Anna Bradley-Smith  |  January 25, 2022

Category: Insurance

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Sign outside Prudential Financial office building
(Photo Credit: JHVEPhoto/Shutterstock)

Prudential, Tufts ERISA Class Action Lawsuit Overview:

  • Who: Prudential and Tufts University has been hit with an ERISA class action lawsuit.
  • Why: Barbara M. Parmenter, a Tufts University employee, accused the two, and 50 unnamed defendants, of illegally increasing the premiums on long-term insurance policies.
  • Where: The case is pending in the district court for Massachusetts.

Prudential and Tufts University raised insurance premiums on long-term plans without securing governmental approval, as promised, violating policy terms and hurting plan participants, a new class action lawsuit alleges.

Barbara M. Parmenter, a Tufts University employee, filed the class action against The Prudential Insurance Company of America, Tufts University and 50 unnamed defendants, alleging that they violated the Employee Retirement Income Security Act by raising premiums on her long-term plan without ensuring approval from the state.

She argues that Prudential sells the group long-term insurance plans nationwide, assuring that premium rates can only be increased if approved by the state of issuance’s “Commissioner of Insurance.”

However, in some states, such as her home state of Massachusetts, the Commissioner of Insurance has no approval authority over group long-term care insurance rates, making it impossible in unregulated states to receive approval authority over premium increases.

Prudential Plan Members Lose Coverage Due to ‘Illegal’ Premium Increases

Parmenter says that in January 2019, Prudential notified her that the group long-term care coverage she owned would be subject to a 40% rate increase effective May 1, 2019.

“This 2019 rate increase, and all similar unapproved rate increases nationwide, violate the ERISA welfare-plan terms when the plans state that premiums would only increase after approved by a state insurance commissioner in the state of issuance,” the lawsuit states.

In 2020, in response to a second “unapproved” rate increase, Parmenter took the non-forfeiture feature of her policy to avoid paying future premiums, in exchange for a greatly reduced maximum benefit under her policy, the class action states.

“She only exercised this option because of the continued illegal rate increases Prudential demanded from her to keep the policy in force,” according to the lawsuit. 

Parmenter says that she, and others in long-term plans in unregulated states, has been injured by Prudential’s conduct by paying premium increases that have not been approved by government regulators, allowing their policies to lapse for failing to pay premiums after charged with increases and exercising a nonforfeiture provision, substantially limiting the value of benefits under the policy.

“If Defendants had acted lawfully under ERISA and in accordance with the terms of the insurance contracts, Plaintiff and the Class members’ rates would not have experienced increased premiums or other losses,” the lawsuit states.

Parmenter is suing on behalf of anyone with a long-term insurance plan from Prudential in an unregulated state. She seeks certification of the class, enjoinment, damages, equitable relief, legal costs and fees and a jury trial.

In 2018, Prudential had to pay $9 million to resolve a class action lawsuit involving more than 6,000 individuals who had issues with the life insurance payouts provided by Prudential. While Prudential denied the claims in the underlying lawsuit, they agreed to the $9 million class action settlement deal brought under the Employee Retirement Income Security Act.

Do you have insurance with Prudential? Let us know in the comments section below!

Parmenter is represented by Sean K. Collins of Law Offices of Sean K. Collins and Jonathan M. Feigenbaum of Law Offices of Jonathan M. Feigenbaum.

The Prudential Long-term Plan ERISA Class Action Lawsuit is Parmenter v. The Prudential Insurance Company of America, et al., Case No. 1:22-cv-10079, in the U.S. District Court for the District of Massachusetts


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6 thoughts onPrudential, Tufts University Class Action Claims Duo Illegally Increased Premiums on Long-Term Insurance Policies

  1. Elsa Manzo says:

    My husband had life insurance and long term disability thru his employer, when my husband passed prudential refused to pay his life insurance

  2. Marcia Slaminsky says:

    I have a Prudential Long-Term Care Policy from my employer. I cancelled the policy at the end of 2019 because of the rate increase. I’ve been told by Prudential that I have a zero balance, but do have the invested amount for nursing home care and home care (if it meets their restrictive standards). What can I do? I really want my thousands back!

  3. Carolyn says:

    I have long term care through prudential

  4. Heather says:

    Add me

  5. L. Love says:

    I had 4 Prudential Polices. They cancelled 1 during a grace period without have a 2nd person to contact. My son died after this and some 20 years later I received a 3k check form a insurance company that I had no knowledge of.

  6. Stephanie Smith says:

    Please add me

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