Insurance Quotes

Get quick and easy insurance quotes

Currently insured?:
Yes No

Illiniois Prudential Settlement Amended

Stories and background:

Editor's Note: This release comes from the Illinois Department of Insurance Web site.

 

Illiniois Prudential Settlement Amended

November 12, 1996 -- SPRINGFIELD, IL -- Illinois Insurance Director Mark Boozell has issued an amended stipulation and consent order to Prudential Insurance Company of America, giving Illinois policyholders the opportunity to share in a proposed federal class-action settlement that enhances an earlier national remediation plan.

Prudential signed a consent agreement with Illinois and various other insurance regulators in July as part of a multi-state restitution program for Prudential policyholders with sales-related complaints. The remediation program set an October 5 deadline for Prudential to mail information on filing claims to clients who purchased over 10.7 million permanent whole life policies between January 1, 1982 and December 31, 1995.

State insurance regulators extended that deadline following a September 24 announcement that the company and plaintiffs' attorneys had reached a tentative settlement in a putative class-action lawsuit pending in U.S. District Court in Newark, NJ. The delay enabled state officials to determine how policyholders could benefit from a single program incorporating the terms of the court settlement with the multi-state remediation program.

Prudential began mailing details of the amended restitution plan, instructions for filing claims, and information on the class-action suit to policyholders on November 4. The actual claims review process will begin no later than February 1, 1997.

The amended plan offers a more liberal claims review process and such restitution options as full premium refunds, continued coverage with no additional premiums due and partial premium refunds. In addition, if the federal settlement is approved, Prudential has agreed to spend a minimum $410 million to settle claims and to pay punitive damages. A hearing on the class-action settlement is scheduled for January 21, 1997.

"Throughout this entire process our chief concern has been to protect the estimated 749,000 Illinois policyholders who may have been financially harmed by Prudential's sale practices," Boozell said. "The amended agreement retains the safeguards outlined in the multi-state restitution plan, while offering enhancements included in the proposed federal class-action settlement. We believe the revised agreement offers Illinoisans the best opportunity for maximum restitution," he said.

"Policyholders who wish to be excluded from the class-action suit must notify the federal court by December 19," Boozell said. "Those consumers preserve the right to file their own lawsuits, but cannot share in the class-action settlement.

"Policyholders who wish to participate are not required to take any action at present. If the court approves the class-action settlement, they will receive a second mailing with another claim form and instructions for filing claims."

Illinois policyholders are encouraged to carefully read all information they receive. Questions are being referred to 1-800-736-8913, a toll-free number staffed by an independent entity hired by Prudential and monitored by state regulators and attorneys for the class-action plaintiffs.

Ready to get a quote?

Get quick and easy insurance quotes

Insure.com Redesign Survey