Prudential Payout Could Total $2.5 Billion

Prudential Insurance Co. of America said that more than 1 million policyholders have expressed interest in receiving restitution in a class-action settlement stemming from the company’s sales practices. Prudential could end up paying more than $2.5 billion if all 1.1 million policyholders submit forms and qualify. The restitution process was set up to settle allegations that Prudential sales agents misled policyholders about what they were purchasing. The settlement was approved by the U.S. District Court in Newark, N.J., in March. Under the agreement, people who purchased as many as 10.7 million permanent life insurance policies between 1982 and 1995 are eligible. Standard & Poor’s is retaining the Newark, N.J.-based Prudential’s claims-paying ability rating at double A-minus for now.