"Finally a light bulb went off: my job required me to terminate and deny claims."Nee worked for Unum from 1994–2002. During that time she worked for the VP of compensation and says she was privy to pre-merger and executive stock-related information. For the last six years she was a Claims Handler, until she was terminated.
Nee was fired shortly after Dateline NBC and 60 Minutes aired an exposé of Unum in October 2002. According to Nee, she was fired for whistleblowing, but Unum said she was terminated for "poor performance," even though she received considerable pay raises up to and including a month before she was terminated. "But if I were Unum I would have fired me too," says Nee. "I was a lead customer specialist giving away Unum's unfair claims practices to regulators."
According to Bloomberg (December 2003), Nee, a veteran claims handler at Unum's head office in Portland, Maine, and other employees there say they started seeing a more ruthless approach to claims. The pressure peaked, they say, in the last month of each quarter—the "scrub months," when managers looked for claims to terminate to get under budget. The company vigorously denies that it rejects claims for financial reasons and says that Nee was fired for poor performance. Nee, who worked for Unum for eight years, confirms that she was terminated, but says it was because the company began to see her as a whistleblower.
"I thought if I went to management and brought to their attention illegal and unfair claims practices, they would listen to me. Instead they put me on probation and basically told me to 'shut my mouth.' Unfortunately management was paranoid about who was blowing the whistle (Dateline NBC had the whistleblowers behind screens—Unum didn't know who they were) so I got caught in the crossfire. But after Dateline aired I was fired, even though I was bringing in millions of dollars for the company—one of their 'best and finest.'"
(In April 2004, The Los Angeles Times reported that "A novel whistle-blower lawsuit filed in Los Angeles alleges that the nation's largest disability insurer, UnumProvident Corp., withheld benefit payments to meet financial targets…Linda Nee claims that she was fired 18 months ago after bringing reports of wrongdoing to the attention of her supervisors.")
What exactly are financial reserves? Nee explains that, when an individual makes an application for a disability claim, there are federal and state regulations that require Unum to set aside a certain amount of money as a buffer to pay for this claim. This buffer creates a liability—or loss—for the company. On the other hand, when a claim is denied, it creates an immediate contribution to profit. So the game of disability insurance is really about how the company can decrease its financial reserves and show a profit.
"Nothing happens at Unum unless they have a financial reserves agenda," Nee adds. "Their motivation is how everything affects the financial reserves. There is no philosophy or internal procedure in place that asks a claims handler to talk with clients. Some handlers have even telephoned clients in the recovery room, right after surgery—Unum isn't a people-oriented company."
According to Nee, this is how it worked while she was an Unum employee.
"Unum tries to identify the 'biggest bang for the buck.' If they can get a list of the financial reserves in decreasing amounts, the manager would tell the claims handler to, say, concentrate on the $5 million claim, then the $3 million claim, etc. Why try to deny a lot of claims when you can deny the bigger claim?
"Say I have cancer, for instance. My claim is $7,000 per month until I am 65 years old, so it could be worth about $4 million. Your claim is only $75,000 so Unum will go after my claim. When I terminate your claim, Unum will only get $75,000 profit. In other words, claim handlers are instructed to locate and terminate the highest claims with the biggest financial reserves. And based on file information that I review, it appears that Unum is still doing this same practice."
How does Nee know that Unum is still practicing this tactic? "I know that because unfortunately, I did it," she says. The bottom line is that Unum has their claims process so fine-tuned that any good Claims Handler can randomly select a claim; put it through the process; deny it and make it look credible—internal protocols are that good.
"At first, I told my boss that I didn't have any deniable claims—but my job was at stake. Then I would simply shut my eyes and randomly pull out a file. That claim would be denied within a reasonable period of time. I was made to do it. I'm not proud of it and that is why, for the past ten years, I've been working with people on the other side of the fence."
Which begs the question: How can any insurance company practice bad faith so blatantly? "Regulators need to conduct more audits in which actual claim files are reviewed," Nee opines. "Insurance is state-regulated, so some insurance commissioners provide little support to insured and they are reluctant to enforce insurance consumer protection laws that are already on the book. Rather than investigate and make an appropriate decision, Unum pays out a certain amount of claims so they can maintain a certain amount of profitability."
Nee goes on to say, "Just about all disability insurers practice bad faith insurance, but Unum crosses the line more than the other companies. And Unum is the only company that has been fined significantly. The multi-million dollar settlement in 2003-2004 also required Unum to reassess 250,000 claims." In January 2006, insidermagazine.com (the site is now blocked) reported that:
"The multi-state settlement agreement reached after an examination by a Boston Law firm cozy with the company spells out that the claims will be reassessed by a special unit formulated within UnumProvident.
But according to confidential employee sources and claimants who have been through the new loop, business is the same despite the agreement that calls for favorable reinstatement of claimants already on Social Security Disability. But the company had provisions written in the multi-state settlement giving them the option to deny those claims again based upon what it deems as incompetence of Social Security Awards."
But did Unum reassess all of those claims? Nee says that, based on the information she has, Unum did reassess the claims but there is some controversy. She believes that only about 60 percent of the claims were reversed, so for 40 percent of denied claimants, the reassessment process didn't turn out well.
And there was no admission of guilt by Unum. "If Unum has done any wrong, they won't reverse their decisions. They will take the claimant into bankruptcy and lowball the settlement on the courtroom steps.
In March of this year, LawyersandSettlements.com reported that a class action was brought against Unum after plaintiff's claims for disability insurance benefits were denied or terminated. But in April 2008, regulators with the DOL had determined that Unum had met all requirements of a Regulatory Settlement Agreement (RSA) that was put into place after the class-action lawsuit against Unum had already been launched…
Why does Nee hit Unum so hard? "Because I think they cross the line more than any other insurance company," she says. "And I can see what is going on in the disability claims industry nationwide. Recently Unum is attempting to deprive insureds of having a witness at independent medical examiner evaluations (IME). They are excluding witnesses based on qualifications." Nee showed this reporter a letter from the Unum Benefit Center (May 2011) to a claimant requesting as much.
"In other words, Unum is now claiming the right of excluding a witness and they have no right to screen witnesses," explains Nee. "And Unum is now claiming that, if an insured wants to audio-record an IME, they must use a court reporter selected by Unum; they have to pay for it; and they have to give Unum a copy of the report. What a good deal for Unum!"
READER COMMENTS
steve
on
Linda Nee gets it !!! Understands the scams that insurance companies pull ---her company goes out of its way to help people.
read between the lines--obviously wrongly terminated by
UNUM managers who care not if a person who paid there
disability policy on time for 20 years starves or worse,
Noone -I repeat noone wants to wake up disabled every day--
Personally think Linda is better experienced and more
helpful than most of the lawyers out there--soeak to linda she is bright and passionate
John Scott
on
EthicsAndJustice
on
If anyone has any current resources for me (as of October 2014) that can help me advocate for the claimant, please respond.
Any and ALL help would be appreciated.
Steve
on
average mom of three
on
If one of your employees made a mistake by misinforming a paying customer and omitting important product information and that mistake cost the customer half a million dollars, I have to believe that you would be willing to try to make that right for the customer.
I have spent the last four years of my life trying to find anyone at Protective Life who has the same ethics and I cannot - and that extends all the way up to and includes CEO John Johns as well as several members of the Board of Directors.
We purchased a “key employee” life insurance policy from Protective Life Insurance Corporation in order to help take care of our family and to be able to continue our family business if anything were to happen to our family patriarch, my father-in-law.
After paying on this policy for 7 ½ years, as we were dealing with severe health emergencies our child was having, I paid the premium late. It was completely my fault.
Actually, every bill that came in the mail was paid late during this time. My child was dying and we could not get a diagnosis as to what was causing this, nor could it be controlled. (We were able to get her into the Mayo Clinic and finally get a diagnosis after two years of her suffering). I understand that is not an acceptable reason to pay bills late, and for that reason, our life insurance policy was cancelled - as was the insurance on all of our personal & company vehicles with State Farm, and commercial building insurance with Allied Insurance. In order to become insured again, we needed to apply for reinstatement with each of our three insurance companies.
Our State Farm agent spoke on the phone with my father-in-law to process their reinstatement application process and asked him “Have the vehicles you are applying for reinstatement of suffered any damage since they were last insured?” and my father-in-law answered honestly, “No, nothing has happened to decrease the value of these vehicles since they were insured with your company last month. We were just late paying the premium and that was due to family emergencies.”
Our Allied Insurance agent spoke on the phone with my father-in-law to process their reinstatement application and asked him “Has the commercial building you are applying for reinstatement of suffered any damage since it was last insured?” and my father-in-law answered honestly, “No, nothing has happened to the building we are insuring since it was insured with your company last month. We were just late paying the premium and that was due to family emergencies.”
The Protective Life Customer Service Consultant I spoke with told me that we could also apply for reinstatement for our life insurance policy. She then emailed me the reinstatement form for my father-in-law to complete. Her only instructions were that he should complete this form, sign and date it and fax it back.
We were told that if the underwriters approve reinstatement, we would be good to go.
On this reinstatement form, my father-in-law provided all contact information for his physician He also signed a full medical release for the underwriters to obtain all medical records needed in order to make any decision on the reinstatement of this policy. Since this was a “key employee” policy, both the customer service consultant and the underwriters would have been aware that not only was there a family who would need this policy in the event of a tragedy, but a business that depended on it as well.
After his wife passed away, my father-in-law re-titled all assets to make his last wishes perfectly clear. He had TOD titles on all real estate and vehicles, joint ownership on all bank and brokerage accounts, beneficiaries recorded on his annuities and one beneficiary of his Protective Life insurance policy. This was done so that no one could contest a Will and to make disbursing his estate very simple.
At that time, had Protective Life Insurance Company rejected the reinstatement application, my father-in-law had several options available to him. He could have sold the profitable business and he could have stayed on as a consultant, could have sold the commercial building and paid rent to the new owner for his business, could have sold his home, or he could have restructured the title of other assets to make available the amount he and his wife designated as appropriate for their son to inherit. Several different options were available for him to restructure his assets – but only while he was alive.
However, none of that was necessary, since reinstatement was approved as confirmed by the letter we received. And, per the customer service consultant, we were now “good to go”.
Unfortunately, 4 months later we lost our family patriarch.
When the representatives from State Farm and then Allied Insurance went over their insurance reinstatement form with my father-in-law, their questions were asked has the item you are insuring received any damage since it was last insured.
With that mindset, our loved one answered his health questions – “No, nothing has changed with the item of value we are insuring (himself) since we were last insured, we were just late with a premium payment and that was due to family emergencies.”
The representative never once talked to our loved one during this reinstatement process - She did not clarify the form to him, she did not complete the form with him (like our other two insurance agents had), she did not review the information on the form with him when it came back to her. Even when he left off his height and weight, she contacted me and asked me to tell him instead of contacting him directly.
If she had done any of these things, the mistake he made in completing the reinstatement form - health questions were asked have you ever – not since you were last insured - would have been found and corrected. If at any point during the reinstatement it would have been disclosed that Protective Life chooses to restart the two year deniability period again, my father-in-law would have had the opportunity to restructure assets to cover his son’s inheritance for that time period.
But none of these things were done and only as we are dealing with the death of our loved one, and still trying to get a diagnosis for our child did anyone from Protective Life disclose that they chose to start the two year deniability period again upon reinstatement. This is not an industry standard, but even if it was, we would have no way of knowing that unless we were told.
There is absolutely no mention of this in any of the communications we received during the reinstatement period. We did not realize it was our responsibility to verify what the Protective Life representative had told us – we do not do business as consumers or business owners with companies that do not stand behind what the representatives say.
Therefore, we did not call another customer service consultant to verify the reinstatement process as explained to us, we did not have our corporate attorney review the reinstatement form before submitting it, nor did we ask him to review the original policy.
This was a miscommunication between an elderly gentleman completing his first and only life insurance policy reinstatement the same as he had just done with two other insurance companies and their policy reinstatement and an employee of Protective Life who earns their salary working in the reinstatement area.
The Protective Life Code of Business Conduct states:
“Our Values
Throughout our Company's history, our mission has remained boldly alive in our name. We are Protective. We are committed to tearing down the barriers that prevent so many people from enjoying the peace of mind and satisfaction that come from taking care of their future financial needs and the needs of those who depend on them. This is our purpose. This will be our legacy.
Four core values guide us in all that we do: Do the Right Thing, Serve People, Build Trust, and Simplify Everything. We serve with integrity and honesty, treating each of our customers the way we would like to be treated.
Each of us is responsible for the integrity of the Company, and each of us must be willing to raise ethical concerns. People in management positions have a special responsibility to demonstrate high ethical standards and to create an environment that requires ethical behavior.”
In direct contrast to stated code of business conduct, we have enjoyed nothing even remotely close to peace of mind from purchasing this life insurance policy, our financial future has been ruined – even while working seven days a week at our business, we are still not able to pay our bills – our home has been placed in foreclosure, our utilities have been turned off multiple times due to non payment, our children’s future education has been taken stolen as they cannot take out loans and we certainly cannot co-sign for them as our credit is now ruined. Had anyone we came in contact with during the reinstatement process that was told this life insurance policy was my husband’s entire inheritance done the “right thing” and fully explained the reinstatement procedure – ESPECIALLY including the two year deniability period starting over, none of this would have happened. Has this reinstatement process been simplified, as in the representative processing the reinstatement application actually spoken even one time to the individual completing the form - none of these things would have happened.
Oh, and as for “treating each of our customers the way we would like to be treated” – saved the best for last with this one –we have been told this it is entirely the fault of our deceased loved one that the form was completed incorrectly and several representatives from Protective Life Insurance Corporation – including their legal counsel have accused our loved one of trying to commit fraud.
We did everything we were instructed to do in order to reinstate this policy. The blame for this miscommunication error should not be placed solely on the customer.
It has been a long four years. We as a family are nearly bankrupt and our business is not far behind. This insurance policy was our safety net for when we lost 50% of our family business. It never occurred to us that we needed a backup in case Protective Life decided not to honor the reinstatement that was approved on this policy.
All I have received in response to my efforts to get someone at Protective Life to see how this mistake happened is dozens of letters telling us how they are not legally responsible to pay this policy.
There is not one person associated with Protective Life Insurance Corporation - up to and including CEO John Johns - who feels any sense of responsibility that due to the careless way the reinstatement of a half a million dollar "key employee" life insurance policy was handled that a family of good decent people is losing everything. We would be better off financially if we had never even purchased life insurance in the first place.
If we had never even bought “key employee” life insurance in the first place, my husband would have received his inheritance from other assets that were most certainly available from his parents’ estate. Instead those assets were disbursed according to his parents’ wishes because we have written communication from Protective Life Insurance Corporation stating that this insurance policy was reinstated.
Protective Life stockholders did not suffer because my premium payment was late. My family will suffer – for generations, if we do not receive some sort of resolution to this with Protective Life.
Frederick Palmer
on
admin
on
You might find the information on that page of interest as well. Depending on the merit of your story, and please understand that as a news agency we need to ensure the facts of a story are true and rightfully represented, we might then have one of our journalists contact you for an interview, or we might further share your story via our social media channels or blog--but you first have to share the factual details, and the best place to start is by sharing your story at the link above.
You also might find this State Farm car totaled (or actually NOT totaled when it should have been) story of interest: http://www.lawyersandsettlements.com/articles/state-farm-totaled-vehicle-compensation/state-farm-write-off-10124.html
If you'd also like to submit your details for a car insurance fraud lawyer to review, you can do that here: https://www.lawyersandsettlements.com/submit_form.html?label=bad-faith-insurance
Hope this helps!
shirley sarmiento
on
Kenneth M. Czarnecki II
on