US insurer suspends life policies until end of sales investigation

Prudential is suspending sales of its MyTerm life insurance policies through US bank Wells Fargo, The New York Times reported.

“We stand behind the MyTerm product but have decided to suspend sales of that product through Wells Fargo’s retail banking franchise until we have all the facts about whether it is being distributed properly and in the best interest of customers,” Wells Fargo spokesman Mark Folk was cited by the newspaper as saying.

Three former Prudential employees had filed a whistleblower lawsuit claiming the company tried to cover up evidence that Wells Fargo bankers opened fake accounts in customers’ names and had premiums withdrawn from their accounts without their consent or knowledge.

The New York Times also noted that since bankers are not licensed to sell insurance, Wells Fargo employees were encouraged to steer customers to either a self-service kiosk in bank branches or a website where they could sign up for MyTerm.

“Some Wells Fargo bankers appear to have signed people up for MyTerm without telling them, according to the three whistleblowers from Prudential,” the story said.

“In some cases, bankers opened MyTerm policies, closed them after a month or two and then promptly reopened them to bolster their sales numbers, the evidence in the lawsuit suggests.”

Adrian Flores

Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.

You can contact him on [email protected].