SEC Filing Reveals Unum Bad Faith Insurance Class Action Settlement

Los Angeles, CAOften couched in the financial fine print of regular filings with the US Securities and Exchange Commission (SEC) are details pertaining to legal action brought against the submitting corporation. To that end, Unum Insurance (Unum Group) revealed in its 10-Q report filed back in late July that a settlement had been conclusively approved, bringing to an end a class action Unum lawsuit.

Unum Group has previously been hit with bad faith lawsuits with regard to Unum disability insurance, long-term care policies and other insurance products. Depending on the case, benefits are alleged to have been denied from the outset, or granted for a time only to be clawed back or cancelled. Plaintiffs who have faithfully paid into Unum insurance often protest through the courts, asserting their view that qualifying for benefits according to the contents and language of the policy should not necessarily be met with such roadblocks, or other alleged examples of bad faith.

According to the Unum filing for the period ending June 30, 2016 a purported class action Unum lawsuit was filed in May, 2013 in the Superior Court of California, County of Los Angeles with regard to long term care policies that featured inflation protection. The lead plaintiff in the Unum Group lawsuit (Unum has been known previously as First Unum and Unum Provident) alleged that Unum erred in the administration of the inflation protection feature, resulting in an underpayment of benefits to the plaintiff and the representative class.

“We removed the case to the United States District Court for the Central District of California,” Unum said, according to the text of its SEC filing, “and plaintiff filed an amended complaint on behalf of a nationwide class of insureds who were issued long-term care policies containing an inflation protection feature.

“After we answered the complaint, the court permitted the plaintiff to file another amended complaint entitled Michael Don, Executor of The Estate of Ruben Don, Leroy Little, by and through his Guardian ad Litem Tamara Pelham, and Carolyn Little v. Unum Group, and Unum Life Insurance Company of America containing similar allegations.”

Unum Group, in its filing, noted that in April 2015 the insurer duly answered the amended complaint in the Unum lawsuit. “The plaintiffs filed a motion seeking certification of five subclasses, and we filed our opposition,” Unum continued. “In February 2016, the plaintiffs filed a motion for preliminary approval of settlement for a class of certain insureds issued long-term care policies containing an inflation protection feature as well as certain insureds who requested copies of their long-term care policies.”

“In July 2016, the court issued a final order approving the settlement. We adjusted our previously accrued estimated loss contingency as a result of the final settlement, the amount of which was immaterial.”

The plaintiff, on behalf of class members, alleged breach of contract, bad faith, fraud, injunctive relief, and violation of Business and Professions Code 17200 against Unum Group.