Associated Press, JANUARY 22, 2001
In a $1 billion lawsuit, 15 Palm Beach County residents are aiming to prove that Prudential Insurance sold bogus policies.
Hearing on pretrial motions would be conducted before County Circuit Judge Peter Blanc, and jury selection has been set for Feb. 1. The trial is expected to last at least 10 weeks.
The residents decided to file their own lawsuit after deciding a national class- action suit would not provide sufficient damages, said David Sheller, the plaintiffs’ attorney. ”It was a lousy settlement,” he said. ”The average settlement was anywhere from $40 to a few hundred bucks.”
Prudential settled the national suit in 1997, agreeing to pay customers $2.4 billion, roughly $220 for each of the 10.7 million policies it sold from 1982 through 1995.
Attorneys for the 15 plaintiffs said Prudential agents, among other questionable tactics, falsely promised customers that policies would be paid for in a few years.
In reality, contracts required policy holders to pay premiums for life or risk having the policies lapse, the lawsuit claimed.
Prudential Life Insurance Co. of America, based in Newark, N.J., has denied the charges in court filings.
Laurita Warner, a company spokeswoman, said the insurance giant acknowledged it used questionable sales tactics until 1995 but has since made sure that customers know what they are paying for and what the payment plans are.
Prudential agreed to pay Florida a $15 million fine in February 1997 to settle charges that its agents deceived 128,000 customers. (AP Online, January 22, 2001)