PRUDENTIAL, STATE SETTLE FRAUD LAWSUIT : INSURER TO PAY $15.4 MILLION OVER SALES TACTICS.Byline: Kathleen Holder Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. Prudential Insurance Co. of America agreed Friday to pay $15.4 million to California, the last state to settle with the insurer over fraudulent sales practices. California Insurance Commissioner California Insurance Commissioner is an elected executive office position in California who is in charge of the California Department of Insurance. The current Insurance Commissioner is Steve Poizner. Chuck Quackenbush Charles "Chuck" Quackenbush (born 1954) is a Florida law enforcement officer and former California politician. He served as Insurance Commissioner of California from 1995–2000 and as a California State Assemblyman representing the 22nd District, from 1986–1994. said the deal provided far better compensation than a class-action settlement the state had spurned spurn v. spurned, spurn·ing, spurns v.tr. 1. To reject disdainfully or contemptuously; scorn. See Synonyms at refuse1. 2. To kick at or tread on disdainfully. v. . The agreement - California's largest with an insurance company - comes one day after Florida, Texas and Massachusetts reached settlements with Prudential totaling $19.4 million. Florida's alone was $15 million. Virginia last week accepted $384,200. The four states and California chose to negotiate on their own rather than join a settlement covering the remaining 45 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . In January, Quackenbush threatened to bar Prudential from conducting business in the state if it failed to provide fair compensation to 750,000 policyholders in California. California is Prudential's second-largest market after its home state of New Jersey. Prudential Chairman Arthur Ryan said in a statement the agreement resolved ``the issues of improper sales practices in California'' and would provide ``enhanced remedies for customers who were misled mis·led v. Past tense and past participle of mislead. .'' At issue were claims that Prudential agents defrauded policyholders, many of them elderly, by persuading them to use the built-up cash value of older life insurance policies to finance more expensive ones. The tactic stripped value from the old policies and drained customer savings. The insurer last year admitted to deceptive de·cep·tive adj. Deceptive or tending to deceive. de·cep  tive·ness n. sales practices and
agreed to a settlement of the class action that could bring at least
$410 million - and perhaps more than $1 billion - to the 10.7 million
people who bought policies from 1982 to 1995.
California's settlement includes a $5.5 million fine, $1.4 million for the state's legal costs and $3 million for consumer protection programs. |
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