Insurance Quotes

Get quick and easy insurance quotes

Currently insured?:
Yes No

Michigan Enters into Second Agreement with Prudential

Editor's Note: This release comes from the Michigan Insurance Bureau's Web site.

Michigan Enters into Second Agreement with Prudential

November 8, 1996, LANSING -- Michigan Insurance Commissioner D. Joseph Olson today joined other state insurance regulators in entering into a second agreement with The Prudential Insurance Company of America to implement a restitution program to address past improper sales practices. Under the latest agreement, Prudential policyholders who purchased permanent life insurance policies between January 1, 1982 and December 31, 1995 will have an opportunity to submit sales-related complaints for review through a program that will begin by February 1, 1997.

Commissioner Olson and other state regulators originally entered into consent agreements with Prudential in July. However, on September 24, the company entered into a separate agreement as a proposed settlement of a class action lawsuit filed by attorneys representing a group of Prudential customers. The proposed settlement was based upon the original agreement with state regulators, with additional enhancements.

The new restitution program agreed to today by Commissioner Olson would give all Michigan policyholders the same benefits outlined in the proposed federal class action settlement. That settlement must still be approved by the U.S. District Court in Newark, New Jersey. A hearing for that purpose has been scheduled for January 21, 1997. The delay to policyholders in receiving the benefits agreed to last July caused by revising the agreement with Prudential to incorporate the enhancements will be offset by an estimated 10 to 15% increase in benefits as a result of the new negotiations, Commissioner Olson noted.

The proposed class action settlement provides additional relief and procedural safeguards to customers, some of which the company has agreed to implement when the restitution program begins on February 1, regardless of whether the class action settlement has been approved by the Court. Certain financial guarantees and minimum payment obligations are key additional features of the settlement which will be implemented at the end of the restitution program only if the settlement is approved by the court and any appeals to the settlement are exhausted.

Under the restitution program, customer complaints will be reviewed on an individual basis. Depending on the nature of the complaint and the evidence to support the complaint, customers could be eligible for full or partial refunds of premiums plus interest, continued coverage with no additional premiums due, or other relief.

Informational packets will be sent out by Prudential in the very near future explaining consumers' options under the proposed class action settlement. Those who exclude themselves from the class action can still bring a lawsuit against Prudential, but would be ineligible for relief provided under the proposed settlement. Consumers who remain in the class are barred from bringing their own lawsuits separately against the company but will be eligible for relief under the class action settlement.

Those who may have claims against Prudential do not need to take any action now to receive relief under the proposed settlement. The mailing from the company will include a claim form and instructions for filing a complaint. Consumers who wish to opt out and be excluded from participating in the class-action settlement or object to it are required to file with the federal court by December 19. Details on how to opt out, and the ramifications of doing so, are also included in the informational packets.

Individuals with questions may call 1-800-736-8913, which is staffed by members of an independent entity hired by Prudential and monitored by both state regulators and attorneys for the class action plaintiffs.

Ready to get a quote?

Get quick and easy insurance quotes

Insure.com Redesign Survey