Deny, Delay and Defend…
A Common Practice Amongst Some Big Names in the Insurance Industry.

If you thought you were “in good hands” with Allstate, you may be unhappy to know that thousands lf legal documents and financial filings show otherwise for many of Allstate’s policyholders. “While Allstate publicly touts its ‘good hands’ approach, it has instead privately instructed its agents to employ a ‘boxing gloves’ strategy against its policyholders,” said AJJ CEO Jon Harber. “Allstate ducks, bobs and weaves to avoid paying claims to increase its profits.” 

The American Association for Justice (AJJ) unveiled its findings from its comprehensive investigation of insurance companies which included not only the SEC and the FBI, but financial information and testimony from former insurance agents and adjusters, National news media reports and consumer complaints filed with state insurance agencies. With a range of insurance fields from homeowners and auto insurers to health, life and disability, the AJJ’s findings were not only unsettling, but also provided insight into what is fast becoming a common trend amongst insurance companies. This trend: some of the biggest names in the American insurance agency are quick to cut corners, refuse to pay claims and choose their company’s greed over the benefit of their policyholders. Aptly titled “The Ten Worst Insurance Companies In America”, the report reveals the top 10 offending companies.

1. Allstate - With a well-articulated company mission stated by it’s CEO, Thomas Wilson, “our obligation is to earn a return for our shareholdes,” it’s easy to see why Allstate is at the top of this list. By adopting the “three D’s” policy: deny, delay and defend, Allstate has maintained a stable bottom line while blatantly doing nothing in the best interest of their policyholders, thus clinching the top slot in this list of worst offenders. 

2. Unum - As one of the nation’s leading disability insurers, Unum sunk low enough to deny claims of a woman who used to sell Unum policies after being diagnosed with MS herself. When the chain of command dictates denying claims in order to meet cost-saving goals and the CEO is forced out while still collecting $17 million in severance and pension, something is clearly wrong. In a 2005 settlement with insurance commissioners from 48 states over their claim-handling practices, Unum agreed to reopen more than 200,000 cases and pay $15 million. In 2007, the company confessed to have only reviewed 10% of the cases eligible for reopening based on the 2005 settlement.

3. AIG - Being called “The Next Enron” can’t be good for any company, but having a strong reputation for turning a profit by taking in more money in premiums than it pays out in claims, puts AIG near the top of this list. How about doling out $68 million to it’s ex-CEO and having to pay a multi-million dollar settlement after investigations find they, along with other brokers, have faked bids to create an illusion of a competitive market. The big word for this company: FRAUD.

4. State Farm -  After Hurricane Katrina, one of the worst natural disasters in U.S. history, State Farm claimed to have resolved 99% of Katrina’s claims. Regulators begged to differ once the Louisiana Department of Insurance reported that 9,000 of State Farm’s insured were seeking help disputing their claims with the company. Litigation in Jackson Mississippi also uncovered State Farm asking the CEO of one of its engineering firms to alter reports whenever the company didn’t agree with their findings. After also hiring McKinsey & Company, the consulting firm who helped Allstate, State Farm’s company profits have more than doubled from its 1990s level to $5.4 billion in 2007.

5. Conesco - Provider of long-term care policies make it possible for the elderly to afford assisted living or a nursing home environment, should they lose their ability to care for themselves. Conesco’s protocol has been to delay judgment on claims until people either “died or gave up.” A settlement was reached in 29 states and the District of Columbia for its repeated abuses of insurance law in the long-term care business. Conesco was responsible for paying several million dollars I fines and restitutions to clients were finally awarded. The company also faces $10 million in fines if its services aren’t improvied.

6. WellPont - Known to routinely cancel the policies of pregnant women and chronically ill patients, WellPoint has a long-running history of putting its bottom line over the welfare of its policyholders and their health care providers. In 2004, Anthem and Thousand Oaks merged with WellPoint to the tune of $20.8, creating the nation’s largest health insurance provider, covering roughly 28 million. This merger would raise premiums and reduce payment on claims in order to fund the astronomical severance packages to executives behind the deal. During a California investigation, more than 1,200 violations unsurfaced, including improper recessions, failure to pay claims in a timely manner, failure to provide required information when denying a claim, failure to pay interest on claims where required and mishandling of member appeals. Even after fines were imposed upon Anthem, no claims-handling practices were changed.

7. Farmers - This Swiss-owned company has been known to victimize both its individually insured as well as the U.S. businesses they covered and ranks near the bottom of homeowner satisfaction surveys. Farmers tricked businesses into believing they were receiving the best deals available in an anti-competitive smoke screen to inflate premiums and pay illegal commissions to those who brokered the deal. Internal company documentation and testimony from former employees reveal Farmer’s practices to continuously place profits over policyholders. The company even boasted an incentive program offering pizza parties to adjusters who reached low payment goals.

8. UnitedHealth - When the former CEO, William McGuire, pocketed $800 million in stock options and $530 in compensation, the company’s policyholders suffered. Not only did UnitedHealth deny treatments to patients in order to feed McGuire’s account, they also used AARP’s large profile to receive $4.5 billion in premiums  from AARP-branded products in 2004, only to have AARP gain $197 million in royalties and $23 million in investments that year. Meanwhile, across the country, regulators and physicians have taken a stance against UnitedHealth by either refusing to accept UnitedHealth coverage, forcing patients to pay up front for procedures, or refusing to enroll new members due to the company’s reimbursement rates being so low.

9. Torchmark -  When a company is forced to admit it was founded as a scam, something is incredibly wrong. Former CEO, Frank Samford, when founded in 1900, the purpose of the company was to funnel money to its founders. Offering low cost burial insurance, cancer insurance, life insurance and the like, Torch mark has preyed on low-income Southerners for over a century. Its practices include race-based underwriting, refusing insurance to non-English speakers and deliberately overcharging premiums. In the 1980’s, Torchmark sold policies with the promises of lifetime benefits, but later changed those policies without telling their customers. Although guaranteed for life in the eyes of their policyholders, agents would also convince policyholders that their current coverage would be discontinued at age 65, in order to offer new policies that were not worth as much.

10. Liberty Mutual -  Much like Allstate and State Farm, Liberty Mutual also brought in McKinsey & Company who once again encouraged the deny, delay and defend tactics in order for Liberty Mutual to expand their bottom line. Liberty Mutual, however continues to lead the way in complaint rankings as well as in short-changing victims. Also known for dumping policyholders across the country, not only in hurricane susceptible states, but also in northern states as well. Despite living 12 miles from the coast, one policyholder was “nonrenewed” even though they had only been touched by rampaging waters only waters, and that was when the upstairs bathroom overflowed.

Contact our office to arrange for a free consultation with an experienced Insurance Bad Faith Attorney about your claim. If you win a lawsuit for insurance bad faith you may be entitled to damages in addition to the benefits promised in your policy.

The lawyers at Kiel & Trueax, LLC represent clients in regard to bad faith insurance practices, including: