Trial Under Way in False Claim Charges Against Unum

BOSTON, Sep 26, 2008 (A. M. Best via COMTEX) -- UNM | Quote | Chart | News | PowerRating -- A trial is under way in a Boston federal court on allegations that Unum Group devised a scheme to illegally deny or terminate long-term disability claims.

According to allegations in a whistleblower suit filed against the insurer, Unum (NYSE: UNM | Quote | Chart | News | PowerRating) required claimants to file first for Social Security disability insurance benefits even when they didn't qualify. If they didn't apply to Social Security, Unum would cut their benefits. Social Security has much stricter criteria for disability benefits than private insurers.

The complaint said Unum provided financial incentives to in-house physicians who would rubber-stamp decisions, and authorized senior in-house doctors to change the written reports to justify a claim denial or termination.

The suit was filed in 2003 under the federal False Claims Act.

Unum has said its own internal review and claims reassessment addressed any past problems (BestWire, Sept. 5, 2007).

Unum Ltd. has a Best?s Financial Strength Rating of A- (Excellent).

Shares of Unum Group were selling at $26.11 in late-morning trading on Sept. 26, up 2.35% from the previous close.

(By Alyn Ackermann, senior associate editor, BestWeek: Alyn.Ackermann@ambest.com)

More News:   Market Updates | Stock Alerts | All Trading News | Stock Index