Prudential Faces $1 Billion Lawsuit

Prudential Insurance Co. is the focus of a lawsuit filed by 15 Palm Beach County residents who are aiming to prove the company sold bogus policies. Pretrial motions were scheduled for today, and jury selection has been set for Feb. 1.

The residents filed their own lawsuit after deciding a national class-action suit would not provide sufficient damages, David Sheller, the plaintiffs’ attorney, told the Associated Press.

“It was a lousy settlement,” he was reported as saying. “The average settlement was anywhere from $40 to a few hundred bucks.” Prudential settled the national suit in 1997, paying customers $2.4 billion, or roughly $220 each for the 10.7 million policies it sold between 1982 and 1995.

The Florida plaintiffs are accusing Prudential agents of falsely promising customers that policies would be paid for in a few years when in fact, the contracts required policy holders to pay premiums for life or risk policy lapse. The Associated Press reported that Prudential has denied the charges in court filings.