AXA Professional Financial Consultant: Prudential plc is a UK company engaged in financial services. Prudential has a ± 20 million customers worldwide. In addition to the UK, Prudential also operates in 12 countries in Asia and has a Jackson National Life in America. Prudential leave the general insurance business in 2002 and Churchill Insurance license in order to use his name.
Prudential plc was founded in 1848 in Hatton Garden, London under the name Prudential Mutual Assurance Investment and Loan Association. Prudential started its business by providing loans to the professionals through life insurance. Prudential's insurance business to build strength by forming a direct-sales units (agents) whose job it is to visit clients to discuss the needs of their clients and selling life insurance. "Forces" is then for many years known as the "Man from the Pru". This policy proved effective and became the basis of Prudential's growth into one of the largest insurance companies in the world.
But in the early 1980s until the mid-1990s, insurance agents who worked for Prudential Life Insurance to use tactics that are unethical in selling insurance policies from Prudential Life Insurance. The tactics used by the agent is telling clients that already have an insurance policy from Prudential that they can buy additional life insurance with a very low price or by not paying any penny. The agent also said that they (insurance clients) only need to pay the premiums from the policyholder for a specified period. After that, the client will still hold the policy without additional penny. In general cases, the procedures above is not true. Other malpractices committed by agents Prudential is to sell life insurance policies disguised as investments.
Malpractice activities conducted by Prudential agents are called as the "churning". Activities "Churning" means the insurance policy sells the policy to consumers who are not required by the consumer only to generate higher commission for the agent of Prudential. One of the activities carried out in a "churning" insurance policy is to convince consumers / existing clients that they can get an additional policy with a very mild or free. This process can be implemented by giving the client a new insurance policy, and pay the premiums of the insurance policy from the cash value and dividends that accumulate on the existing insurance policy. This process will reduce the cash value of existing policy, which resulted in insurance policies do not provide meaningful benefits. In some cases, this process will make the existing policies are worthless. When the policyholder is not valued, then no additional funds available to pay for the new policy, so that the new policy would be lost. Ultimately, this process resulted in the policyholder has little or no funds at all to be left for their heirs.
The policyholders of Prudential agents routinely perform activities of "churning" of insurance policies as one way to increase the amount of commission they get. The agent will provide a new policy, to pay the new poleis with funds from the old policy, as well as take advantage of commission provide a new insurance policy. The agent also receives a bonus from the insurance company Prudential in this case based on the number of insurance policies they sell. Therefore, a growing number of "churning" the more bonuses received by the agent of the insurer.
In general, when the funds withdrawn from the existing insurance policy in the form of cash or used for other activities, consumers / clients must sign a statement that contains the authority of the use of funds from the insurance policy. In the Prudential case, the agent hid the letter claims as one of the common document. Consumer / client is not informed thoroughly about the documents they signed. Consumers / clients "convinced" by the agent that the statement about the authority of the use of insurance funds used to finance the new policy as a regular routine of documents to be signed. On the other hand there is also a prudential agent who convinced his client to sign a blank document, which will then be filled to take money from existing policyholders.
Activities such as phishing above is just one of the activities of malpractice committed by prudential agent. The agent also informed the client that they (clients) only need to pay policyholder insurance within a few years. The problem that arises is the party of Prudential continuously collect insurance premiums to clients after a period of their policy runs out. Some of the clients who refuse to pay an additional premium, taken the money from the insurance policy. This will reduce the value and benefits of the insurance policy that will be given to the beneficiary when the policyholder dies.
These clients were not informed that there are policies that allow premium payments for a period of several years based on the interest earned by the insurance policy. If the interest rates fall, the money received will not be sufficient to pay any premiums. In this case, policyholders are required to pay the difference or pay the policyholder risk to lose its value. This will cause the client does not have an insurance policy again. Seoerti these policies should be delivered clearly to the consumer. The consumer can not easily to not be notified that no payment is required after a certain period of time. Consumers should be told what are the factors associated with no additional premium.
Consumers know that they have been cheated after they received notice that their existing policies to expire, or behutang funds from existing policyholders who are used to pay premiums of new policies. During this time they were only informed by the agent, that these things do not need to worry about or not a significant problem. During this time, they were notified by the insurance agent that they run well.
The last activity malpractice committed by agents of Prudential is to sell life insurance policy disguised as a form of investment. For example, the agent will tell you that they sell an investment to ease the burden of insurance for the children of the client. The problem is what is referred to as investments by the agent is nothing but a life insurance policy that generates cash value. Malpractice arises because consumers do not understand that they not only generate cash value, but they also pay the fund a life insurance policy. Life insurance is not required by the consumer. Funds used to purchase an insurance policy is not a cash-value, meaning that consumers lose all their funds. "Investment" is not any good.
In the mid-1990s, investigators attempted to obtain funds from consumers Prudential lost. Investigators get a lot of deception by the agent to carry out the "churning" insurance policy for their personal gain. In every state of America was carried out investigation on these cases. In the end, Prudential was fined about 50 million dollars by some insurance investigator agency. In addition, Prudential was also fined 20 million dollars by the National Association of Securities Dealers.
Insurance companies are also carrying out "a class-action lawsuit" based on all the funds that purchased life insurance policies between 1982 to 1995, covering almost 10.7 million insurance policy. Prudential also paid money amounting to 2.8 billion dollars for its policyholders. This is in addition to the fines imposed by corporate bodies.
But in reality not as easy as expected to get monetary compensation for victims of malpractice. There are many reports that clients are required to fill out documents that explain how they lost money because of the practice of the Prudential agent. There are also reports that many consumers who complain about the amount of compensation they get, which in some cases they are only given compensation fund not more than 100 dollars. There are also consumers who are tired of the necessary procedures or make complaints which they consider will not mean much, so they accept whatever compensation is offered.
Even worse, during the process of compensation is characterized by a variety of activities that deviate from the law. Some employees are required to speed up the claims of prudence rather than using the correct procedure. There are also reports that show the contest to see who can make the process of insurance claims is the fastest. Employees reported that they were intimidated because of their reporting activities.
At present, there are no legal proceedings against Prudential is canceled or postponed practice deception regarding life insurance. Prudential also has mengumumpkan replacement of their sales managers. Manager now not only paid by commission only sales. They also assessed / paid based on the number of existing clients who successfully they maintain, the quality of people they employ as agents, as well as in maintaining the cash value of insurance consumers.
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