verdicts in cases that allege Unum targets policies for cancellation.
Georgia Insurance Commissioner John Oxendine says his order aims to change corporate policy.
”They were systematically looking for any possible shred of data or excuse to deny a policy,” Oxendine said. ”They are going to be required to maintain a certain level of fundamental fairness.”
The order says Unum must not allow lesser-trained claims processors to overrule decisions made by more highly trained professionals including doctors, do a better job of telling policyholders of appeal rights when a claim is denied, and improve record keeping.
The Chattanooga, Tenn., company says it does not have a policy of targeting certain types of claims for cancellation.
Unum says it agreed to the settlement and is working cooperatively with Oxendine’s office. In a statement Tuesday, Unum said it expects the changes required by Oxendine will make it a ”more service-oriented company.”
During the probation period, Oxendine says, his office will continue to investigate Unum’s claims-handling process, including quarterly reviews of complaints and denied claims.
The order affects Unum, which includes Unum Life Insurance Co. of America, The Paul Revere Life Insurance Co., Provident Life and Accident Insurance Co., and Provident Life and Casualty Co. Unum has 25 million policyholders nationwide.