More Security for California Disability Policyholders Thanks to UnumProvident

California disability policyholders may soon rest easier thanks to UnumProvident Corporation. In October 2005, California Insurance Commissioner, John Garamendi, announced a major settlement with UnumProvident, one of the largest disability insurers in the nation, This agreement settles disputes over thousands of claims filed by California policyholders who were unfairly denied benefits by the insurance carrier during the time period between January 1, 1997 and September 30, 2005, and fines UnumProvident $8 million for violating California’s unfair business practices laws. Among the list of 25 unfair business practices outlined in the case against UnumProvident (UP), were the following:

- Applying a definition of “disability” in claims handling in a manner inconsistent with the definition of “total disability” as defined by California law; - Using independent medical exams and other medical information to the company’s own advantage;

- Using portions of medical records and IME findings to UP’s own advantage.

- Overruling the opinion of in-house medical personnel who supported a finding of disability or the need for more specific objective testing. (See full list of business practice violations).

California is not the first state to find UP’s practices illegal and to hold them accountable. UnumProvident signed a settlement agreement with 48 other states stemming from the same practices last year.

How does this help California policyholders going forward? Thanks to UP, the remaining disability insurers in California will now be held to higher standards by the CA Department of Insurance. Garamendi wants all disability insurers throughout the state to be on notice that the Department is watching them, and will soon ask for all of their outstanding policies to review them for state law compliance. So if you are a California disability policyholder, you now stand a significantly better chance of having your claim fairly handled should you ever need to file one.

Want to know more?

  • If you would like to find out how disability claims are handled with your insurer, do the following: If you are employed, contact your employer’s HR person. They can either answer your questions, or direct you to the insurance carrier for answers. If you are self-employed, contact your carrier. If you are a federal or state employee, read State Disability Insurance Overview.
  • If you have disability insurance through a carrier other than UP, have recently filed a claim, and are dissatisfied with how your claim was handled, you can contact the CA Department of Insurance to file a complaint/investigation. After you have contacted the DOI, you may want to consider seeking legal representation to dispute the denial of your claim.
  • If you are one of the estimated 26,000 claimants whose benefits were denied by UnumProvident during the claim period mentioned above, see for more information about UP’s reassessment process and your right to an independent review should your claim be denied yet again.