ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Friday, February 21, 1997 TAG: 9702210066
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: Associated Press
Three more states have reached deals with Prudential Insurance Co. of America after spurning a class-action settlement over fraudulent sales practices.
Prudential, the nation's largest life insurer, agreed Thursday to pay a total of $19.4 million in fines in settlements with Florida, Texas and Massachusetts.
Those three states were among five that chose to negotiate on their own rather than join a settlement covering the remaining 45 states and the District of Columbia.
California remains the only state yet to reach an agreement with Prudential. Virginia, the other holdout, accepted a $384,200 settlement last week.
The harshest penalty Thursday came in Florida, where Prudential agreed to pay a $15 million fine. The state's insurance commissioner, Bill Nelson, will use some of the money to set up a toll-free telephone number and hire people to assist elderly policyholders fill out forms qualifying them for refunds.
Prudential spokesman Robert DeFillippo said did not know exactly how much the Florida agreement would cost the company in refunds.
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.
Prudential also agreed Thursday to fines of $2.4 million in Massachusetts and $2 million in Texas.
The insurer last year admitted to deceptive sales practices and agreed to a settlement of the class-action that could bring 10.7 million people who bought policies from 1982-95 at least $410 million - and perhaps more than $1 billion.
A spokeswoman for California's insurance commission would not discuss details of the settlement that state is seeking.
LENGTH: Short : 45 linesby CNB