Thursday, April 10, 2014

Unum Reapproval

Unum has an historic tendency to deny and terminate claims at the end of each financial quarter to improve its reserves. A corollary of that accounting tendency is that Unum delays approvals until after a quarter. I just received written notification that Unum reapproved one of my client’s long term disability (“LTD”) claims a couple of days after the first quarter. 

As I do for each of my client’s, sent written notification to Unum in very simple and unambiguous words, “Please ensure that you communicate with me and avoid communicating with my client or her doctors without my prior approval. As it typically does, Unum initially ignored my directions, and contacted the claimant directly anyway. Unum knows that under these circumstances it is not supposed to contact claimants directly. 

To prevent Unum, as well as other LTD insurers, from continuing to contact claimants directly, I found a letter reiterating my direction that they are to refrain from doing so usually fails to deter them. Consequently, I am forced to send threatening letters to ensure that the attorney client relationship is respected. 

I advised Unum that the next attempt to circumvent the representation of my client will result in a complaint being filed with the New York State Department of Financial Services (the “DFS”). Advisory Opinions from the DFS’ General Counsel opine that Unum’s mailing anything to my client without my permission would constitute a wrongful communication.  I add that the DFS has stated that a licensee of the DFS who engages in such conduct may be found to have committed a "determined violation" pursuant to N.Y. Ins. Law § 2402(c) (McKinney Supp. 2005) as an unfair or deceptive act or practice. 

I also provide citations from hornbook law that such conduct violates the Statement of Principles of the National Conference of Lawyers, Insurance Companies, and Adjusters. One of the declarations in the Statement of Principles is that an insurer may not deal directly with a claimant represented by an attorney without such attorney’s consent. The word "deal" is interpreted by the committee to mean to "negotiate," "settle," "do business with," and "negotiate for a settlement or a payment." 

Unlike my letters simply reiterating my request to communicate solely through me, I found that the letters advising of the consequences for continuing to ignore my directions do deter the misconduct.

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