Deal Ends Prudential Showdown Senn Reworks Settlement To Satisfy West’s Objections

Prudential Insurance Co. of America has agreed to pay in full a $700,000 fine to Washington, in the process ending a standoff between the state’s insurance commissioner and a leading legislator from Spokane.

Commissioner Deborah Senn announced the settlement Wednesday, three weeks after an earlier version provoked a dust-up with Sen. Jim West that eventually involved Attorney General Christine Gregoire.

Senn and Gregoire are Democrats. West is a Republican who chairs the Senate Ways and Means Committee.

Last month, Senn announced a settlement with Prudential calling for a $700,000 fine, with all but $100,000 suspended. The balance was to be dedicated to the distribution by her office of information related to abusive insurance sales practices by Prudential agents.

Washington residents will be entitled to about $20 million in mostly non-cash relief as a result of the deal.

But West challenged the arrangement on grounds that Senn had no authority to use fine money that should be paid into the state’s general fund to support four staff positions that would be created to handle Prudential-related business.

Agencies could become overaggressive if allowed to pocket fines, he said. Also, such deals provide an avenue for bypassing legislative oversight.

In retaliation, West said he would deduct the portion of the fine kept by Senn from her budget, which totals about $19.5 million over two years.

The new agreement with Prudential calls for another $600,000 to cover enforcement costs.

Wednesday, West said he was satisfied that his concerns had been met.

“She’s done what she should have done in the first place,” he said.

West said Senn can tap the additional enforcement funds set aside by Prudential by either submitting an amended budget or charging the insurer for the oversight.

“She had the authority to assess them anyway,” he said.

Senn, who has insisted her actions were sanctioned by an opinion from the Attorney General’s Office - despite denials from state legal officials - said Wednesday she would await guidance from West before deciding how to pay for monitoring the Prudential agreement.

“We’ve got $600,000 on the table for oversight,” she said. “The ball’s in his court.”

Senn said Prudential swallowed the additional costs because officials are anxious to salve what has become a huge black eye that could cost it more than $1 billion nationally.

A federal judge in New Jersey last week approved a class-action settlement that includes the Washington deal. A total of 8 million policyholders were involved.

, DataTimes