NU Online News Service, Oct. 15, 5:25 p.m. – Prudential Insurance Company of America, Newark, N.J., says the New Jersey commissioner of banking and insurance has approved its demutualize plan.

Prudential policyholders voted to approve the demutualization plan in July.

“We’re gratified with the commissioner’s action today,” Mark Grier, the Prudential executive vice president in charge of the demutualization effort, said today in a statement. “This approval affirms the overwhelming support we received from our policyholders in July.”

Prudential started out as a stock company owned by public investors, but it began pulling back from shareholder ownership around the turn of the century, in part as a result of a controversy about whether public shareholders had the long-term outlook necessary to serve as owners of an insurance company.

Prudential has been a mutual insurer completely owned by its policyholders since the 1940s.

Now the company hopes to go back to a public stock company charter and compensate the policyholder-owners for their loss of policy-based ownership by giving them the full, pre-demutualization value of the company in the form of stock, cash and policy credits.

The company hopes to sell additional shares to the public by holding an initial public offering by year end.