Ten Worst Insurance Companies In America (Part 2)

THE TEN WORST INSURANCE COMPANIES IN AMERICA (Part II)

Part II

UNUM

CEO: Thomas Watjen – 2007 compensation $7.3 million

Profits: $679 million (2007)

Assets: $52.4 billion[1]

Unum, a leading disability insurer, with a reputation for unfairly denying and delaying claims which have been the subject of regulatory and media investigations.

Best example is the case of Debra Potter, a financial services worker who developed multiple sclerosis and filed a disability claim with her insurer Unum. Unum denied the claim as “self-reported”. Her doctor confirmed in writing that her complaints were completely legitimate, but Unum continued to deny the claim for 3 years, even after appeals by her employer and the Social Security Administration concluded she was totally disabled. After Porter finally hired an attorney, Unum paid.[2]

Funny thing about Potter’s case is that she spent years selling Unum policies to her financial clients. She thought they were safety nets, but with all of her knowledge of the industry, she couldn’t get paid herself.

When CEO Harold Chandler was forced out in 2003, former employees had gone on the record saying Unum ordered them to deny claims to meet cost saving goals, and memos came out that the company had moved from a “claims-payment to a claims-management” approach. A 1% decrease in benefit cost would save $6 million annually.[3]

Chandler still left with $17 million in severance and pension benefits.

In 2005 Unum settled with 48 states insurance commissioners over claims handling practices, agreeing to reopen 200,000 cases and pay $15 million.[4] In California, nearly 25% of claims for long term care were denied. California Insurance Commissioner John Garamendi called Unum an “outlaw company”.

They have not stopped. In 2007 Unum admitted it had only examined 10% of the cases they had agreed to reopen. In a recent case, a man who had quintuple bypass and several stents placed in arteries was ordered to stop work by his surgeon, but Unum said he was not disabled and could still work – a decision the U.S. 9^th Circuit Court of Appeals described as defying medical science.[5]

Unum’s activities helped cause Senator Charles Grassley (R-Iowa) to ask the Government Accounting Office to investigate them, and he personally asked Unum CEO Thomas Watjen to explain Unum’s policies and practices.[6]