UnumProvident to be Held to New Standards
California Department of Insurance Reopens Denied Claims
In 2005, the California Department of Insurance ordered UnumProvident to take another look at almost 215,000 denied disability claims. Since UnumProvident is one of the nation’s largest writers of disability insurance, this multi-state agreement sets quite a precedent for other disability insurance companies all over the U.S. The company was also assessed a $6 million fine by the CDI.
This agreement, known as the California Settlement Agreement (CSA) assures that UnumProvident will improve their claims processing and adjust some of their policy provisions in California. The CSA incorporates the claim reassessment process and the adjustments in claims handling practices that were outlined in the November, 2004 multi-state regulatory settlement agreement that has already been ratified by 48 other states.
UnumProvident is making the following changes:
Discontinuing Discretionary Authority – All language that gave UnumProvident discretionary authority to decide who was eligible for benefits and to interpret policy language is now gone. This should make the review process more standardized and fair to all policyholders.
Social Security Disability Income Offset –UnumProvident is not allowed to offset SSDI unless there is proof that it was actually received by the claimant. Previously, they were allowed to offset by estimated amounts and disability insurance payments that were due but not paid.
Changes in Disability Definitions – “Own Occupation” total disability is now defined as not being able to perform the standard duties of the occupation for which the insured is trained and educated. “Any Occupation” total disability is now defined as not being able to perform any work that the insured is educated or trained to perform given their age, experience, physical and mental capacities.
Exclusion of Pre-Existing Conditions – Before the CSA, UnumProvident could deny a claim if it was related to certain pre-existing conditions. The following are conditions that UnumProvident has agreed not to exclude.
- Rehab will not be mandatory in the future.
- They will no longer apply a “self-reported condition” limitation.
- Mental/Nervous Conditions: Limitations only apply if physiological-based disabilities are terminated.
California consumers are the true beneficiaries of these changes. However, since UnumProvident is the global disability leader, it is predicted that many Americans will benefit from these changes as other carriers begin to follow UnumProvident’s lead.
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