A class-action lawsuit against Mutual Life Insurance Co. of New York was dismissed Oct. 22, 1997, by a New York state judge.

The dismissal is one of the few recent victories scored by the life insurance industry, which has been rocked by lawsuits over deceptive sales practices. More than 30 suits are pending against major life insurance companies, and about a half-dozen similar suits have been settled in the last two years.

Most of the lawsuits -- including the suit against the company better known as MONY -- have revolved around so-called "vanishing premium" whole-life and universal-life policies. When the policies were sold in the 1980s and early 1990s, policyholders were told policy dividends would eventually pay the premiums. In order for that to happen, however, interest rates needed to remain high.

In the MONY case, Judge Beatrice Shainswit ruled that the vanishing-premium products, while ill-conceived, don't necessarily "equate to fraud, or any other actionable wrongdoing, which can be compensated for in a court of law." She also found that sales documents sufficiently warned potential policyholders that the high returns weren't guaranteed.

Prudential Insurance Co. of America, which settled a class-action lawsuit in March, had originally fought back against claims it had deceived policyholders between 1982 and 1995. All the negative publicity created by that case has resulted in a drop in sales at the nation's largest life insurer. The settlement will cost Prudential at least $410 million, and the price tag could wind up totaling as much as $2 billion.

Melvyn Weiss, the lead attorney in both the MONY and Prudential cases, called Shainswit's ruling "very flawed," and said he would appeal.

Some industry watchers say the MONY ruling could change the way the other lawsuits are judged.