Nearly all generally accepted claims practices established by the National Association of Insurance Commissioners (NAIC Model Acts) and the Employment Retirement Income Security Act of 1974 (ERISA) require insurers to review claims in “good faith and fail dealing”.
In addition, ERISA establishes “fiduciary relationships which require both the employer and Plan Administrator to “decide indeterminable issues in favor of the claimant”. Unfortunately, although the concept of “good faith and fair dealing” is a part of every recommended disability claims practice, it isn’t law and cannot be enforced, although nearly all of the states recognize the Model Acts.
The opposite of “good faith and fair dealing is “bad faith” that can, of course, be decided by a jury. ERISA folks are unfortunately left with conflicts in federal court about which “standard of review” the judge will use in determining the case in review. Even though bad faith exists ERISA claimants are deprived of the opportunity of offering it as an argument in support of their legitimately payable claims.
The point is that there are rules and accepted claims practices insurers are required to follow in evaluating disability claims and making decisions as to whether to pay or not pay claim. Some accepted claims practices mention “fair, objective and equitable review”. Still, in the last decade, Unum Group continues to devise deliberate claims review processes that deprive insureds and claimants of anything close to fair and equitable claim review.
In 1999 after the Provident take-over of Unum Life Insurance, whistleblowers exposed the new company’s deceptive claims practices to the media and all hell broke loose.
Interestingly, public exposure of Unum’s internal processes is happening again. Terminated Unum employees are contacting members of the press and media and thankfully have included DCS, Inc. in the information thread.
The information provided here may or may not be exactly described by employees in Chattanooga at the time it was reported to DCS, Inc., but it will give readers a sense of how far Unum goes to deny as many claims as they can. Unum’s claims process, as described by those who worked for the company, deliberately targets claims on a grand scale and then harasses its claims specialist until the claims are actually denied.
Whether or not Unum’s claims process today is exactly as described, it does presuppose that Unum, whatever system currently in place, continues to target and deny claims unfairly.
THE TARGETING WAREHOUSE – IMT SHEETS
As was always my experience with Unum, its business is managed by establishing claim financial reserves which can be manipulated to show profits which do not exist. As you may recall from other posts “financial reserves” represents money put away equal to the value of each claim as a buffer to be able to pay it. Financial reserves create liabilities (losses) but when removed create profit. There is no financial incentive to pay claims.
Although Unum consistently alleges it does not keep financial reserve claim data, former employees tell me that managers and VP’s continue to have access to reserve information. Unum claim and claimant data is stored on a system called “Navalink”, therefore, all managers and VPs (Quality Compliance) can view claims at random and compile “targeted lists” of claims, presumably those with the highest financial reserves referred to as, “the biggest bang for the buck.”
Claim managers then place the names of their targeted insureds and claimants on a sheet called the IMT sheet, or Integrated Management Technology. As described to me by Unum employees, IMT sheets are very similar to OMAR spreadsheets used in the past to target claims.
I’m told that everyday managers visit each claims handler in their cubicle and give them an IMT sheet containing names of insureds and claimants to “focus” on that day. It seems reasonable to me to presume this sheet also contains the names of claims with ERDs (Expected Recovery Dates, or “dates we intend to deny these claims) on it.
I’m told that throughout the day, claim managers hassle claims handlers in their unit to declare progress toward denying (resolving) claims listed on the IMT sheets. The IMT sheet targeting process on certain claims is indicative of unfair claims practices because it deprives insureds and claimants of a “fair and equitable review” based on the unique circumstances of claims.
It is also not unreasonable to conclude that once a claim is targeted and placed on the IMT sheet, it will not be removed regardless of what additional information is submitted to the company as proof of claim. This may be why claimants report that medical support of claim is ignored for some while others are approved and paid right away.
IMT sheets demonstrate Unum’s claim targeting process because it is the claim managers, VPs, and Quality Compliance who have access to financial reserve information and who goes on the “sheet” and who doesn’t. Finally, pressure placed throughout the day on claims handlers to continually deny claims clearly indicates a targeting process.
Whether or not Unum continues to use IMT sheets today is not important because its my opinion that Unum continues to target claims regardless of what it calls its current system of “claim focus.”
THE 2 OUT OF 3 RULE
Former Unum employees also describe a “2 out of 3 rule” to provide back-up for claim denials. Again, even if Unum is no longer referring to the process as the 2 out of 3 rule, in keeping with its track record, internal process remains the same but the names are changed to hide them in plain sight.
If claims handlers can convince treating physicians, vocational representatives, employers and others to say insureds are able to return to work, claims are denied when 2 out of 3 resources affirm.
To be clear, the above information was provided to DCS a few years ago from terminated employees who contacted us to share the information. However, there is no indication by letter or file documentation that the company has over time changed its claims process to pay claims rather than finding reasons to deny. The company often changes the names of its processes to hide them in plaint sight, but they exist nonetheless.
Those attorneys who now say, “Unum is better now than it used to be” need to open their eyes and get into the trenches with non-wealthy claimants and listen to what they have to say. From my perspective Unum has NOT changed its targeting focus and remains an unfair insurer.
Disability insurance is not what most middle class Americans think it is, and filing claims, not just one with Unum, but any disability insurer, quickly becomes a confusing and complex process that often does not end with paid benefits.
In today’s insurance environment there is nothing about disability insurance that is “fiduciary” in nature, or applied in “good faith and fair dealing.”
One has to remember after all that “targeting claims” for the “biggest bang for the buck” is an unfair claims practice that Unum has gotten away with for quite some time. Insureds and claimants should always be smart, sit up and take notice, and act accordingly.