After going after a number of big property/casualty and life insurers, New York Attorney General Eliot Spitzer appears to have UnumProvident Corporation on his radar screen too.
UnumProvident Corporation (NYSE: UNM) today issued the following statement on broker compensation issues after receiving a subpoena from the AG’s office:
“One of the keys to success in our business is building a trusted relationship among customers, brokers, and insurance companies, and this past week that trust was questioned,” said Thomas Watjen, president and CEO of UnumProvident. “We and many others are strong advocates of complete and timely disclosure of the compensation paid to the broker of a customer. With this information, customers can determine whether and how compensation arrangements affect their buying decision.
“In addition to promoting full disclosure, we will further review our compensation policies and procedures to be sure that we appropriately compensate our brokers but do not create any actual or perceived conflict between the broker and the customer,” Watjen added. “As this review is underway, UnumProvident will not enter into any new compensation agreements until this review is completed. The Company is committed to working with the Attorney General of New York, the insurance industry, company officials and other regulators to maintain the trust of customers and the market.”
As noted in the company’s previous public filings, and in response to inquiries, the company indicated that the Office of the Attorney General of the State of New York has issued a subpoena to the company, requesting documents and information relating to compensation agreements between insurance brokers and the company and its subsidiaries. The company has received subpoenas for additional information, including information regarding its quoting process.
The company reportedly continues to cooperate in this inquiry and is providing the information requested.
UnumProvident (UNM) is a provider of group and individual disability income protection insurance in North America. Through its subsidiaries, UnumProvident Corporation insures more than 25 million people and reportedly paid $5.7 billion in total benefits to customers in 2003.
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