Prudential agrees to pay denied life insurance claims in settlement with US Labor Department [The Hour, Norwalk, Conn.]
Apr. 19—In a settlement with the
DOL's
Prudential agreed to honor the "face value" of those denied policies, which DOL estimated were between
"Today, we are announcing the beginning of the end of a troubling, deeply flawed practice that the American life insurance industry has engaged in for decades," Nanda said during a Wednesday news conference. "Essentially, in many instances, participants were paying premiums for life insurance policies that never existed."
Prudential has its headquarters in
Under the settlement, Prudential is prohibited from denying a beneficiary's claim based on the lack of evidence of insurability when premiums were collected for more than three months.
Additional protections are kicking in to ensure coverage is not denied based on insurability more than a year after a policyholder starts paying premiums; or based on evidence that they were no longer insurable after they first began making premium payments.
In response to a CT Insider query, a Prudential spokesperson forwarded a corporate statement addressing the settlement.
"Constructive engagement with our regulators is an important component of doing business the right way, which is foundational to our approach to delivering for our customers, while fulfilling our regulatory obligations," the Prudential statement read. "We are addressing this with supplemental group life insurance customers that are impacted and providing clear guidance to our customers regarding the responsibilities for maintaining evidence of insurability."
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