Date: January 10, 2005
For more information contact: Eileen Mallow, Assistant Deputy Commissioner, (608) 266-7843 or eileen.mallow@wisconsin.gov

Wisconsin Insurance Department to Participate in Settlement
Addressing Concerns with UnumProvident Disability Claims Handling

Madison, WI--Insurance Commissioner Jorge Gomez today announced that Wisconsin will participate in the settlement of an enforcement action against three disability insurers, Unum Life Insurance Company of America, The Paul Revere Life Insurance Company, and Provident Life and Accident Insurance Company. Commissioner Gomez's action is the result of a multistate agreement that concludes a targeted, multistate market conduct examination of Unum Provident Corporation.

The settlement requires the three affiliated insurers to change their claims practices and to reassess certain claims going back as far as 1997. Commissioner Gomez indicated that 2,878 claimants in Wisconsin will receive letters offering claim reconsideration. The companies are also required to pay a $270,000 forfeiture to the state of Wisconsin.

"The settlement agreement provides claimants an opportunity to have a claim reconsidered through a supervised claim process," said Commissioner Gomez. Gomez stressed that claimants should consult their own legal advisors about participation in the reassessment process since claimants may be barred from suing or participating in lawsuits against the companies to the extent the reassessment results in payment of their claim. The settlement requires the companies to:

• offer, in writing, to reassess claims denied or closed since January 1, 2000, for reasons other than settlement, death, or reaching benefit maximums (about 215,000 claimants are in this population, 2,878 from Wisconsin);
• allow for reassessment, upon request, of claims similarly denied or closed between January 1, 1997, and December 31, 1999;
• modify claims handling and benefit determination practices as specified by the agreements;
• improve accountability and oversight of claims processes as specified in the agreements; and
• enhance corporate governance by expanding the Board of Directors by three directors with insurance industry or regulatory experience.

Wisconsin, forty-six other states and the District of Columbia participated in the multistate market conduct examination of Unum Life Insurance Company of America, The Paul Revere Life Insurance Company, and Provident Life and Accident Insurance Company that identified the disability claims issues.

The settlement includes an agreement for a Plan of Corrective Action by the companies and that the companies will pay a forfeiture of $15 million, which is divided on a pro rata basis among the participating states based on the long-term disability income insurance premium in each state as of December 31, 2003. If the companies fail to meet the terms of the Plan of Corrective Action, an additional fine of $145 million will be imposed.

The complete Examination Report, its exhibits and the settlement agreements can be found online at www.maineinsurancereg.org; www.state.ma.us/doi/ (look at "What's New"); or www.state.tn.us/commerce.

UnumProvident has established a toll-free telephone number for claimant inquiries: 1-866-278-4641.

Created by the legislature in 1871, Wisconsin's Office of the Commissioner of Insurance (OCI) was vested with broad powers to ensure that the insurance industry responsibly and adequately met the insurance needs of Wisconsin citizens. Today, OCI's mission is to lead the way in informing and protecting the public and responding to its insurance needs. Consumers can contact OCI Information and Complaints by calling 1-800-236-8517, e-mailing ociinformation@wisconsin.gov, or writing P.O. Box 7873, Madison, WI 53707-7873. OCI offers over 30 consumer guides to insurance. A free copy of any OCI publication is available upon request.