Opposition to Prudential Pact Remains

Although four holdout states, including California, last week dropped their opposition to a class-action settlement affecting more than 8 million Prudential Insurance Co. policyholders, a federal court hearing Monday on whether to give final approval to the pact made clear that there is still strong opposition from lawyers for some groups of customers. Prudential and the main plaintiffs’ lawyers argued that the settlement, valued at between $410 million and $1.9 billion, is an “exemplary” pact that would enable life insurance policyholders who were defrauded to get their money back. But dissenting lawyers contended that few customers could understand the complicated legal notice they received from Prudential and that few would file claims. They argued that Prudential knows who many of the defrauded customers are and could reimburse them without receiving claims. U.S. District Judge Alfred M. Wolin is expected to approve the pact in March, which probably will be subject to appeals.