UnumProvident fires chief executive

NASHVILLE, Tenn. – UnumProvident Corp. said Monday it was firing Harold Chandler as chairman, chief executive and president Monday as part of an effort to restore confidence in the disability insurer which recently restated three years of earnings.

“By this action, the board is reaffirming its commitment to further strengthen the company’s financial position, improve the consistency of its performance, and restore investor confidence,” the company said in a statement.

Shares of the Chattanooga-based company rose 25 to close at $9.80 on the New York Stock Exchange. UnumProvident, which claims about 30 percent of the nation’s disability insurance business, has about 3,500 employees in Portland, Maine, and about 3,000 in Chattanooga among 13,000 overall.

Chandler’s firing comes a week after UnumProvident said it would reduce earnings by $29.1 million for 2000, 2001 and 2002 to resolve concerns of the Securities and Exchange Commission related to its investment disclosures.

But the company continues to face hundreds of lawsuits from policyholders who charge their claims were routinely denied, and Tennessee is investigating the company’s claims handling.

San Francisco attorney Ray Bourhis, who has won judgments against UnumProvident, thinks more changes will be needed.

“To make Harold Chandler into the fall guy and pay him off with a fat check so he doesn’t turn against the company and create problems for people above him, including on the board of directors, isn’t going to accomplish anything,” Bourhis said.

Chandler will receive severance of approximately $8.5 million and pension benefits of approximately $8.5 million.

The company said these charges are expected to reduce its first-quarter net income by approximately $9.8 million, or 4 cents per share.

Chandler could not be reached for comment Monday. A personal telephone number could not be found, and company communications officials said they could not provide a number for him.