Unum UK CEO Takes Over Individual Disability Policy Block

Unum announced last week that Jack McGarry, former CEO of Unum’s United Kingdom arm, has been brought back to the U.S. to manage Unum’s closed block of business.  This “closed block of business” includes its individual disability policies issued prior to the mid-1990s–the type of policies that Unum no longer sells.  According to Unum Group CEO Thomas Watjen, Unum hopes that McGarry’s experience will benefit the company:

“Our closed block of business represents over 25 percent of our capital, and I’m confident that Jack’s significant financial and operational expertise will help us improve the performance of this business.”

Unum doesn’t explain what it means by “improving the performance of this business.”  The policies McGarry will be managing aren’t sold anymore, so he can’t improve that block’s performance by changing the way policies are sold, who they are sold to, or how they are priced.  And at this point, Unum has to honor the outstanding policies as they are written, so he can’t lawfully help the block improve performance by skimping on benefit payments.

Watjen’s statement could mean that McGarry, who has discussed Unum’s confusing policy language in the past, will help the individual disability department better serve customers by making Unum’s communications easier to understand.  However, it is also likely that “improving the performance” of that block of business means that McGarry will focus the company’s efforts on continuing to scrutinize claims made on the individual policies to avoid paying benefits (and thus save Unum money).  Either way, our disability insurance attorneys will be closely monitoring Unum and any new developments under McGarry’s leadership.