Has Prudential paid the people it cheated? Part II: But where are the checks?!
Fast forward to November 1998. How many people received claim forms but took no action because they didn't understand the process or didn't know they were waiving their rights by doing nothing? Of the 1,103,914 who filled out the lengthy ADR forms, how many scored a 2 or 3 in the rating system? How many of those have been paid, and how much? How many are still being "processed"?
These are hard questions to answer. Robert DeFillippo, vice president of public relations for Prudential, says, "We safely expect to have the entire program completed by the end of next year." That's the end of 1999. And that was spoken through the rose-colored megaphone of public relations. (Back in August 1998, DeFillippo's estimate was the end of this year.) DeFillippo says all but a "handful" of claims have been reviewed, although there are "still cases where we need more information."
But reviewing is not paying. Prudential has "begun sending offer letters out." DeFillippo says it's a "rolling program — some people have already gotten their checks. . . . We're in the beginning of the [payment part] of the process. Toward the end, a lot of checks will start going out."
As of the beginning of November 1998, Jim Fell, supervisor of a temporary Consumer Assistance Bureau for the Florida Insurance Commission, which was set up to aid victims of Prudential, said, "It's my understanding that only about six or seven thousand offers have been sent out so far. We have about 50,000 [in Florida] to go. We have no idea who has gotten their check." The special unit was set up to help cheated policyholders make the best choice of filing alternatives for their situation and get through the process. But the Consumer Assistance Bureau staff was never meant to monitor results. However, Fell does know of one person who received a check, since the person "was in dire straits" and called him to say they had received the money.
Asked how many of the reviewed forms had fallen into the 0, 1, 2, and 3 categories, Prudential's DeFillippo claimed he didn't have that information. A spokesperson for the New Jersey Department of Banking and Insurance (where Prudential is based) claims he also doesn't know who's been paid.
Who's in charge here?
A committee of state insurance regulators and the class counsel is supposed to oversee Prudential's payment process, but there will be no updates of the status of such payments. And someone has acted to see that nobody gets that information for a long time. On Nov. 4, 1998, Judge Alfred M. Wolin of the United States District Court for the District of New Jersey filed Master Docket No. 95-4704 (AMW) MDL No. 1061, ordering that no one can release any information about the scoring of the ADR forms or the disbursement of funds, except to Prudential, the class counsel, and a few others. It's rumored by inside sources that journalists and attorneys in other suits were asking too many questions.
The court further ordered that the parties may release a court-approved summary of scoring and related information "when all or substantially all Decision letters will have been sent to Claimants, which the parties estimate to be prior to the end of the first quarter of 1999."
"It may appear that it's taking a lot of time," said DeFillippo, who says people "shouldn't be concerned, because the process is moving along. If they're concerned, they should not hesitate to contact the 800 number." (The help-line Prudential set up for its victims is 800-736-8913.)
Some people can't afford the wait, and a few were lucky enough to have been able to instigate separate court actions before their rights evaporated. Also able to still litigate are those who held policies of over $1,000,000. And a separate suit brought by two elderly and ill policyholders in California was moved ahead of another for 77 plaintiffs because of the frailty of the victims' health.
The next wave will be penniless
Many Prudential policyholders don't yet know they're victims. Michael Malakoff notes, for example, that some people may be in the fourth year of a "vanishing premium" scam that won't stop charging premiums until the eighth year — so those people won't catch on for four more years. "This settlement has extinguished their claim," says Malakoff. He adds that Prudential should have been required by the court to tell people their policy was not performing the way they were led to believe it would, but the court required no such disclosure. "There are millions who could still be affected. Not to give people those facts, I believe, is fraudulent," charges Malakoff.
The bottom line? The owners of over 9 million policies won't get a penny because they never filled out the paperwork, because their claims couldn't be substantiated, or because they have elected not to purchase the extra coverage offered as recompense.