Tr?id=566623520170033&ev=PageView&noscript=1

Prudential Improperly Collected Life Insurance Premiums and Informed Claimants They Were Ineligible

Posted on April 28th, 2023 at 12:44 PM
Prudential Improperly Collected Life Insurance Premiums and Informed Claimants They Were  Ineligible

From the desk of Jim Eccleston at Eccleston Law 

The Department of Labor (DOL) has agreed to a settlement with Prudential after the insurer improperly collected life insurance premiums from customers and subsequently denied coverage claiming ineligibility.

Prudential improperly denied nearly 200 life insurance claims filed between 2017 and 2020, according to the DOL. The policies, which would have paid out between $3 to $7 million, were part of employer-sponsored insurance where some workers had opted in for supplemental coverage. According to the DOL, Prudential denied claims in cases where workers chose coverage in plans that utilized a different company as the record keeper. When Prudential is a group plan’s record keeper, it often determines whether a worker meets the criteria for supplemental coverage. However, when a different company serves as record keeper, the company doesn’t ensure that workers are eligible for those policies even while collecting premiums that are sent to Prudential, according to the settlement.

“Participants were paying premiums for life insurance policies that never existed. The DOL will continue to work to end this disturbing practice, and we urge all insurers to examine their practices to ensure they do not engage in similar conduct”, according to the DOL. The DOL further noted that “parallel investigations have found that other life insurers also engaged in similar practices”, but no other companies were named. The settlement agreement now restricts Prudential from denying life insurance claims on the basis of ineligibility if the company has collected premiums for more than three months.

 

Eccleston Law LLC represents financial advisors and investors nationwide in securities, employment, transition, regulatory and disciplinary matters.

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

As a financial advisor with over 20 years of experience, I feel fortunate to call Jim my attorney and friend. He is a fantastic lawyer and trusted advisor. He is skilled in the matters necessary to do the job well. He uses his thoughtful approach and calm demeanor to achieve a positive outcome for the client. If you want to feel confident that nothing will be missed and that you will be represented in a highly professional manner, call Jim Eccleston.

Bill C. and Dan M.

LATEST NEWS AND ARTICLES

1780676353 Law
June 5, 2026
Redemption Pressure Mounts Across Private Credit and Non-Traded BDC Market

Investors continued pulling money from private credit and nontraded business development companies ("BDCs") during the first quarter of 2026 as concerns about liquidity and portfolio valuations intensified across the sector, according to reporting by InvestmentNews.

1780588152 Law
June 4, 2026
Former Wells Advisor Alleges Age Discrimination

A former Wells Fargo senior private client financial advisor in Wisconsin has filed a federal lawsuit alleging the firm terminated him because of his age rather than an alleged workplace profanity incident.

1780507151 Law
June 3, 2026
Starwood REIT Suspends Most Redemptions Amid Liquidity Pressure

Starwood Real Estate Income Trust (SREIT) has announced a temporary suspension of its share repurchase program for most investors.