Disability Insurance

INSURANCE COMMISSIONER JOHN GARAMENDI ANNOUNCES MAJOR SETTLEMENT AND $8 MILLION FINE AGAINST UNUMPROVIDENT OVER INSURER'S HANDLING OF DISABILITY CLAIMS

Landmark agreement will change the way disability policies are handled in California

LOS ANGELES - Insurance Commissioner John Garamendi on Monday announced a landmark settlement with UnumProvident Corporation that will significantly improve consumer protection and profoundly impact how disability policies are handled in California - and possibly the nation.

The deal requires the nation's largest disability insurers, Unum Life, Provident Life & Accident, and Paul Revere, to pay an $8 million fine, the largest levied in the Department's history. The agreement settles a dispute over thousands of claims by California policyholders who were unfairly denied benefits. UnumProvident will change its policy language and claims handling procedures in dealing with those disputed claims, and all future claims.

Declaring that all disability insurers doing business in California will eventually be required to adhere to the standards set in the UnumProvident agreement, Commissioner Garamendi announced the settlement at the Glendale Adventist Medical Center's Therapy and Wellness Center near Los Angeles.

"This is a new day for policyholders whose disability insurance claims have been wrongly denied by insurance companies," said the Commissioner. "I am making it clear today that policies sold in California will deliver what they promise. In this state, insurers will live up to their end of the bargain."

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