CHATTANOOGA, Tenn.—Disability insurer UnumProvident Corp. on Wednesday announced plans to make a series of changes to upgrade its disclosure practices relating to producer compensation.

In November, Chattanooga, Tenn.-based UnumProvident and three other insurers were named in a lawsuit filed by the California Department of Insurance, accusing the companies of participating in a client-steering kickback scheme with benefits broker Universal Life Resources Inc. (BI, Nov. 22, 2004).

As part of its revised policy, UnumProvident will provide customers with a notice outlining its new producer compensation disclosure rules, post the new disclosure rules on its Web site, and set up a Producer Compensation Services toll-free number for customers seeking specific producer compensation information.

In addition, in accordance with proposed model regulation from the National Assn. of Insurance Commissioners, the insurer said it is amending its policy to require written customer approval in cases involving commissions paid to brokers.

The changes are expected to take effect within 60 days, a UnumProvident spokesman said.

President and Chief Executive Officer Thomas R. Watjen in a statement said he anticipates making further changes to the company’s disclosure policy, dependent upon legislation adopted by federal and state governments and industry regulators with regard to transparency about producer compensation.

Mr. Watjen noted that UnumProvident is watching the area of contingent commissions “closely” and “will consider alternative arrangements when there is more clarity on this issue as a component of producer compensation in the future.”