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Disability Insurance Scam By American Insurer

Disability Insurance Scam By American Insurer


Acc Support-Action Group Canterbury Acc Support-Action Group Otago

ACC claimants across the country have been shocked over the weekend to learn of a massive disability insurance scam against legitimate claimants by America's largest Disability Insurer, UnumProvident.

America's largest disability insurance company, UnumProvident has been told to "obey the law" in a stunning rebuke by a Federal District Court Magistrate after being accused in more than 3,000 lawsuits of cheating disabled people out of disability payments by using tactics such as losing and shredding files, employing biased doctors to justify cancellations, spying on people, withholding entitlement information from policy-holders and targeting specific categories of claims for cancellation.

U.S. claimants have already successfully sued UnumProvident and been awarded amounts up to $36 million by juries. U.S. Television programs 60 Minutes and Dateline carried extensive stories last November which shocked the nation after past and present employees confirmed the practices.

The employees also confirmed that there were incentives which could be a cake and ice cream or pizza party to monetary bonuses and salary-scale incentives. UnumProvident also introduced what it called a "hungry vulture" award for high performing staff who dumped claimants.

Newly elected Californian Insurance Commissioner, John Garamendi, who took office in January and is promising a full investigation said; " It appears to me to be a conspiracy to defraud individuals."

UnumProvident says with 25 million customers it is not surprising some cases are disputed but the media has investigated Unum Provident practices and say the number of lawsuits and the personal anguish they catalogue paint a disturbing portrait.

Ray Bourhis, a partner in San Francisco law firm Bourhis & Wolfson, has represented dozens of UnumProvident clients whose compensation was denied or they were dumped. "You shouldn't have to sue to get an insurance company to pay the benefits they owe you," he said.

Dr Patrick McSharry, a former medical director at UnumProvident, sued the company last June alleging it denied claims and asked doctors to justify denials. His lawsuit said he suffered retaliation for writing accident reports contrary to that practice.

McSharry's lawsuit triggered a stampede among lawyers suing UnumProvident for denying or dumping thousands of claims.

Dr William Feist, who resigned as vice president and chief medical officer in 1996 after 14 years with the company testified in a recent successful $7.6 million lawsuit by a female chiropractor who became injured and had her benefits cut off, her car repossessed, evicted from her home and forced to declare bankruptcy and was forced on to welfare because of UnumProvident's practices.

Dr Feist told the Court that the company held weekly "roundtables" to jettison claims. "The whole goal of the roundtable discussions was to do just that, to terminate claims," he said ".....to me that was unethical."

Feist said the company played hardball including unlawful investigations and seeking embarrassing information on clients. "Anything was fair game to try and terminate a claim -- surveillance or financial records, ex-wives, mistresses, whatever, anything was fair game," he said.

Another claimant, an injured court reporter, was recently awarded $1.2 million after suing the company.

ACC Claimant Support Groups say from the media reports they have seen the immensity and the audacity of the U.S. disability insurance fraud and the consequent pain and suffering which has been inflicted on claimants is so staggering as to defy imagination.

ACC claimants are extremely alarmed by the evidence of unlawful disentitlement, fraud and attempts to defraud by UnumProvident which, although a private disability insurer, is America's largest and has similar clout and influence to New Zealand's monopoly ACC.

This insurer's activities, methods, practices, even the language used, parallels that of New Zealand's Accident Compensation Corporation, claimants say.

We all know that ACC uses public documents and press releases with the intention, and is capable, of being used to obtain from the public the $2.2 billion it collects from them every year to provide rehabilitation, not forgetting that ACC proposes to have $5.5 billion of public levies it collects invested in financial markets by 2005.

ACC recently received an updated A+ superior rating from America's largest insurance rating agency A M Best. Following the weekend revelations this rating from an American insurance rating agency has made ACC claimants doubly suspicious.

We all know that the ACC levies and charges are compulsory but would the public continue to willingly pay and have confidence in the scheme if they knew what was going on?

ACC even goes so far as to continually tell the public and also a Parliamentary Select-Committee that claimants, including vulnerable long-term claimants, are being properly rehabilitated when many know that is not the case and, in fact, ACC has gone to extraordinary lengths not to provide rehabilitation entitlements to which claimants are eligible.

It has even adopted the public logo "Prevention - Care - Recovery" clearly intended and capable of being used to further convince the public that the money they pay is being put to all the purposes in the ACC Act.

Unum Provident uses the logo "You will have peace of mind."

ACC claimants say by its torment, degrading and cruel behaviour towards claimants ACC certainly does not meet the criteria in its public logo and it even has an agreement with ACC Minister, Ruth Dyson, to "exit" 1500 claimants this year just because they are long-term when the law provides for a full range of lawful rehabilitation entitlements for every claimant.

This has direct parallels with the American UnumProvident practices ACC Support Groups say.

By using or attempting to use documents as it does, ACC and its case managers have a purpose, prima facie, to obtain a privilege, benefit or pecuniary advantage or valuable consideration for themselves and their organisation.

If ACC's use, or attempts to use, any such document amount to an intent, or is capable of being used, to obtain any privilege, benefit, pecuniary advantage or valuable consideration which is, prima facie, an intent to defraud, the possibility then exists that such alleged activities can be investigated and, if found wanting, prosecuted under Section 229A of the Crimes Act.

Following the U.S. revelations ACC Support Groups are again calling on the Government and all politicians for a full public inquiry into the practices of ACC.

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