Insurance Watchdog Petitions California Commissioner to Bar ‘Outlaw’ Insurer

September 6, 2006

Ray Bourhis, the San Francisco lawyer who won multi-million dollar verdicts and settlements against UnumProvident is at it once again. Bourhis, who assisted in Eliot Spitzer’s investigation resulting in Unum being fined $15 million and ordered to reopen 115,000 denied claims and who worked with California Insurance Commissioner John Garamendi in an investigation which resulted in another $8 million fine and another 26,000 claim re-openings, is petitioning the California Commissioner to bar the “outlaw” insurer.

“John Garamendi was right last October” Bourhis said “when he called UnumProvident an ‘outlaw company.’ That’s exactly what they are. And Garamendi should make good on his promise to kick them out of California if they continue breaking the law.”

Last October, California Commissioner John Garamendi announced the completion of a three-year CDI investigation of Unum, Bourhis said. The investigation concluded that the Company was engaged in widespread violations of state insurance regulations and in fraudulent denial practices. Those included using phony medical reports, policy misrepresentations, low-balling tactics and biased investigations as pretexts for cutting off legitimate claims of disabled, and often destitute, policyholders.

“The company was out of control,” Bourhis said. “So, following a line of unanimous trial and appellate rulings by state and Federal courts, Spitzer and Garamendi fired a shot across Unum’s bow, levying the largest fines in insurance regulatory history.”

Garamendi ordered the company to “shape up or ship out,” he said. “But what Unum did,” according to Bourhis, “was to duck under the table and wait for the storm to blow over.”

Bourhis cited the case of Laura Torrance-Nesbitt, a Los Angeles woman stricken with Multiple Sclerosis. Nesbitt and her company, which is headquartered in England, bought a disability policy from Unum. “The woman is clearly, and obviously, disabled,” he says. “But Unum, through its headquarters in Chattanooga, Tennessee, looking for an excuse to cut Nesbitt off in order to save itself millions of dollars over the life of her policy, ordered Nesbitt to submit to a Los Angeles medical exam by one of its so-called ‘independent’ doctors. Two weeks ago, the company then cut Nesbitt off, using the medical exam as an excuse to do so. It’s a complete sham,” Bourhis said. “It’s the same thing they did to thousands people all across the country.

In other recent cases, including Marylynne Saccaro v. UnumProvident and Randall M. West, D.O. v. UnumProvident, the Company continues to cheat its policyholders by under-paying them for disability benefits clearly owed, to save UnumProvident millions of dollars, Bourhis said.

“The truth is that no matter how much you fine them, it still pays for them to do this. In addition to situations like Nesbitt” he charged, “the company is making the disabled, destitute, policyholders whose claims it was ordered to re-open, wait — often for years — for their reevaluations. This is despite the fact that the law requires claims to be handled ‘promptly, fairly and expeditiously.” People with little or no money coming in, who were cheated out of their disability benefits in the first place, are simply being hung out to dry.

“Not only that, but Unum is telling these people that they have to give up their right to recover for their actual losses in order to receive the reevaluations that have been ordered. And if the Company offers a claimant even 5 or 10 percent of what it owes them, its Unum’s position that its insureds can’t do anything to get the rest,” Bourhis added.

“The only solution,” Bourhis said, “is for Commissioner Garamendi to make good on his promise to kick the Company the hell out of the largest insurance market in the world. And that’s what I am calling on Garamendi to do. Period.”

A copy of the letter to California Insurance Commissioner John Garamendi is available through:

Source: Ray Bourhis

Topics Carriers California

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