Prudential Gets Final OK for $9M Life Insurance Settlement

Prudential Insurance Co. of America‘s $9 million settlement with life insurance beneficiaries received final court approval April 5.

The deal resolves a nine-year-old lawsuit claiming Prudential’s practice of paying life insurance benefits in checkbook-style retained asset accounts—rather than lump-sum payments—violates federal benefits law because it allows Prudential to continue earning interest on policy proceeds that have been distributed to their rightful owners. A federal judge in 2017 said Prudential was wrong to pay benefits through these accounts because the relevant insurance policies required payments be made in “one sum.”

The settlement is expected to provide an average payment of ...