A.M. Best noted that while the 50 states, D.C, the New York Attorney General and the Department of Labor participated in the multi-state market implementation review, the comparison will require the agreement of at least two-thirds of the states to ratify it. Some states, including California, have recently conducted separate audits of market implementation, but have not ruled on their results. Jurisdictions that do not allow multi-state comparison may individually impose additional fines or, in addition to this tax, require other costly remedies. The U.S. Department of Labor, which conducted an investigation into UnumProvident`s practices regarding staff allocation plans covered by the Employee Retirement Income Security Act, is also a party to the transaction agreements. The New York Attorney General, who also investigated the companies` debt practices, agreed to the transaction. Businesses will also pay a $15 million, pro-rata fine among participating states, based on the long-term disability income insurance premium in each state as of December 31, 2003. If companies do not meet the conditions of the corrective action plan under the agreements, a substantial fine ($145 million) will be imposed. Three years after the comparisons, unUM had taken over only 10% of its eligible business and was still contesting valid claims. Today, experienced lawyers for long-term disabled people are still winning lawsuits against UNUM and convincing judges that their denials are arbitrary, capricious and contrary to medical science. “The agreements require significant changes in UnumProvident`s claims processes and our agencies will continuously monitor and evaluate companies` compliance with the agreements,” said the Massachusetts Chief Bowler. UnumProvident was the target of a class action filed in 2002 and, according to media reports, nearly 3,000 complaints were filed against it.

Following the announcement of the agreement, A.M. Best Co. stated that there was no rating action to take and that its unumprovident rating outlook remains negative. All 50 states and the District of Columbia will have the opportunity to join identical comparison agreements signed by Maine Insurance Superintendent Alessandro Iuppa, Massachusetts Insurance Commissioner Julianne Bowler, Tennessee Insurance Commissioner Paula Flowers and James Benages, Regional Director of the U.S. Department of Employee Employee Benefits Security Administration. Gregory Serio, Superintendent of Insurance, signed an essentially identical agreement with UnumProvidents in New York.