Unum Group Agrees to Settle Unum Lawsuit for $46 Million

Los Angeles, CAThe insurance provider known in recent years as Unum Group has struggled beneath a black cloud of controversy amidst accusations of wrongdoing and bad faith insurance. While the insurer has undertaken various efforts to distance itself from a reputation that has dogged Unum insurance for some time, continuing Unum lawsuits appear to suggest that consumers are still having their problems with Unum, or so it is alleged.

Earlier this month, a settlement worth $46 million was granted preliminary approval following a class-action Unum Insurance lawsuit alleging Unum improperly calculated long-term care benefits on behalf of its policyholders.

Unum Group, known previously as Unum Provident and First Unum, has been accused variously of bad faith conduct with regard to Unum long term disability insurance, denial of legitimate claims and other alleged conduct.

This latest Unum Life Insurance lawsuit was brought in US District Court, Central District of California (Don et al v. Unum Group et al, Case No. CV 13-4502-DSF [VBK]).

Plaintiffs are Michael Don, identified as the Executor of the Estate of Ruben Don, Leroy Little, Tamara Pelham and Carolyn Jan Little. Defendants are Unum Group of Delaware, and Unum Life Insurance Company of America, based in Maine.

According to the Unum long-term care insurance lawsuit, plaintiffs alleged that Unum used the “effective date” of the policy rather than the actual policy date, when calculating the policy anniversary. This alleged miscalculation, the lawsuit asserts, cost plaintiffs and class members in excess of $18 million.

It was also alleged in the lawsuit that Unum Group, when calculating increase for inflation, based its calculations on the “remaining” Lifetime Maximum Benefit Amount. Plaintiffs held that this was done, in spite of the word “remaining” appearing nowhere in language pertaining to riders for inflation protection or the provision for a benefits increase. This error is alleged to also have cost plaintiffs and class members in excess of $18 million.

Plaintiffs also asserted that when duplicate copies of their long-term care policies were requested, exact copies of the original policies were not duly provided by Unum.

According to the terms of the settlement, an additional six weeks’ worth of benefits (or 1.5 months) based on the insured’s original monthly benefit amount as stated in the policy would be payable to those insureds who reach their Lifetime maximum Benefit Amount.

A fairness hearing is scheduled for June of this year. The exact amount of the settlement as initially approved is $45,988,014.52 million with final approval pending. Unum denied any wrongdoing in the matter, but agreed to the settlement in part to avoid further litigation stemming from the Unum lawsuit.