What Happened To All Of Unum’s Contracts And Policies And Know How?

Missing documentsSomeone posted a comment asking me to write about what happened to Unum’s policies and contracts at the time of the June 1999 merger with the Provident Companies. It’s quite an interesting story and I’m happy to write about it. Thank you for asking the question and giving me the opportunity to write another post.

Prior to the merger, Unum Life Insurance Company maintained a “policy room” where all of the original policies and Plans were stored in library fashion. Claims specialists requested the various policies on an as needed basis and they were delivered to those who needed them.

At that time, all of Unum’s documents were still maintained in paper format, and after the policy or Plan was referred to, it was promptly returned to the “policy room.” There was never a problem in examining original policy information and as far as I know, the “policy room” system worked very well.

At the same time, policy and Plan information was also uploaded to an already antiquated system called Merlin. The pay system for IDI policies called PACE also contained detailed information about Unum’s policies and Plans, but it was an older system that often broke down when overloaded.

Most of Unum’s “dead files” and  records were transferred to microfiche and sent to warehouses at the Data Center in Columbia, SC. Once these records hit the Data Center, it was difficult to locate anything, although the microfiche could be requested and obtained.

After the merger, Tim Arnold, the new Vice President of claims came to the Portland Maine facility and had two really awful pet peeves. One, was that it appeared to him, after watching at the HOIII windows in the morning, that employee cars arriving in the parking lot late were always the first to leave in the afternoon; and secondly, that the company used way too much paper. Arnold’s pet peeve about paper began a long, disorganized transition from paper to electronic files.

One of the first decrees Arnold made was that the “policy room” was to be done away with. Although it’s unclear where the policies went, it is a pretty assumption that they were either sent to Account Managers (sales people), or alas, they were sent to the Columbia Data Center – the point being, no one knew where they were making it necessary to use the old outdated Merlin to verify policy information. It was a real mess! I always wondered why Underwriting never maintained copies of all policies and Plans, but they didn’t seem to be able to locate policies either.

The company’s diary system was changed from Genesis to Navilink and paper files were done away with as files were electronically uploaded to the new systems. I can’t tell you what a disorganized, chaotic company UnumProvident was at that time. Since 70% of the claims handlers left the company (realizing they had been had regarding the stock option awards and the 1999 People Goals) there were not enough claims handling staff to “do business.” (At the same time Unum lacked personnel, management was pushing employees over 50 and female to “voluntarily retire”, hoping to remove the most knowledgeable claims personnel out of the company peaceably.)

Realizing the company had a serious backlog of untouched claims, Tim Arnold eliminated separate product line reviews (STD, LTD, Accident, Life Waiver of Premium) and created impairment based review departments forcing claims specialists to manage all types of claims even when they had not been trained on the different products. Each claims handler had to then process all products STD, LTD LWOP etc. when they didn’t know anything about it.

So, let’s recap. Arnold does away with the “policy room” and policies are not to be found while trying to process claims; paper files are eliminated and new electronic systems are in the process of uploading all files creating mega databases. Seventy percent of claim staff left the company, or were pushed out because they were tenured, female and over 50. (Women who wouldn’t voluntarily retire were eventually pushed out for poor performance.)

Arnold also sent out company wide emails informing claims handlers not to consider any medical opinions except those rendered by Unum’s medical staff.  The new UnumProvident bad faith eventually resulted in the 60 Minute and NBC Dateline TV broadcasts and the rest is history.

By 2000 the multi-state conduct market regulators were chasing Unum for its Benefits Claims Manual. When asked by Plaintiff’s attorneys about the Manual, I had to admit: “Unum didn’t have one. But, management sure put together one in a real hurry.” Although Unum submitted several training notebooks as claims manuals, the truth was, Unum never had a claims manual until forced to hurriedly put one together when called on the carpet.

Tim Arnold’s pet peeves eventually materialized into a 40 hour workweek rather than 37.5, although he still stood by the windows to watch who came in late and who left early. I never had a beef with Tim Arnold. I presented at roundtables with him and found him to be very fair in making claims decisions as compared to Mary Fuller who frequently yelled, “Why are we paying this claim, deny it!” Tim Arnold at least gave claims a fair chance.

Finally, Arnold got really stingy about buying paper to the point that there was almost a  secret police reporting to Arnold as to who overused the company’s paper.

Unfortunately, over two decades later Unum is still having difficulty locating original policies. Most policies today are stamped “Duplicate” making me wonder what DID happen to the originals, and if they were sent to the Columbia, SC warehouse and got lost. I can’t imagine UnumProvident footing the bill to have all of the policies copied, but I CAN imagine them getting lost or just pitched out.

Today, I observe that Unum’s claims handlers aren’t reading the files. It seems as though the claims people are only reading the last several months of documents. Why aren’t they reading the files? Do claims handlers even have access to file copies? Where is all of the old file information? Regulators should start doing some Unum research to find out were the policy copies and file information really is.

In my opinion, Unum Life never survived demutualization in the mid 1980’s.

From time to time, someone will ask me about Unum’s history and past, and I’m happy to share the information. Looking back, some of Unum’s history would be pretty interesting  (and funny) were it not for the fact that so many insureds were hurt by bad faith and illegitimate claim denials.

Unum might be a long way from selling life insurance to insureds crossing the Rockies during the 1849 gold rush, but unfortunately the company never walked the talk on fair and objective claim review.

Now if they could only find all those missing policies…?