I’ve been hearing quite a bit about Unum and “Reservation of Rights” lately. It doesn’t surprise me that Unum would suddenly resurrect the “old ROR dog” it used on a regular basis since we are about 5 weeks to 1st Qtr. profitability reporting. There are quite a few excellent articles already on the blog about ROR, and I recommend that you Search from the Home Page and read up if you’re interested.
Reservation of Rights is basically a well-known financial scheme Unum uses to reduce financial reserves around profitability reporting periods so that greater profits can be reported. Although after the Multi-State Settlement Unum never admitted that the recording of “ROR Status” from their BAS benefit reporting systems automatically reduced financial reserves, the timing of sending out ROR letters to insureds tells it all.
<p class="just"In general, Unum usually concocts a reason why they refuse to accept future liability for the claim, and then the ROR status is updated on their payment system. Reducing financial reserve immediately contributes to Unum's profit coffers. Again, Unum profusely denies connecting ROR to financial reserve deductions, but then places many claims on ROR status in and around financial reporting periods. Why?
So what does this mean for insureds? ROR status should inform insureds that Unum alleges to not have enough information to accept liability for your claim. According to Unum’s own Benefit Manual, ROR status should not remain on the claim long-term, however, Unum permits the status to go on for quite some time since taking it off decreases Unum’s profitability figures. Managers have to time its removal so as not to affect profitability all that much.
In the past, Unum put claims on ROR status for almost any reason. And, having been called out for its deliberate dishonesty, ceased coding the status for a few years. I see that it’s back, however, which again doesn’t surprise me. Unum is trying very hard to make up for COVID losses. It’s usually about this same time that Unum may also begin recording “presumptive SSDI awards” to also take advantage of yet another increase to profitability.
Therefore, ROR status doesn’t have any financial impact on the insured’s benefit, but instead “sets up” a financial way for Unum to profit from a claim for little to no reason. As indicated, if you want to know more details please do a Search from my Home Page to find other Reservation of Rights articles.
