Greene LLP Settles with UnumProvident and Paul Revere Over Bad Faith Income Insurance Claim Denial
Last month, Greene LLP attorneys resolved a bad faith insurance case against Unum Life Insurance Company and subsidiary The Paul Revere Life Insurance Company. The case alleged that Unum wrongfully denied claims made by a Greene LLP client under two income insurance policies purchased in the 1980s. The settlement amount of $700,000 resolves all claims by Greene LLP’s client under M.G.L. c.93A and c.176D(3) and for breach of contract related to the income insurance policies.
Greene LLP’s client, a licensed social worker in private practice, was diagnosed with a mental illness several years after purchasing the income insurance policies. As a result, he was unable to maintain his practice, triggering benefits under the two policies. Due to the same mental illness, the Greene LLP client was unable to keep up with UnumProvident and Paul Revere’s onerous requirements to justify benefits.
In 2004, insurance regulators in Massachusetts, Maine and Tennessee, on behalf of themselves and other states and jurisdictions, conducted an investigation into the claim denial practices of Unum, Paul Revere, and Provident Life and Accident Insurance Company. The regulators levied a $15 million fine after they found systematic and widespread “unfair claim settlement practices” by the companies, including failures to evaluate “the totality of the claimant’s medical condition.” The regulators also found “a significant number of instances” in which an inappropriate burden had been placed on claimants to justify eligibility for benefits.
Greene LLP argued that both of these unfair practices played a role in a bad faith denial of its client’s claims for benefits. By improperly shifting a burden to prove eligibility to the insured, Greene LLP attorneys argued, Unum and Paul Revere took advantage of someone who was especially ill-equipped to fight their practices – because of his mental illness, the very reason he suffered a loss of income in the first place. “Unum’s claim denial practices were unreasonable,” said lead attorney Thomas M. Greene. “Individuals like my client should not have to prove their eligibility for benefits by responding to mountains of paperwork, especially if mental illness makes it particularly difficult to do so. That’s bad faith.”