A Boston jury has found that Unum, the country’s largest disability provider, violated the federal False Claims Act by making a policyholder file with the Social Security Administration for disability benefits before Unum would pay insurance benefits to a disabled policy holder. Unum is based in Chattanooga, Tennessee.

The jury looked at seven insurance claims, and ruled in the plaintiff’s favor on two of the claims. The whistleblower in the case was Patrick Loughren, a Pittsburgh attorney who argued that Unum violated the False Claims Act by forcing its insureds to apply for Social Security in exchange for receiving private disability benefits for which the people had already paid for by way of insurance premiums.

This was not the first claims litigation against Unum. In 2003, the Georgia Insurance Commissioner fined Unum (then named UnumProvident Corp.) $1 million and put the provider on two years’ probation for its practices in handling claims. In 2002 and 2003, Unum lost two multimillion-dollar judgments in California, both involving the wrongful denial of disability benefits.

Unum says the Boston case is unrelated to its recent past problems.

For the full story, go to Chattanooga Times Free Press.