Insurance
Commissioner John Garamendi
California Department of Insurance
45 Fremont
Street, 23rd Floor
San Francisco, CA 94105
Re: California Settlement Agreement and Reassessment Process
Dear
Commissioner Garamendi:
As
you know, on October 3, 2005, you announced the results of a three year investigation
against Unum Life Insurance Company of America, Provident Life and Accident Insurance
Company, and The Paul Revere Life Insurance Company (hereinafter "UnumProvident").
As a result of your investigation, and following a number of unanimous verdicts
and appellate rulings against the Company, holding it guilty of unlawful claims
practices, you found that UnumProvident was fraudulently deceiving claimants regarding
their coverage and was unlawfully refusing to pay benefits owed to its insureds.
You
ordered UnumProvident to reevaluate over 26,000 previously denied or terminated
claims, levied an eight million dollar fine against the Company and directed it
to stop engaging in the unlawful activities set forth in the Department's findings.
Calling UnumProvident "an outlaw company," you warned that if it continued
to violate California law you would revoke its license to do business in this
State.
I am writing at
this time to ask you to proceed based on that warning. You were right. UnumProvident
is an outlaw company. Furthermore, the very people who caused the problems revealed
by your three year investigation, are still with UnumProvident, and the practices
continue.
Just last week,
UnumProvident, through its offices in London and Chattanooga, terminated disability
benefits to Los Angeles resident, Laura Torrance-Nesbitt -- a woman with multiple
sclerosis. UnumProvident did this the same old way. It required Laura to submit
to a so called "independent medical examination", conducted, in this
case, by a Los Angeles doctor. Despite the fact that she is clearly disabled,
UnumProvident, following its IME, terminated Laura's benefits. Our attempts to
resolve the matter in time to prevent Laura from having to pull her children out
of school, and to save her from having to sell property and begin depleting her
life savings, have failed. The Company is simply going to drag the matter out
using delay and playing legal chess with the survival of its policyholder at stake.
In other recent claims,
including the cases of Marylynne Saccaro v. UnumProvident and Randall West, D.O.
v. UnumProvident, the Company also cheated its policyholders by under-paying them
disability benefits that were clearly owed in order to save UnumProvident millions
of dollars.
UnumProvident
continues to underpay, deny and terminate legitimate claims, offering destitute,
disabled people settlements amounting to only a fraction of what they are owed.
By doing this, claimants are forced to choose between either accepting low-ball
offers made to them or engaging in years of protracted litigation.
Several
months ago, I spoke with CDI General Counsel Gary Cohen regarding a number of
problems with the way UnumProvident was continuing to do business. These problems
included the fact that UnumProvident was forcing the very claimants it had cheated
in the first place, to wait for months and even years for the "reassessments"
you had ordered. The Company is simply refusing to discuss or negotiate these
claims. This violates California insurance regulations which require that claims
be handled "promptly, fairly and expeditiously". It also violates insurance
laws which require insurers to negotiate in good faith claims arising under insurance
policies. Given that disability claimants are often unable to work, delay in the
processing of their disability claims often causes severe and irreparable hardship.
In severe instances it can result in the aggravation of life threatening medical
impairments, and in death. If a UnumProvident claimant should die, of course,
the Company's obligations to pay benefits would cease.
UnumProvident,
through its extensive in-house medical and actuarial staff is well aware of this
latter point.
Beyond
this, I brought to Mr. Cohen's attention that UnumProvident was requiring insureds
whose claims had been denied in bad faith, and who were seeking reassessments,
to give up their rights under existing California laws which permit victims of
bad faith denials to recover damages for bankruptcies, evictions, foreclosures
and other resulting losses.
Several
days after our conversation, Mr. Cohen informed me that he had spoken with UnumProvident's
Maureen Griffin and that she was going to contact me in an effort to address at
least some of these matters. Since that time, I have made numerous attempts to
resolve these matters with Ms. Griffin. All of these attempts have been to no
avail. Several weeks ago, my office received notice from UnumProvident that Ms.
Griffin was no longer handling this matter and that I should speak with UnumProvident
employee, Matthew Monaghan. On three separate occasions, I attempted to schedule
a telephone conference with Mr. Monaghan. This effort was also to no avail. Finally,
I was told by Sean Nalty of Kelly, Herlihy & Klien in San Francisco that he
had been directed, as a UnumProvident outside attorney, to take over this matter.
I subsequently attempted to discuss all of this with Mr. Nalty, but that effort
has also been to no avail.
I
do not believe UnumProvident will ever begin to handle claims as is required to.
There is simply far too much financial incentive for it to refuse to do so.
For the above reasons we respectfully request that you initiate expedited
proceedings forthwith to revoke the right of UnumProvident's and its associated
companies to sell insurance policies of any kind in this state. We also respectfully
request that you investigate the response of Unum to your October 3, 2005 Order
and take all necessary steps to enforce and/or modify that Order, to prevent further
unlawful behavior by this Company, in the claims handling remaining to be completed.
Thank
you for your consideration of this matter.
Sincerely yours,
RAY BOURHIS & ASSOCIATES
Ray
Bourhis
Kelly Cowan
cc:
Gary Cohen Esq.
General Counsel