DCBS Media Release
May 23, 1997
50,000 Oregonians face June 1st deadline for settlement
(Salem) It's time for Prudential Insurance Company of America's 50,000 Oregon life insurance policyholders to fish or cut bait. That's because policyholders need to submit an "election form" to the company by June 1, 1997 if they don't want to lose their chance for compensation under a nationwide settlement for financial harm from fraudulent sales practices Prudential used between 1982 and 1995.
Eligible policyholders should have received the election form and a notice from the insurer earlier this year. The notice explains how Prudential will settle policyholder claims for financial damages amounting to at least $410 million nationwide. The election form begins the process of reviewing claims and determining what remediation the company will offer in each case.
"While some Prudential customers may have reviewed the materials and concluded that they did not encounter the kind of widespread sales and marketing abuses described in the settlement, others may not yet even realize that they suffered financial harm," Oregon Insurance Commissioner Kerry Barnett said. "So far, thousands of eligible Oregonians have not returned their forms."
Sales abuses discovered by investigators included "churning" and "twisting." Churning refers to the sale of new life insurance policies to replace existing policies when that replacement is not in the best interests of the buyer. Twisting is the sale of insurance based upon incomplete or fraudulent product comparisons.
Using the election form, life insurance policyholders can choose one of the following:
As of May 16, Prudential had received 5,823 election forms from Oregon policyholders, including 3,890 forms electing to proceed through ADR and 1,933 electing basic claim relief. Prudential life insurance policyholders who have not received an election form should call the company immediately for more information at 1-800-736-8913. In addition, Oregon consumers who want to register a complaint about any insurance company or agent's practices or who need other consumer assistance may call the Insurance Division at 503-947-7980.