Prudential Insurance Company has reached a settlement with 19 states over its unclaimed property practices, and it is negotiating a similar agreement with other states in which it does business.
Under the agreement, Prudential will revamp its unclaimed property policies, restore the value of impacted accounts or pay the proceeds to beneficiaries.
Unlike an earlier settlement by state authorities with John Hancock, however, Prudential will pay no fines. It has merely agreed to pay the beneficiaries 3% compounded interest on the value of the held amounts from the date of the owner’s death or from Jan. 1, 1995, whichever is later. Prudential will also accelerate turning over unclaimed property to the states, it said in a statement.
The settlement was announced by John Chiang, California controller. He said the settlement could “return up to $20 million to the families of deceased life insurance policyholders in California.” However, based on Chiang’s statement, that would be a steep uphill climb for the results of the probe up to this point.
So far, Chiang said, more than 1,000 Prudential policies have been identified as being held for individuals in California who have been dead for more than 15 years. The average cash value of the policies is about $2,000, Chiang said.
In his statement, Chiang said his office “took the lead” in negotiating the settlement, which 18 other states subsequently joined.
But the Prudential statement, released by Robert DeFillippo, its chief communications officer, said the settlement was attained through a multi-state market conduct exam initiated through the National Associaition of Insurance Commissioners (NAIC).
The Florida, California, Pennsylvania, Illinois and New Jersey Departments of Insurance have been taking the lead in negotiating an agreement with Prudential, DeFillippo stated.
Besides California, other signers of this agreement are Colorado, District of Columbia, Idaho, Louisiana, Maine, Maryland, Massachusetts, Mississippi, Montana, Nebraska, North Dakota, Oregon, Pennsylvania, South Dakota, Tennessee, Utah, Vermont, Washington and Wisconsin.