320 W. Washington Street
Springfield, Illinois 62767
(217) 782-4515
http://insurance.illinois.gov
Illinois Department of Insurance
JB Pritzker
Governor
Dana Popish Severinghaus
Director
VI
A ELECTRONIC MAIL
J
uly 5, 2022
Mr. Charles F. Lowrey, President
c/o Jonathan P. Morris
Prudential Insurance Company of America
Pruco Life Insurance Company
751 Broad Street
Newark, NJ. 07102
Re
: Prudential Insurance Company of America, NAIC 68241
Pruco Life Insurance Company, NAIC 79227
Market Conduct Examination Report Closing Letter
Dear Mr. Lowrey:
T
he Department has received your Company’s proof of compliance. Therefore, the Department is closing its file
on this exam.
I
intend to ask the Director to make the Examination Report and Stipulation and Consent Order available for public
inspection as authorized by 215 ILCS 5/132. At the Department’s discretion, specific content of the report may be
subject to redaction for private, personal, or trade secret information prior to making the report public. However,
any redacted information will be made available to other regulators upon request.
P
lease contact me if you have any questions.
S
incerely,
E
rica Weyhenmeyer
Chief Market Conduct Examiner
Illinois Department of Insurance
320 West Washington St., 5th Floor
Springfield, IL 62767
Phone: 217-782-1790
E-mail: Erica.Weyhenmeyer@Illinois.gov
1
Illinois Department of Insurance
Market Conduct Examination of
Prudential Insurance Company of America
2
MARKET CONDUCT EXAMINATION REPORT
DATE OF EXAMINATION: August 27, 2021
EXAMINATION OF: Prudential Insurance Company of America
NAIC Number: 68241
STATUTORY HOME
OFFICE: 751 Broad Street
Newark, NJ 07102-3777
PERIOD COVERED
BY EXAMINATION: September 1, 2019 through August 31, 2020
COMPLAINTS: March 1, 2019 through August 31, 2020
EXAMINERS: Alan Klinc, MCM
John Drake, AIE, MCM, APIR, ChFC, CLU, RHU, FLMI, HIA
Chris Heisler, Examiner-in-Charge, CIE, MCM, FLMI, ARC
3
INDEX
Page
I. FOREWORD 4
II. SCOPE OF EXAMINATION 5
III. COMPANY PROFILE 6
IV. SUMMARY 7
V. METHODOLOGY 8
VI. SELECTION OF SAMPLES 10
VII. FINDINGS 11
A. Claim Practices 11
B. New Business 12
C. Policyholder Services 12
D. Complaints and Litigation 13
4
I. FOREWORD
This is a comprehensive market conduct examination report of the Prudential Insurance Company
of America (PICA) (NAIC Code 68241). The Illinois Department of Insurance (“Department”)
also examined Pruco Life Insurance Company (PRUCO) (a wholly owned subsidiary of PICA)
(NAIC Code 79227) and Prudential Annuities Life Assurance Corporation (PALAC) (NAIC Code
86630) at the same time. Separate market conduct exam reports were prepared for each company.
This report is specifically for Prudential Insurance Company of America. Samples were selected
pro rata across the three companies.
This examination report is generally a report by exception. However, failure to criticize specific
practices, procedures or files does not constitute approval thereof by the Illinois Department of
Insurance.
During this examination, examiners cited errors made by the Company. Statutory citations were
as of the examination period unless otherwise noted.
5
II. SCOPE OF THE EXAMINATION
The Department has the authority to conduct this examination pursuant to, but not limited to, 215
ILCS 5/132.
The purpose of the examination was to determine if the Company complied with Illinois statutes,
and Illinois Administrative Code and to consider whether the Company’s operations are consistent
with public interest. The primary period covered by this review was September 1, 2019 through
August 31, 2020 for claims and March 1, 2019 through August 31, 2020 for complaints unless
otherwise noted. Errors discovered outside the time period of the examination may also be
included in the report.
The examination was a comprehensive examination involving the following business functions of
the individual life insurance and individual annuity lines of business: new business, replacements,
policy service, claims handling practices and handling of consumer and Department complaints.
In performing this examination, the examiners reviewed a sample of the Company’s practices,
procedures, extra-contractual claim adjudication guidelines, and files. Therefore, some
noncompliant events may not have been discovered. As such, this report may not fully reflect all
the practices and procedures of the Company. As indicated previously, failure to identify or
criticize improper or noncompliant business practices in this state or other jurisdiction does not
constitute acceptance of such practices.
6
III. COMPANY PROFILE
History:
Prudential Financial, Inc. (“Prudential Financial”) with over 145 years in financial services, has
operations in the United States, Asia, Europe and Latin America. Through its subsidiaries and
affiliates, they offer a wide array of financial products and services, including life insurance, an-
nuities, retirement-related products and services, mutual funds and investment management. They
offer these products and services to individual and institutional customers through proprietary and
third-party distribution networks. Their principal executive offices are located in Newark, New
Jersey, and Prudential Financials’ Common Stock is publicly traded on the New York Stock Ex-
change under the ticker symbol “PRU”.
Prudential Insurance Company of America (“PICA”) is a direct subsidiary of Prudential Financial
and is domiciled in New Jersey. Its principal insurance regulatory authority is the New Jersey
Department of Banking and Insurance (“NJDOBI”). They conduct their business and home office
functions in locations throughout the U.S, and also conduct back-office functions outside the U.S.
Operations:
The Company maintains operations globally with policy services being performed domestically
and internationally.
Written premium and market share in Illinois per the NAIC Market Analysis Review System for
PICA are as follows:
Line of Business
2019
Premiums
Written
2019
Market
Share
2018
Premiums
Written
2018
Market
Share
Individual Life
$58,552,046
0.923%
$62,613,153
1.147%
Individual Annuity
$7,112,079
0.086%
$4,083,076
0.056%
7
IV. SUMMARY
A comprehensive market conduct examination of Prudential Insurance Company of America
(PICA) was performed to determine compliance with Illinois statutes and Illinois Administrative
Code.
During the examination, the Department noted a consistent failure of the Company to maintain
records of correspondence to and records of searches for potential beneficiaries of both Life and
Annuity policies, in violation of 215 ILCS 5/154.6(c)(d).
The following represents a summary of findings; however specific details are found in each section
of the report.
TABLE OF TOTAL VIOLATIONS
Prudential Insurance Company of America
Crit #
Statute
/Rule
Description of Violations
Files
Reviewed
Number of
Violations
Findings
Section
Error
%
8
IAC
919.70(a)(2);
919.40
Paid Claims Individual Life - Failure
to provide Notice of Availability of
the Department of Insurance on delay
letter.
105 17 A1 16%
10
215 ILCS
5/224(1)(l)
Paid Claims Individual Life - Failure
to notify beneficiary at time of claim
of statutory interest provision.
105 40 A1 38%
14
215 ILCS
5/154.6 (c) (d)
Paid Claims Individual Life - Failure
to adopt reasonable standards to fulfil
contractual obligations by contacting
beneficiaries.
105 11 A1 11%
12
IAC
919.70(a)(2)
Paid Claims Individual Annuity -
Failure to provide delay letter within
45 days.
22 8 A4 36%
13
IAC
919.70(a)(2);
919.40
Paid Claims Individual Annuity -
Failure to provide Notice of Availa-
bility of the Department of Insurance
on delay letter.
22 1 A4 5%
14
215 ILCS
5/154.6 (c) (d)
Paid Claims Individual Annuity -
Failure to adopt reasonable standards
to fulfil contractual obligations by
contacting beneficiaries.
22 6 A4 28%
8
V. METHODOLOGY
The market conduct examination covered the business written for the period of September 1, 2019
through August 31, 2020. Complaints covered the period of March 1, 2019 through August 31,
2020. Specifically, the examination focused on a review of the following areas:
1. Claims Analysis
2. New Business
3. Policy Service (policy loans, cash surrenders and non-forfeitures)
4. Consumer Complaints, Insurance Department Complaints and Litigation
The review of these categories was accomplished through examination of paid and denied claim
files, underwritten and declined new business files, policy loans, cash surrendered policy files,
extended term and reduced paid-up policy files, Insurance Department and consumer complaint
files. Each of these categories was examined for compliance with Department Regulations and
applicable State Laws.
The report concerns itself with improper practices performed by the Company, resulting in a
failure to comply with Illinois statutes and/or administrative rules. Criticisms were prepared and
communicated to the Company addressing violations discovered in the review process. All valid
criticisms were incorporated in this report.
The following methods were used to obtain the required samples and to assure a methodical
selection. Samples were selected pro rata across the three companies.
Claims Analysis
Claim surveys were selected using the following criteria:
1. Paid Claims - Payment for claims made during the examination period.
2. Denied Claims - Denial of benefits during the examination period for losses not covered
by policy provisions.
All claims were reviewed for compliance with policy contracts and endorsements, applicable
sections of the Illinois Insurance Code (215 ILCS 5/1 et seq.) and the Illinois Administrative
Code (50 Ill. Adm. Code 101 et seq.).
All median payment periods were measured from the date necessary proofs of loss were
received to the date of payment or denial to the insured or the beneficiary. The examination
period for the claims review was September 1, 2019 through August 31, 2020.
9
New Business
New Business surveys were selected using the following criteria:
1. Issued New Business – New policies underwritten and issued during the examination pe-
riod.
2. Not Issued – Applications taken but not issued with a declination letter.
All files were reviewed for compliance with applicable sections of the Illinois Insurance
Code (215 ILCS 5/1 et seq.) and the Illinois Administrative Code (50 Ill. Adm. Code 101
et seq.).
Policy Service
Policy service surveys were selected using the following criteria:
1. Policy Loans – Loans made during the examination period.
2. Cash Surrenders – Surrenders made during the examination period.
3. Non-forfeiture Options – Policies that lapsed due to non-payment of premiums and
exercised the option to Reduced Paid-Up Insurance or Extended Term Insurance.
Consumer, Insurance Department Complaints and Litigation
The Company provided all files relating to complaints received via the Department of
Insurance as well as those received directly by the Company from the insured or his/her
representative. A copy of the Company’s complaint register was also reviewed.
The Company provided a listing of all open and closed litigation files. A review was performed
on the closed litigation files.
Median periods were measured from the date of notification of the complaint to the date of
response by the Company. The period of review was March 1, 2019 through August 31, 2020.
10
VI. SELECTION OF SAMPLES
Prudential Insurance Company of America
Survey
#Reviewed
%Reviewed
CLAIMS ANALYSIS
Paid Individual Life
105
1%
Paid Individual Life Waiver of Premium
24
50%
Denied Individual Life Waiver of Premium
2
100%
Paid Individual Annuity
22
10%
NEW BUSINESS
Individual Annuity Issued
1
14%
Individual Annuity Replacements
1
25%
Individual Annuity Withdrawn
2
100%
POLICY SERVICES
Policy Loans In Force
93
4%
Non-Forfeiture Options
84
9%
Cash Surrenders Individual Life
99
2%
Cash Surrenders Individual Annuity
13
4%
CONSUMER COMPLAINTS
130
50%
DEPARTMENT OF INSURANCE
COMPLAINTS
44
100%
CLOSED LITIGATION (Company-wide)
16
100%
11
VII. FINDINGS
A. Claims Practices
The examiners reviewed the Company’s claim practices to determine its efficiency in
handling complaints, accuracy of payment, adherence to contract provisions and compli-
ance with Illinois laws and regulations.
1. Paid Individual Life Claims
A review of 105 paid individual life claims produced four (4) criticisms. Criticism
8 was issued to the Company. The Company failed to provide the Notice of Avail-
ability of the Department of Insurance on the delay letter for 17 claims as required
by 50 Ill. Adm. Code 919.70(a)(2) and 919.40.
Criticism 10 was issued to the Company. The Company failed to notify beneficiary
at time of claim of statutory interest provision for 40 claims as required by 215
ILCS 5/224(1)(l).
Criticism 14 was issued to the Company for 11 instances of failure to adopt reason-
able standards to fulfil contractual obligations when the Company was aware of a
deceased policyholder and did not contact the beneficiary on file to begin claims
processing in violation of prompt investigation under 215 ILCS 5/154.6 (c) (d).
The median for payment was six (6) days.
2. Paid Individual Life Waiver of Premium
A review of 24 paid individual life waiver of premium claims produced no criti-
cisms.
The median for payment was 10 days.
3. Denied Individual Life Waiver of Premium
A review of two (2) denied individual life waiver of premium claims produced no
criticisms.
The median for denial was four (4) days.
12
4. Paid Individual Annuity
A review of 22 paid individual annuity claims produced three (3) criticisms. Crit-
icism 12 was issued to the Company. The Company failed to notify the insured’s
beneficiary with a reasonable written explanation for the delay beyond 45 days for
eight (8) claims as required by 50 Ill. Adm. Code 919.70(a)(2).
Criticism 13 was issued to the Company. The Company failed to provide the Notice
of Availability of the Department of Insurance on the delay letter for one (1) claim
as required by 50 Ill. Adm. Code 919.70(a)(2).
Criticism 14 was issued to the Company for 6 (six) instances of failure to adopt
reasonable standards to fulfil contractual obligations when the Company was aware
of a deceased policyholder and did not contact the beneficiary on file to begin
claims processing in violation of prompt investigation under 215 ILCS 5/154.6 (c)
(d).
The median for payment was one (1) day.
B. New Business
1. Individual Annuity Replacements
A review of one (1) issued replacement contract produced no criticisms.
2. Individual Annuity Issued
A review of one (1) issued contract produced no criticisms.
3. Individual Annuity Withdrawn
A review of two (2) withdrawn applications produced no criticisms.
C. Policyholder Services
1. Policy Loans
A review of 93 policy loan files produced no criticisms.
2. Non-Forfeiture Options
A review of 84 non-forfeiture option files produced no criticisms.
3. Individual Life Cash Surrender
A review of 99 individual life cash surrender files produced no criticisms.
13
The median for surrender was five (5) days.
4. Individual Annuity Cash Surrender
A review of 13 individual annuity cash surrender files produced no criticisms.
The median for surrender was two (2) days
D. Complaints and Litigation
A review of 130 consumer complaints produced no criticisms.
A review of 44 Illinois Department of Insurance complaints produced no criticisms.
A company-wide review of 16 closed litigation files produced no criticisms.
1
Illinois Department of Insurance
Market Conduct Examination of
Pruco Life Insurance Company
2
MARKET CONDUCT EXAMINATION REPORT
DATE OF EXAMINATION: August 27, 2021
EXAMINATION OF: Pruco Life Insurance Company
NAIC Number: 79227
STATUTORY HOME
OFFICE: 8601 North Scottsdale Road, Suite 300
Scottsdale, AZ 85253-2738
PERIOD COVERED
BY EXAMINATION: September 1, 2019 through August 31, 2020
COMPLAINTS: March 1, 2019 through August 31, 2020
EXAMINERS: Alan Klinc, MCM
John Drake, AIE, MCM, APIR, ChFC, CLU, RHU, FLMI, HIA
Chris Heisler, Examiner-in-Charge, CIE, MCM, FLMI, ARC
3
INDEX
Page
I. FOREWORD 4
II. SCOPE OF EXAMINATION 5
III. COMPANY PROFILE 6
IV. SUMMARY 7
V. METHODOLOGY 8
VI. SELECTION OF SAMPLES 10
VII. FINDINGS 11
A. Claim Practices 11
B. New Business Practices 12
C. Policyholder Services 12
D. Complaints and Litigation 13
4
I. FOREWORD
This is a comprehensive market conduct examination report of the Pruco Life Insurance Company
(PRUCO) (NAIC Code 79227). The Illinois Department of Insurance (“Department”) also
examined Prudential Insurance Company of America (PICA) (NAIC Code 68241) and Prudential
Annuities Life Assurance Corporation (PALAC) (NAIC Code 86630) at the same time. Separate
market conduct exam reports were prepared for each company. This report is specifically for
Pruco Life Insurance Company. Samples were selected pro rata across the three companies.
This examination report is generally a report by exception. However, failure to criticize specific
practices, procedures or files does not constitute approval thereof by the Illinois Department of
Insurance.
During this examination, examiners cited errors made by the Company. Statutory citations were
as of the examination period unless otherwise noted.
5
II. SCOPE OF THE EXAMINATION
The Department has the authority to conduct this examination pursuant to, but not limited to, 215
ILCS 5/132.
The purpose of the examination was to determine if the Company complied with Illinois statutes,
and Illinois Administrative Code and to consider whether the Company’s operations are consistent
with public interest. The primary period covered by this review was September 1, 2019 through
August 31, 2020 for claims and March 1, 2019 through August 31, 2020 for complaints unless
otherwise noted. Errors discovered outside the time period of the examination may also be
included in the report.
The examination was a comprehensive examination involving the following business functions of
the individual life insurance and individual annuity lines of business: new business, replacements,
policy service, claims handling practices and handling of consumer and Department complaints.
In performing this examination, the examiners reviewed a sample of the Company’s practices,
procedures, extra-contractual claim adjudication guidelines and files. Therefore, some
noncompliant events may not have been discovered. As such, this report may not fully reflect all
the practices and procedures of the Company. As indicated previously, failure to identify or
criticize improper or noncompliant business practices in this state or other jurisdiction does not
constitute acceptance of such practices.
6
III. COMPANY PROFILE
History:
Prudential Financial, Inc. (“Prudential Financial”) with over 145 years in financial services, has
operations in the United States, Asia, Europe and Latin America. Through its subsidiaries and
affiliates, they offer a wide array of financial products and services, including life insurance, an-
nuities, retirement-related products and services, mutual funds and investment management. They
offer these products and services to individual and institutional customers through proprietary and
third-party distribution networks. Their principal executive offices are located in Newark, New
Jersey, and Prudential Financials’ Common Stock is publicly traded on the New York Stock Ex-
change under the ticker symbol “PRU”.
Pruco Life Insurance Company (“Pruco Life”) is a wholly-owned subsidiary of PICA. Pruco Life
is a stock life insurance company organized in 1971 under the laws of the State of Arizona. It is
licensed to sell life insurance and annuities in the District of Columbia, Guam and in all states
except New York, and sells such products primarily through affiliated and unaffiliated distributors.
Pruco Life has one wholly-owned insurance subsidiary, Pruco Life Insurance Company of New
Jersey (“PLNJ”). PLNJ is a stock life insurance company organized in 1982 under the laws of the
State of New Jersey. It is licensed to sell life insurance and annuities in New Jersey and New York
only. The Company sells or has sold variable annuities, variable life, universal life and term life
insurance primarily through affiliated and unaffiliated distributors in the United States.
Operations:
The Company maintains operations globally, with policy services being performed domestically
and internationally.
Written premium and market share in Illinois per the NAIC Market Analysis Review System for
PRUCO are as follows:
Line of Business
2019
Premiums
Written
2019
Market
Share
2018
Premiums
Written
2018
Market
Share
Individual Life
$225,378,811
3.552%
$213,581,579
3.911%
Individual Annuities
$351,246,447
4.245%
$309,005,424
4.222%
7
IV. SUMMARY
A comprehensive market conduct examination of Pruco Life Insurance Company was performed
to determine compliance with Illinois statutes and Illinois Administrative Code.
During the examination, the Department noted a consistent failure of the Company to maintain
records of correspondence to and records of searches for potential beneficiaries of both Life and
Annuity policies, in violation of 215 ILCS 5/154.6(c)(d).
The following represents a summary of findings; however specific details are found in each section
of the report.
TABLE OF TOTAL VIOLATIONS
Pruco Life Insurance Company
Crit
#
Statute
/Rule
Description of Violations
Files
Reviewed
Number of
Violations
Findings
Section
Error %
10
215 ILCS
5/224(1)(l)
Paid Claims Indiv Life - Failure to no-
tify beneficiary at time of claim of
statutory interest provision.
4
1
A1 25%
12
IAC
919.70(a)(2)
Paid Claims Indiv Annuity - Failure to
provide delay letter within 45 days.
63
15 A4 24%
13
IAC
919.70(a)(2);
919.40
Paid Claims Indiv Annuity - Failure to
provide Notice of Availability of the
Department of Insurance on delay let-
ter.
63
7
A4 11.1%
14
215 ILCS
5/154.6 (c) (d)
Paid Claims Individual Annuity - Fail-
ure to adopt reasonable standards to
fulfil contractual obligations by con-
tacting beneficiaries.
63
30 A4 48%
3
IAC
919.50(a)(1);
919.40
Denied Claims Indiv Life - Failure to
provide Notice of Availability of the
Department of Insurance on denial let-
ter.
3 1
A2 33%
4
IAC
919.70(a)(2);
919.40
Denied Claims Indiv Life - Failure to
provide Notice of Availability of the
Department of Insurance on delay let-
ters.
3
3 A2 100%
5 IAC 917.70(a)
New Business Indiv Annuity - Failure
to require a statement signed by the
agent and the applicant as to whether
or not any existing life insurance or
annuity will be replaced by the new
policy.
58 3
B4 5.2%
8
V. METHODOLOGY
The market conduct examination covered the business written for the period of September 1, 2019
through August 31, 2020. Complaints covered the period of March 1, 2019 through August 31,
2020. Specifically, the examination focused on a review of the following areas:
1. Claims Analysis
2. New Business
3. Policy Service (policy loans, cash surrenders and non-forfeitures)
4. Consumer Complaints, Insurance Department Complaints and Litigation
The review of these categories was accomplished through examination of paid and denied claim
files, underwritten and declined new business files, policy loans, cash surrendered policy files,
extended term and reduced paid-up policy files, Insurance Department and consumer complaint
files. Each of these categories was examined for compliance with Department Regulations and
applicable State Laws.
The report concerns itself with improper practices performed by the Company, resulting in a
failure to comply with Illinois statutes and/or administrative rules. Criticisms were prepared and
communicated to the Company addressing violations discovered in the review process. All valid
criticisms were incorporated in this report.
The following methods were used to obtain the required samples and to assure a methodical
selection. Samples were selected pro rata across the three companies.
Claims Analysis
Claim surveys were selected using the following criteria:
1. Paid Claims - Payment for claims made during the examination period.
2. Denied Claims - Denial of benefits during the examination period for losses not covered
by policy provisions.
All claims were reviewed for compliance with policy contracts and endorsements, applicable
sections of the Illinois Insurance Code (215 ILCS 5/1 et seq.) and the Illinois Administrative
Code (50 Ill. Adm. Code 101 et seq.).
All median payment periods were measured from the date necessary proofs of loss were
received to the date of payment or denial to the insured or the beneficiary. The examination
period for the claims review was September 1, 2019 through August 31, 2020.
9
New Business
New Business surveys were selected using the following criteria:
1. Issued New Business – New policies underwritten and issued during the examination pe-
riod.
2. Not Issued – Applications taken but not issued with a declination letter.
All files were reviewed for compliance with applicable sections of the Illinois Insurance
Code (215 ILCS 5/1 et seq.) and the Illinois Administrative Code (50 Ill. Adm. Code 101
et seq.).
Policy Service
Policy service surveys were selected using the following criteria:
1. Policy Loans – Loans made during the examination period.
2. Cash Surrenders – Surrenders made during the examination period.
3. Non-forfeiture Options – Policies that lapsed due to non-payment of premiums and
exercised the option to Reduced Paid-Up Insurance or Extended Term Insurance.
Consumer, Insurance Department Complaints and Litigation
The Company provided all files relating to complaints received via the Department of
Insurance as well as those received directly by the Company from the insured or his/her
representative. A copy of the Company’s complaint register was also reviewed.
The Company provided a listing of all open and closed litigation files. A review was performed
on the closed litigation files.
Median periods were measured from the date of notification of the complaint to the date of
response by the Company. The period of review was March 1, 2019 through August 31, 2020.
10
VI. SELECTION OF SAMPLES
Pruco Life Insurance Company
Survey
#Reviewed
%Reviewed
CLAIMS ANALYSIS
Paid Individual Life
4
1%
Denied Individual Life
3
100%
Paid Individual Life Waiver of Premium
5
46%
Paid Individual Annuity
63
10%
NEW BUSINESS
Individual Life Issued
69
2%
Individual Life Replacements
45
2%
Individual Life Declined
84
21%
Individual Life Not Taken/Withdrawn
20
3%
Individual Annuity Issued
58
5%
Individual Annuity Replacements
31
5%
Individual Annuity Declined
19
100%
Individual Annuity Withdrawn
15
50%
POLICY SERVICES
Policy Loans In Force
23
4%
Non-Forfeiture Options
2
7%
Cash Surrenders Individual Life
16
2%
Cash Surrenders Individual Annuity
75
4%
CONSUMER COMPLAINTS
69
50%
DEPARTMENT OF INSURANCE COMPLAINTS
17
100%
CLOSED LITIGATION (Company-wide)
16
100%
11
VII. FINDINGS
A. Claims Practices
The examiners reviewed the Company’s claim practices to determine its efficiency in
handling complaints, accuracy of payment, adherence to contract provisions and compli-
ance with Illinois laws and regulations.
1. Paid Individual Life Claims
A review of four (4) paid individual life claims produced one (1) criticism. Criticism
10 was issued to the Company. The Company failed to notify beneficiaries at the
time of claim of statutory interest provision as required by 215 ILCS 5/224(1)(l).
The median for payment was five (5) days.
2. Denied Individual Life Claims
A review of three (3) denied individual life claim files produced two (2) criticisms.
Criticism 3 was issued to the Company. The Company failed to provide the Notice of
Availability of the Department of Insurance on the denial letter for one (1) claim as
required by 50 Ill. Adm. Code 919.50(a)(1) and 919.40.
Criticism 4 was issued to the Company. The Company failed to provide the Notice of
Availability of the Department of Insurance on the delay letter for three (3) claims as
required by 50 Ill. Adm. Code 919.70(a)(2) and 919.40.
The median for denial was 10 days.
3. Paid Individual Life Waiver of Premium
A review of five (5) paid individual life waiver of premium claims produced no criti-
cisms.
The median for payment was 20 days.
4. Paid Individual Annuity
A review of 63 paid individual annuity claims produced three (3) criticisms. Criticism
12 was issued to the Company. The Company failed to notify the insured’s beneficiary
with a reasonable written explanation for the delay beyond 45 days for 15 claims as
required by 50 Ill. Adm. Code 919.70(a)(2).
Criticism 13 was issued to the Company. The Company failed to provide the Notice of
Availability of the Department of Insurance on the delay letter for seven (7) claims as
required by 50 Ill. Adm. Code 919.70(a)(2).
12
Criticism 14 was issued to the Company for 30 instances of failure to adopt reasonable
standards to fulfil contractual obligations when the Company was aware of a deceased
policyholder and did not contact the beneficiary on file to begin claims processing in
violation of prompt investigation under 215 ILCS 5/154.6 (c) (d).
The median for payment was one (1) day.
B. New Business
The examiners reviewed the Company’s new business issued, declination and withdrawn
practices to determine its compliance with Illinois laws and regulations.
1. Individual Life Issued
A review of 69 paid individual life policies issued produced no criticisms.
2. Individual Life Replacements Issued
A review of 45 individual life replacement policies issued produced no criticisms.
3. Individual Life Declined Applications
A review of 84 individual life declined applications produced no criticisms.
4. Individual Annuity Issued
A review of 58 individual annuity contracts issued produced one (1) criticism. Crit-
icism 5 was issued to the Company for failure to require a statement signed by the
agent and the applicant as to whether or not any existing life insurance or annuity
will be replaced as required by 50 Ill. Adm. Code 919.70(a) in three (3) contracts.
5. Individual Annuity Declined Applications
A review of 19 individual annuity declined applications produced no criticisms.
6. Individual Annuity Withdrawn
A review of 15 individual annuity withdrawn applications produced no criticisms.
C. Policyholder Services
1. Individual Life Cash Surrender
A review of 16 individual life cash surrender files produced no criticisms.
The median for surrender was three (3) days
13
2. Individual Annuity Cash Surrender
A review of 75 individual annuity cash surrender files produced no criticisms.
The median for surrender was two (2) days
D. Complaints and Litigation
A review of 139 consumer complaints produced no criticisms.
A review of 17 Illinois Department of Insurance complaints produced no criticisms.
A company-wide review of 16 closed litigation files produced no criticisms.
Docusign
Envelope
ID:
93A3F650-E784•4FCB•8B09-4BE2BS3DFBTD
IN
THE
MATTER
OF:
0
.____-_
PRUDENTIAL
INSURANCE
COMPANY
OF
AMERICA
PRUCO
LIFE
ENSURANCE
COMPANY
751
BROAD
STREET
NEWARK,
NJ
07102
STIPULATION
AND
CONSENT
ORDER
WHEREAS,
the
Director
of
the
Illinois
Department
of
Insurance
authorized
and
appointed
official
of
the
Slate
of
illinois.
having
authority
enforcement
of
the
insurance
laws
of
this
State;
and
(“Department”)
is
a
duly
and
responsibility
for
the
WHEREAS,
Prudential
Insurance
Company
of
America.
NAIC
68241.
and Pruco
Life
Insurance
Company,
NAIC
79227
(“the
Company”)
is
authorized
under
the
insurance
laws
of
this
State
and
by
the
Director
to
engage
in
the
business
of
soliciting,
selling
and
issuing
insurance
policies;
and
WHEREAS,
a
Market
Conduct
Examination
of
the
Company
was
conducted
by
a
duly
qualified
examiner
of
the
Department
pursuant
to
Sections
132.
401,402,403,
and
425
of
the
Illinois
Insurance
Code
(21
5
ILCS
5/132. 5/401.
5/402,
5/403,
and
5/425):
and
WHEREAS,
as
a
result
of
the
Market
Conduct
Examination,
the
Department
examiner
filed
a
Market
Conduct
Examination
Report
covering
the
examination
period
of
March
I,
2019
to
August
31,
2020,
which
is
an
official
document
of
the
Department;
and
WHEREAS,
the
Market
Conduct
Examination
Report
cited
varioLis
areas
in
which
the
Company
was
not
in
compliance
with
the
Illinois
Insurance
Code
(215
ILCS
5/1
et
seq.)
and
Department
Regulations
(50
III.
Adm.
Code
101
ci
seq.):
and
WHEREAS,
nothing
herein
contained,
nor
any
action
taken
by
the
Company
in
connection
with
this
Stipulation
and
Consent
Order,
shall
constitute,
or
be
construed
as,
an
admission
of
fault,
liability
or
wrongdoing
of
any
kind
whatsoever
by
the
Company;
and
WHEREAS,
the
Company
is
aware
of
and
understands
their
various
rights
in
connection
with
the
examination
and
report.
including
the
right
to
counsel,
notice,
hearing
and
appeal
under
Sections
132,
401,
402.
407,
and
407.2
of
the
Illinois
Insurance
Code
and
50
IlL
Adrn.
Code
2402;
and
WHEREAS,
the
Company
understands
and
agrees
that
by
entering
into
this
Stipulation
and
Consent
Order,
they
waive
any
and
all
rights
to
notice
and
hearing;
and
C)
D
N
xi
Docuslgn
Envelope
ID:
93A3F650-E7844FC6-6B09-4BE2BB3OFBTD
WHEREAS.
the
Company
and
the
Director,
for
the
purpose
of
resolving
all
matters
raised
by
the
report
and
in
order
to
avoid
any
further
administrative
action,
hereby
enter
into
this
Stipulation
and
Consent
Order.
NOW,
THEREFORE.
IT
TS
AGREED
by
and
between
the
Company
and
the
Director
as
follows:
I.
The
Market
Conduct
Examination
indicated
various
areas
in
which
the
Company
was
not
in
compliance
with
provisions
of
the
Illinois
Insurance
Code
and
Department
Regulations;
and
2.
The
Director
and
the
Company
consent
to
this
Order
requiring
the
Company
to
take
certain
actions
to
come
into
compliance
with
provisions
of
the
Illinois
Insurance
Code
and
Department
RegLilations.
THEREFORE,
IT
IS
HEREBY
ORDERED
by
the
undersigned
Director
that
the
Company
shall:
1.
Institute
and
maintain
policies
and
procedures
whereby
the
Company
shall
notilS’
beneficiary
at
time
ofclaim
of
statutory
interest
provision.
215
ILCS
5/224(1)0)
2.
Institute
and
maintain
policies
and
procedtires
whereby
the
Company
shall
provide
delay
letter
within
45
days.
Ill.
Admin
Code
919.70(a)(2)
3.
Institute
and
maintain
policies
and
procedures
whereby
the
Company
shall
provide
Notice
of
Availability
of
the
Department
of
Insurance
on
delay
letter.
Ill.
Admin.
Code
9l9.70(a)(2)
and
Ill.
Admin
Code
919.40.
4.
Institute
and
maintain
policies
and
procedures
whereby
the
Company
shall
adopt
reasonable
standards
to
fulfil
contractual
obligations
to
begin
the
claims
process
by
contacting
beneficiaries.
215
ILCS
5/154.6(c)(d)
5.
Institute
and
maintain
policies
and
procedures
whereby
the
Company
shall
provide
Notice
of
Availability
of
the
Department
of
Insurance
on
denial
letter.
Ill.
Admin.
Code
9l9.50(a)(I)
and
Ill.
Admin.
Code
919.40
6.
Submit
to
the
Director
of
Insurance,
State
of
Illinois,
proof
of
compliance
with
the
above
five
(5)
orders
within
thirty
(30)
days
of
execution
of
this
Order.
7.
Pay
to
the
Director
of
Insurance,
State
of
Illinois,
a
civil
forfeiture
in
the
amount
of
$44,055.00
to
be
paid
within
ten
(10)
days
of
execution
of
this
Order.
2
SCO HAGGER
VP, Operations
CY A MCVEIGH
3
May 13, 2022
