Unum - Controversy

Controversy

Unum became the focus of massive negative media attention in 2002, after several plaintiff's attorneys who had sued the company went to national television outlets claiming that the company had quotas for closing claims. CBS's 60 Minutes aired a very devastating article about Unum's alleged abuses. Among their proof was a notorious "Hungry Vulture Award" offering employee rewards to close claims. Due to its admitted unfair business practices, investigations, and fines, Unum was called an "Outlaw Company" by the former California Insurance Commissioner, John Garamendi (who later became Lieutenant Governor). Unum attempted to counter the accusations by noting that "only 2% of the policyholders who filed a claim with the company last year were found not to be disabled, an amount consistent with prior experience," and that court judgments in the prior year were in the company's favor 75% of the time, however no attempt was made to clarify the short term vs. long term statistics.

In December 2004, the company and 47 states entered into a regulatory settlement agreement. The multistate review was completed in April 2008. In a press release, resigned former Maine Insurance Superintendent Mila Kofman said, "Not only is this an example of state insurance regulators working effectively to protect the nation's insurance consumers, it is also an example of an insurer reforming its practices and becoming a model for other insurers. The strong new processes and the resulting change in corporate culture - measured by a very low rate and in some cases a 0% error in claim determinations is remarkable."

Advising the United Kingdom government on claims since 1994, Unum has been involved with the UK's controversial Welfare Reform Bill. Unum was investigated by the BBC in England and were described by critics as a 'rogue firm'. In July 2010, Susan Ring, the CEO of Unum UK left her post and was replaced by Jack McGarry from Unum US, who was replaced in 2012 due to poor performance of the UK subsidiary.