CHATTANOOGA, Tenn. (AP) – Despite UnumProvident Corp.’s $15 million fine from a multistate investigation of denied claims and a disappointing first quarter, no shareholders complained Thursday.

One day after shares of the nation’s largest disability insurer traded at $17.27, up more than $3 from before the May 2004 annual meeting, none of the dozens of shareholders even asked a question.

In December, UnumProvident agreed in a settlement of an investigation by regulators in Tennessee, Maine, Massachusetts and more than 40 other states to reconsider about 200,000 claims, make changes in claims handling and pay a $15 million fine.

The settlement provides for a $145 million fine if the company fails to meet terms of the agreement.

Paula Flowers, commissioner of the Tennessee Department of Commerce and Insurance, is “pleased with the progress the company has made in compliance with that agreement,” a department spokeswoman said Thursday.

Thomas Watjen, the company’s president and chief executive officer, told shareholders the company has streamlined its operations and “at no time over the past five years have our interests been as well-aligned as they are today.”

He said the company’s “survival” in 2004 was riding on satisfactorily addressing challenges such as rebuilding financial strength and retaining customers.

“Importantly too, we have put some of our regulatory matters behind us, particularly around claims practices,” Watjen said.

The multistate investigation of UnumProvident started after Georgia’s insurance commissioner, John Oxendine, imposed a $1 million fine on the company and its subsidiaries in 2003, saying there was a mind-set of looking “for every technical legal way to avoid paying a claim.”

Watjen, who described the first quarter earnings as “somewhat of a disappointment,” became chief executive in March 2003. He succeeded Harold Chandler, who was fired after the company was sued by investors and customers disputing denied claims.

Chandler received $20.2 million in severance pay after he sued the company.

The company’s stock price in 2003 dipped below $6 a share, down from $55 a share in 1999.

Watjen’s salary and bonus in 2004 totaled $1.8 million, up 2.3 percent from 2003, according to the Chattanooga-based company’s proxy statement in April. He also received $1.6 million in restricted stock awards.

Board chairman C. William Pollard adjourned the Thursday meeting after getting no response when he offered shareholders an opportunity to ask questions.

Carl Austin, managing senior financial analyst for A.M. Best, said in a telephone interview that UnumProvident in the past year “improved on a capitalization basis and earnings are better.”

“How the multistate settlement plays out, we are months away from seeing the ultimate price tag.” He said the insurer has yet to settle with California on claims handling problems.

Austin said UnumProvident also has some other challenges, including low interest rates.

UnumProvident, organized with the 1999 merger of Provident Cos. of Chattanooga and Unum Corp. of Portland, Maine, has about 12,000 employees and last year paid more than $6 billion in benefits.