A new bad faith insurance lawsuit filed against long-term disability benefits insurance provider Unum Insurance Company alleges wrongful denial of a former Oregon Telco Credit Union worker’s long-term disability claim.

Plaintiff John H. filed for long-term disability benefits under his Unum insurance policy after being involved in an accident and becoming totally disabled in 1997. According to allegations in the Unum lawsuit, Unum paid John H. $62,500 in October 2001 in accordance to his disability benefits under his plan.

The plan also included an inflation adjustment benefit for primary members at the increased rate of 5 percent after coverage has been in effect for two consecutive years.

In March 2014, John requested payment on this inflation policy provision but Unum denied his request. According to the terms of the plan document, John should have been paid an additional $3,125 pursuant to the inflation coverage increase.

The Unum lawsuit further alleges that Unum had a duty as the disability insurance policy administrator to properly pay benefits and honestly communicate disability insurance coverage to the plaintiff.

John is seeking to recoup all unpaid disability benefits, pre-judgment interest, an award of surcharge, and attorney’s fees for Unum’s alleged intentional misrepresentation of the provision of his policy in order to prevent him from receiving disability benefits due under the policy.

History of Unum Bad Faith Insurance Practices

Unum allegedly denied or terminated thousands of legitimate disability claims dating back to the 1990s. Unum’s bad faith insurance practices occurred to such an extent that the Department of Labor launched an investigation into Unum insurance claim denials.

The investigation included Unum’s subsidiary companies, which at the time were Unum Life Insurance Company, Paul Revere Life Insurance Company, and Provident Life and Accident Insurance Company.

The Department of Labor found the company to be “unfair and unjust” by deliberately resorting to fraudulent tactics of insurance claim denial in order to contain costs.

Under court order, Unum was directed to reopen more than 200,000 denied insurance claims, and to reevaluate the claims based on their merit. To ensure fair and just review and handling of all further policyholders’ claims, Unum was charged with overhauling the methods by which they evaluate and process claims. Unum was also ordered to pay a fine of $15 million to several states.

Unum Lawsuits

Even after such actions, Unum allegedly continues to engage in bad faith insurance practices. The American Association for Justice listed Unum as one of the “Ten Worst Insurance Companies in America.”

Although the Department of Labor in 2005 stepped in and mandated that Unum resolve its bad faith practices, many Unum policyholders have since experienced losses as a result of Unum’s bad faith insurance practices.

If you feel that you have been the victim of a bad faith insurance practice by Unum or one of its subsidiaries, contact a Unum lawyer to discuss your concerns. You may be eligible for financial compensation and other legal options.

The Unum Bad Faith Insurance Lawsuit is Case No. 3:15-cv-00505 in the U.S. District Court for the District of Oregon, Portland Division.