The S.E. Texas Record (8/19/15) reports that Irina Schmedes, a former Texas physician, filed a long-term disability claim with Prudential after she found she could not work. Prudential denied her claim and Schmedes filed the lawsuit in August 2015, alleging Prudential used improper disability standards.
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Meanwhile, Prudential Financial faces a class-action lawsuit filed by investors who accuse the company of misstating its liabilities by holding onto funds that should have been paid to beneficiaries. According to reports, US District Judge Madeline Cox Arleo approved the class action, which involved shareholders who purchased certain Prudential stock between May 5, 2010 and November 4, 2011.
The lawsuit alleged Prudential did not properly disclose death benefit liabilities in its reports for 2010 and only made those liabilities known in May 2011, after announcing it was being audited for not complying with unclaimed property laws. An investigation by California State Controller John Chiang reportedly found that some insurers knew about the death of a policyholder but did not let beneficiaries know that they could receive payouts on policies.
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Plaintiffs allege that Prudential’s failure to pay beneficiaries or put the money to state unclaimed property funds made it seem that Prudential had strong income, despite actually having liabilities. The lawsuit was initially filed by the City of Sterling Heights General Employees’ Retirement System in 2012. In her ruling on class-action status, Judge Arleo named National Shopmen Pension Fund as the lead plaintiff.
The Schmedes lawsuit is case number 2:15-cv-01410-JRG-RSP in the Eastern District of Texas. The Prudential Financial lawsuit is City of Sterling Heights General Employees’ Retirement System v. Prudential Financial Inc. et al., case number 2:12-cv-05275, in the U.S. District Court for the District of New Jersey.