A second look: UnumProvident is poised to reopen and reconsider more than 215,000 denied disability claims.

Disability insurers have a kinder and gentler approach to claims, and this trend is likely to continue now that the largest writer of disability insurance in the United States has inked a 48-state multistate settlement agreement offering to reopen 215,000 previously denied claims.

On Nov. 18, 2004, UnumProvident and its subsidiaries, including Unum Life, Paul Revere and Provident, entered into multistate settlement agreements with state insurance regulators led by Maine, Massachusetts and Tennessee. These agreements were related to disability claims handling practices. The U.S. Department of Labor and the New York state Attorney General's Office also joined in the agreement, and as of Feb. 1, 2005, every state except California and Montana had signed onto the multistate settlement agreement, or MSA.

A principal feature of the MSA is the claim reassessment process, where UnumProvident agreed to reopen and reconsider as many as 215,000 disability claims denied since Jan. 1, 1997.

Under the reassessment process, UnumProvident is required to notify insureds whose claims were denied between Jan. 1, 2000, and Dec. 31, 2004, of the opportunity to have their claims reconsidered. These claimants have 60 days from the date of their notice to register for reassessment, then 180 days to submit their reassessment package.

However, UnumProvident will not be sending any notices to insureds denied between Jan. 1, 1997, and Dec. 31, 1999. Unfortunately for these claimants, the only notice is through word of mouth, newspapers and other publications, and the Internet. These insureds must formally contact UnumProvident within 180 days from the date their state signed the MSA or be precluded from participating. Once they have requested reassessment, they have 180 days to submit their reassessment package.

The reassessment process is expected to take two years as UnumProvident evaluates the earliest denials first, then moves on to later years. If UnumProvident determines that a claimant is disabled, the insured can expect to receive past benefits and go back on claim, and possibly interest and attorneys' fees.

As a result of the MSA, UnumProvident will enhance its claims procedures and add "New Claims Objectives." These include giving significant weight to Social Security disability awards; giving weight to objective, subjective and the treating doctors' opinions to evaluate impairment; looking at comorbid claims collectively; selecting unbiased, financially disinterested, fully trained medical examiners for independent medical examinations; requiring that in-house doctors be skilled and have all medical information before making impairment findings; having senior claim management involved at the earliest stages of a claim; and requiring that claim personnel undergo rigorous training on the new claim objectives to ensure best claim practices.

These new claim objectives should create a bright-line, good-faith checklist, not only for the disability leader, but for the rest of the carriers as well. They promote what we all look for in disability insurance--the peace of mind and security, trust and confidence a multibillion dollar carrier brings to the disability table.

UnumProvident also agreed to keep these new claim objectives in place after the reassessment process ends, so there can be no doubt of the positive long-term effect the MSA will have. With the industry leader setting the goodfaith table, disabled insureds across America come out on top. This agreement brings hope to those truly disabled insureds who may have been displaced or had their medical care cut off as a result of their claim denial. Finally, for insureds with claims denied between January 1997 and December 1999, their statutes of limitation have passed and the opportunity to get a second chance at benefits is something we can all stand up and cheer about.

While some have pointed to what they see as the shortcomings of the MSA, namely the size of UnumProvident's penalty, the failure to formally notice denials from 1997 to 1999, and why claim administered UnumProvident companies were not included, I am very positive on the MSA. We can now look past blown statutes, forget about arbitrary and capricious standards, and offer a helping hand to those truly disabled who need our guidance and encouragement while they rebuild their lives.

It achieves little to heap trash on an agreement inked by 48 states, their respective departments of insurance and the Department of Labor. Let's all do good by doing right by the MSA because good faith is good business--it's good for the carrier, good for the investors, good for Wall Street and good for the policyholders to get the benefits they richly deserve.

Frank N. Darras, a Best's Review columnist, is a partner with law firm Shernoff Bidart Darras LLP, Claremont, Calif. He is a plaintiff's lawyer representing disabled insureds. He can be reached at [e-mail]