UnumProvident Corp., the largest U.S. disability insurer, must defend itself against a suit accusing the company of systematically denying claims for long-term disability insurance by people too sick or injured to work, a U.S. district judge in New York said.
The Chattanooga, Tenn.-based company is accused in the class-action suit of violating its duty under federal insurance laws by paying bonuses to its workers based on the number of claims they deny. UnumProvident did not comment.
The suit seeks an order forcing UnumProvident to review claims it denied and to change its practices. It doesn’t seek damages.
The case was filed on behalf of people whose policies were underwritten by UnumProvident units or whose disability plans are administered by the company.