Prudential Settles Life Insurance Checkbook Spat for $9M

Prudential Insurance Co. of America will pay $9 million to settle a class action challenging how it distributes life insurance benefits.

The deal, announced in court papers filed Oct. 29, is expected to provide an average payment of more than $900 to each of 6,086 people who received benefits through life insurance plans sponsored by JPMorgan Chase and Con-Way Inc.

The eight-year-old lawsuit says 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 ...