Bloomberg News reports that the announcements Monday by regulators followed fraud and misconduct allegations raised last week in a whistle-blower lawsuit claiming the insurer covered up an internal inquiry that found Wells Fargo may have fraudulently opened Prudential’s low-cost MyTerm policies.
California Insurance Commissioner Dave Jones said that his department will work with New Jersey watchdogs to examine “all aspects” of the allegations, and that Prudential’s practices will be investigated as well.
“We’ll be looking at whether there were any licensing violations associated with” Wells Fargo’s sales, Jones said Monday in a phone interview. “We’ll also be looking at whether they violated the law by allegedly signing people up for insurance without their permission.”
The insurer said earlier Monday that it’s halting distribution of MyTerm life policies through Wells Fargo. The coverage was available through kiosks in Wells Fargo branches, or could be purchased online using the bank’s accounts. Prudential said it will reimburse customers who were charged for coverage they didn’t want.
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