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Prudential settles with Garamendi

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Agents & Brokers Benefits Legislation & Regulation Health Care Benefits P/C Insurers Retirement Benefits More + Less -

SACRAMENTO, Calif.--Prudential Insurance Co. of America agreed Tuesday to disclose all compensation it pays to brokers as part of a settlement with California officials investigating the insurer's compensation practices.

The announcement came shortly after Prudential entered a $19 million settlement with New York Attorney General Eliot Spitzer, who also was investigating the Newark, N.J.-based insurer's compensation practices.

In its settlement with California Insurance Commissioner John Garamendi, Prudential will not make any payments, but it agreed to uphold certain business practices on its group life, accidental death and dismemberment, disability, health, dental and vision insurance coverages, according to a statement from the California Insurance Department.

Under the terms of the settlement, Prudential will:

  • Disclose the commissions paid on employee benefits business;
  • provide an estimate of contingent commissions paid;
  • provide training and oversight for its employees on compliance with the settlement;
  • cooperate with the department with other ongoing investigations;
  • make its broker compensation practices available on its Web site;
  • not enter into any financial relationships, including equity ownership, with brokers; and
  • not sponsor broker production contests.

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