NU Online News Service, Dec. 20, 7:48 p.m. – Prudential Financial Inc., Newark, N.J., says it has agreed to settle a legal dispute over at least 201 in-force life insurance policies shaped by race-based underwriting rules that were in effect decades ago.
Prudential will make amends for the race-based underwriting practices by “equalizing” the value of the affected policies and contributing $500,000 each to the United Negro College Fund and the NAACP Legal Defense Fund, the company says.
“Race-based underwriting should never have occurred in the life insurance industry,” Prudential says in a statement about the 201 policies.
The charitable donations and equalizations are part of a settlement negotiated with Milberg Weiss Bershad Hynes & Lerach L.L.P., New York, and other law firms that have filed suits against life insurers based on complaints about the lingering effects of race-based underwriting practices.
The New Jersey Department of Banking and Insurance and other regulators have reviewed the settlement proposal, Prudential says.