UNUMProvident announced Thursday that it is exiting the independent LTC distribution business effective this Fall per press release 5/30/03.

By extension, all independent sub-GA and broker contracts will also be canceled by UNUMProvident. To continue writing individual LTC insurance with UNUMProvident, brokers will have to individually re-contract with UNUMProvident directly.

This change is part of an overall strategy shift to place more emphasis on multi-life sales, and the changes will apply to individual disability insurance as well as individual LTC.

Effective September 1st, 2003, all individual, non-multi-life quotes and sales support (LTC &DI) will be done through an 800-number with the home office in Chattanooga. There will be NO sales support for single-life/couples sales at the UNUMProvident field offices either after 9/1.

Multi-life sales of the individual product lines (5+ employees for LTC or 3+ employees for DI) will be supported by the UNUMProvident field offices after 9/1. (True group products will continue to be supported by the field offices as they are currently.)

Press Release>>>

UnumProvident Announces Enhancements to its Individual Income Protection and Long-term Care Distribution Strategy

Chattanooga, Tenn. – May 30, 2003 – UnumProvident Corporation (NYSE: UNM) introduced today a more effective, efficient distribution model for the sale of its industry-leading Individual Income Protection (“IIP”) and Individual Long-term Care (“ILTC”) insurance products. The changes reflect the Company's increasing focus on corporate customers while cost-effectively maintaining its individual product leadership.

For sales of single policies, the Company will now provide producers with direct access to a dedicated home office unit. This streamlined connection to the Company’s Sales Support Center will provide producers with faster response for quotes, and sales support from a highly trained, centralized staff. Previously, sales of most single policies were handled through the Company’s field sales organization.

For cases involving multiple individual policies sold together, or “multi-life” business, which in the first quarter accounted for 73% of IIP business written by the Company, UnumProvident will maintain its focus on integrated sales through the worksite by continuing to provide highly focused field support.

The specialization in support based on the type of case being written will provide producers with the best of both approaches – direct access and localized support – as they respond to the trend of significantly increasing multi-life sales, and declining single policy sales. These changes will be phased in over the next three months.

“We’ve had tremendous response from producers on the effectiveness of direct access for individual policy sales,” said Thomas R. Watjen, president and chief executive officer. “We believe the blending of local and home office support, depending on the type of business being sold, gives our sales partners the best of both worlds.”

This streamlined distribution model also includes a planned transition away from a few specialized managing general agency agreements, allowing the Company to focus more resources on its primary field brokerage distribution network. The refined structure is expected to reduce costs and better align resources to take advantage of current business trends, focusing on worksite customers and increased integration between individual and group offerings. Approximately 50 positions in several locations are expected to be impacted over time, though management expects that many of these individuals will be offered other opportunities within the Company. The Company also expects some initial transition impact in new sales in some product lines, but no material impact to earnings in 2003. The realignment is expected to produce increased business levels over time under the new model.

“This enhancement to our distribution strategy reflects our continuing focus on the needs of the corporate customer while maintaining our individual product leadership in a cost-effective way,” said Watjen. “The vast majority of our individual products are sold in a corporate environment today, and the changes we are announcing are consistent with our objective of supporting the evolving needs of our customers and producers well.”

The subsidiaries of UnumProvident Corporation offer a comprehensive, integrated portfolio of products and services backed by industry-leading return-to-work resources and disability expertise. UnumProvident is the world leader in protecting income and lifestyles through its comprehensive offering of group, individual, and voluntary benefits products and services. UnumProvident's primary operations are in the United States, Canada and the U.K.

A “safe harbor” is provided for “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Statements in this press release, which are not historical facts, are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. These risks and uncertainties include such general matters as general economic or business conditions; events or consequences relating to terrorism and acts of war; competitive factors, including pricing pressures; legislative, regulatory, or tax changes; and the interest rate environment. More specifically, they include fluctuations in insurance reserve liabilities, projected new sales and renewals, persistency rates, incidence and recovery rates, pricing and underwriting projections and experience, retained risks in reinsurance operations, availability and cost of reinsurance, level and results of litigation, rating agency actions, regulatory actions, and negative media attention, the level of pension benefit costs and funding, investment results, including credit deterioration of investments, and effectiveness of product and customer support. For further information of risks and uncertainties that could affect actual results, see the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” in the Company’s Form 10-K for the fiscal year ended December 31, 2002 and subsequently filed Form 10-Qs. The forward-looking statements are being made as of the date of this press release and the Company expressly disclaims any obligation to update any forward-looking statement contained herein.