Colorado Bill Aims to Prevent Unum-like Denials
In an April 1, 2010 article appearing on lawyersandsettlements.com, Gordon Gibb reports:
With an eye towards preventing the kinds of practices once employed by Unum over the years and under a variety of names, including First Unum, Unum Insurance and Unum Provident, the Colorado Senate in early March passed a bill that would prohibit the payments of bonuses or financial incentives by insurance companies to adjusters who deny or delay meritorious claims or medical care.
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The legislation was proposed to protect consumers from past and current practices of insurance companies that put profit over the welfare of their policyholders. A number of documented examples were provided, including the exposure of $18 million in bonus payments by Unum to insurance adjusters to deny long-term disability and various other claims.
It was reported that Senate Republicans refused to support the legislation, claiming that the bill was unnecessary and that no evidence demonstrative of such practices existed. This, in spite of a widely distributed report from “60 Minutes,” the investigative unit of CBS that provided stunning evidence of such practices.
In a broadcast aired November 17, 2002 the late Ed Bradley conducted interviews with a number of adjusters who worked for Unum Provident. They all stated unequivocally that adjusters were offered financial incentives to close claims.
UPDATE MAY 17, 2010: Colorado Governor Bill Ritter signed Senate Bill 76 into law. The bill’s sponsors, Sen. Carroll and Rep. Primavera are quoted in the Governor’s Press Release as follows:
“Wrongful denials and delays of medical claims have been the top complaints against insurance companies for five years running,” Sen. Morgan Carroll said. “Senate Bill 76 protects consumers from insurance companies actually paying financial incentives to encourage denial of those claims and prohibits companies from putting profits over people’s health.”
“The only thing worse than being sick and having your health care coverage canceled, is the idea that some claims-employee on the other end of a phone was given a bonus to make that decision,” said Rep. Primavera. “This bill is so obviously the moral and right thing to do.”