The New Jersey Department of Banking and Insurance is investigating Prudential Financial Inc. for its role in the alleged Wells Fargo sales fraud issue.
"The department is taking this matter very seriously and is investigating," department spokesman Marshall McKnight said in response to a question on the matter.
The investigation follows allegations that Wells Fargo’s sales tactics with credit card accounts also involved sales of Prudential life insurance policies, called MyTerm life. The MyTerm product has been made available to Wells Fargo customers through self-service kiosks in the company's bank branches or through the Wells Fargo website since the middle of 2014, according to Prudential.
Prudential is being sued by three former managers who claim some of the insurance company's customers did not know they were signed up for policies. Prudential sells some products through Wells Fargo & Co., and an internal review allegedly revealed that certain clients were signed up for policies through the bank's fake-account creation practice.
Scot Hoffman, a spokesman for Prudential, said this past weekend that Prudential continues to look into the policies sold through Wells Fargo, and, once done, will review the matter with regulators.
"Prudential has acted responsibly and proactively since we initiated our distribution relationship of MyTerm with Wells Fargo," Hoffman said in an emailed statement Dec. 10. "We reached out to customers and received feedback last year about the customer experience that raised questions for us about product lapse rates. This prompted our business to reach out to Wells Fargo and monitor these trends more closely."
Asked about the New Jersey investigation, Hoffman said Dec. 12: "We are in active discussions with the New Jersey Department of Insurance about our review of the distribution of the MyTerm product through Wells Fargo, and we are responding to their requests for additional information."
There is a chance, if the sales issues involve other states, that the matter could be taken up by members of the National Association of Insurance Commissioners.