Prudential on trial again in Florida
Fifteen Palm Beach County, Fla., residents went to court on Jan. 22, 2001, charging Prudential Insurance Co. with fraud and racketeering and seeking $1 billion in damages.
The lawsuit filed in Palm Beach County Circuit Court is comprised of 10 separate lawsuits consolidated into one, and charges Prudential with questionable sales tactics targeted at elderly residents. Those tactics include the "vanishing premium" scheme, in which an agent claims a life insurance policy's cash value will perform so well that the buyer can stop paying premiums within a certain number of years. Prudential agents also are alleged to have sold cash value life insurance policies as investments, avoiding the term "insurance" and selling the policies instead as "personal pension plans."
Prudential considers its sales practices problems "far in the company's past," says spokesperson Laurita Warner. "The Florida cases represent a relatively small number of yet-to-be-resolved claims, and they will be addressed based on their individual facts and circumstances," Warner says.
Pre-trial motions began Jan. 22, and jury selection is expected to commence on Feb. 1, says attorney Patrick Quinlan of West Palm Beach law firm Searcy Denney Scarola Barnhart & Shipley.
The plaintiffs in the case all opted out of the giant class action lawsuit against Prudential that the company settled in 1996 for more than $2 billion nationwide. That case covered all policyholders who bought Prudential policies between 1982 and 1995. Three other, similar cases by policyholders who opted out of the settlement are awaiting trial dates in Broward County, Fla., Dade County, Fla., and in federal court in the Southern District of Florida, according to Quinlan.