UnumProvident continues DI settlement talks with California
By Trevor Thomas
UnumProvident Corp. has postponed its annual investor meeting until Oct. 17 in the hopes it can settle charges by California regulators that the company has improperly denied disability insurance claims.
The company originally had scheduled the meeting for Sept. 21. In announcing the postponement, UnumProvident said it hoped that the delay might enable it to complete a settlement with the California Department of Insurance, which has been investigating the company’s claims-handling procedures.
Last year, insurance regulators in 37 states reached a settlement with a number of disability carriers, including UnumProvident, over certain disability claims denied from 1997 through 1999. The charges originally were filed in 2003.
As part of that settlement, UnumProvident, the leading DI carrier, also volunteered to review more than 200,000 cases filed after Jan. 1, 2000.
But John Garamendi, insurance commissioner for California, declined to accept that agreement, saying the deal “had significant shortcomings,” according to the Los Angeles Times.
Garamendi’s office declined to comment on the latest negotiations or even to acknowledge they were taking place.
In a comment on the postponed meeting, analysts from Bear Stearns Cos., New York, noted UnumProvident set a date for the stockholder meeting about 6 months ago, believing “there was a high likelihood that a settlement would be reached by Sept. 21.”
The company thought the meeting would be a chance to explain to investors the meaning of the settlement and its consequences, Bear Stearns says.
“We do not believe that the postponement indicates a greater likelihood of a possible sale of the company,” the analysts added.
UnumProvident says it will make its October meeting available live on the Web.