A History of Unum and Class Action
Unum, the largest disability insurance company in the nation, is no stranger to lawsuits and class actions.
In addition to facing thousands of individual lawsuits filed by policyholders who allege their disability claims were wrongly denied, the company has been on the receiving end of class action lawsuits for insurance bad faith practices since 2002.
Working on the basis of “power in numbers,” a class action is an effective way for ordinary people with equivalent legal complaints against the same offender to take on a powerful corporation.
Under a Unum class action lawsuit, a group (class) of people claiming a common grievance collectively brings a claim (action) against Unum. Disability insurance lawyers act on behalf of the group, and the judgment of the lawsuit is for all members of the group.
Investigation Leads to Unum Class Action
In what has been called “The Unum/Provident Scandal,” Unum (known then as Unum/Provident) had allegedly denied or terminated thousands of legitimate disability claims starting in the 1990s and continuing until 2002.
This occurred to such an extent, the Department of Labor investigated the history of claim denial by Unum. The investigation included Unum’s subsidiary companies, which at the time were Unum Life Insurance Company, Paul Revere Life Insurance Company, and Provident Life and Accident Insurance Company.
The Department of Labor found the company to be “unfair and unjust” by deliberately resorting to fraudulent tactics of claim denial in order to contain costs. The claims involved employee group disability policies. In an investigation that involved insurance regulators from 48 states, lawsuits against Unum were granted class action status for violation of ERISA laws.
Under court order, Unum was directed to reopen more than 200,000 denied claims, and to reevaluate the claims based on their merit. To ensure fair and just review and handling of all further policyholders’ claims, Unum was charged with overhauling the methods by which they evaluate and process claims. Unum was also ordered to pay a fine of $15 million to several states.
More Unum Class Action Lawsuits
After such legal actions and repercussions, you would think Unum would curb their claims-handling abuses and learn to play by the rules.
Yet according to a publication by the American Association for Justice entitled The Ten Worst Insurance Companies in America, as of 2007, Unum confessed that only 10 percent of the claims earmarked for reopening under the terms of the previous legal settlements had been reviewed.
Has Unum revamped their claims handling process? Read on about further Unum class action lawsuits.