Apr 6, 2007

RICO Claim Against UNUM Allowed To Go Forward

Law.com reports that UNUM lost a big one. The Third Circuit Court of Appeals allowed a lawsuit to go forward against the company under the Racketeer Influenced and Corrupt Organizations (RICO) Act. The lawsuit concerns UNUM's practices in terminating Long Term Disability (LTD) benefits. Damages under RICO can be ruinous. Additionally, losing a RICO suit gives a company the taint of criminality.

LTD benefits are typically reduced because of the receipt of Social Security disability benefits. While LTD is of no direct concern to the Social Security Administration, it is of huge concern to many people receiving Social Security disability benefits. UNUM is, by far, the largest writer of LTD insurance.

1 comment:

Anonymous said...

I am glad to see a case like this filed. Some insurance companies arbitrarily deny legitimate claims because they know a certain percentage will not pursue it, resulting in big savings to the company. Such conduct is no less fraudulent than that of a claimant who lies to get benefits. The penalties for companies employing such tactics should be severe.