UnumProvident: Response to Recent Media Coverage
11/18/2002
from: J. Harold Chandler
Chairman, President and Chief Executive Officer, UnumProvident
hchandlerceo@unumprovident.com
As we expected, 60 Minutes aired a highly biased and unrepresentative segment on our company on Sunday, November 17. We had met with the producers of this program several times in an attempt to make them fully aware of the facts. They chose, instead, to take most of their information from a small group of plaintiff's attorneys who are highly motivated by their own financial interests. While unfortunate, it is helpful to understand who the real sources for their broadcast were and why the facts were mischaracterized. In the broadcast there were four main points to which I want to respond: - We do not set targets to close valid claims. Any business involves pressure to perform, and ours is no exception. However, to suggest that the natural stresses of our business involve pressure of any kind to close legitimate claims is absolutely false. We do make claim projections, the same as we make projections for other areas of our business such as sales, underwriting, or investments. Such projections are necessary to manage a business and to provide quarterly reporting to the financial markets. But to represent these as "targets" or "quotas" for closing valid claims is simply wrong.
- A minute percentage of our claims ever involve litigation. Of those that resulted in a judgment by a court last year, our company won three out of four times. Our results when cases go to litigation further validate the inherent fairness of our claim process. The program referenced 3,000 lawsuits over a period of five years. That figure compares to approximately 2,000,000 disability claims managed during the same period. Our judicial system, while the finest in the world, is far from perfect. The two cases referenced in the broadcast are not representative of our company's record in litigation. One is still being appealed in California, and we have strong grounds for our appeal. Five different doctors, including the original treating physician, said there was no objective medical evidence to support disability.
In the case of John Tedesco, the eye surgeon on the program, 60 Minutes chose not to share the full facts of this complex case with viewers. Originally, Dr. Tedesco injured his back lifting a golf cart, from which he subsequently recovered and chose to close his practice. The company never denied a claim based on Parkinson's disease, a fact known by 60 Minutes. The first notice of Parkinson's was not sent directly to our company and was not made fully available until after Tedesco's lawsuit had been filed. Once we received the definitive diagnosis of Parkinson's, we paid the claim -- a fact known by 60 Minutes. Dr. Tedesco and his attorney chose to litigate rather than fully cooperate in providing appropriate information, which is unfortunate. Ultimately, as the program referenced, we settled with Dr. Tedesco. To select only this case, with all of its complexities, falsely characterizes our claims process. - John Garamendi, who appeared on the program, has not yet assumed office as the Insurance Commissioner of California. It is interesting that the program's producers chose Mr. Garamendi to comment on the company's claim practices, since he is not yet in office. However, he has a history of valuing what is best for consumers. We believe that when he assumes office and has access to the full facts of our company, he, too, will value the thorough, objective means we use to manage claims on behalf of policyholders.
- The former employees had various job performance and other problems while employed at our company. We know that the overwhelming majority of employees, including the others in the units these individuals worked in, have a very different view of our company and of our service to customers. These former employees are simply not representative of the 13,000 professionals of our company.
Finally, I would ask you to remember the facts. These were not refuted by the program, even after they had done extensive investigation into each: - We will pay $3.6 billion in disability-related benefits this year, an amount that has increased each year for the past decade.
- Only 2% of policyholders who filed a claim with our company last year were found not to be disabled, an amount consistent with prior experience.
Nearly one out of every four companies in America, including CBS, has entrusted UnumProvident to provide disability income protection insurance for its employees. Fortunately, our market share has increased further in 2002. We are successful because we listen to our customers and their advisors. Thank you for taking the time to learn more about our company. Please don't hesitate to contact us via www.unumprovident.com/commitment or through your local field office for additional information. Kindest regards,
J. Harold Chandler
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