UNUM Forced To Approve 42% Of Reviewed Claims

Social Security employees may wonder why I post from time to time about goings-on in the world of Long Term Disability (LTD) insurance, provided under employer pension plans. Trust me, there is a big interplay between LTD and Social Security. Many people concerned with Social Security matters, such as attorneys who represent Social Security claimants and interest groups that lobby on Social Security matters, pay a lot of attention to what is going on in the LTD world.

This is from the Insurance Journal:

In a forced self-review, the Chattanooga, Tenn.-based Unum Group agreed to fully or partly reverse 42 percent of previously denied disability claims and paid out $676 million in additional benefits.

The Tennessee Department of Commerce and Insurance said the agreement with the Chattanooga-based insurer involved a review of claims from January 1997 through 2004.

An investigation of complaints about Unum's claims handling led to a $1 million fine in March 2003 after Georgia's insurance commissioner said regulators found a mindset of looking "for every technical legal way to avoid paying a claim.'' ...

Company spokesman Jim Sabourin said the reviews have been based on new standards and do not necessarily mean mistakes were made the first time.

"Essentially we are pleased that the exam process has been concluded and particularly pleased with the results,'' he said. "We have taken a lot of steps over the last couple of years to improve our claims practices and processes.''

Sabourin said the company handles about 400,000 claims a year and pays out about $6 billion in benefits, including $4.3 billion for disability.

He said the review started with the company sending about 300,000 letters to customers. About 70,000 of those "opted in,'' and about 20,000 of those responded and had their claims reviewed.

Sabourin said 41.7 percent of those 20,000 were reversed.