June 7, 1999

                   Prudential Has Paid $1 Billion
                   To Class-Action Policyholders

                   By DEBORAH LOHSE
                   Staff Reporter of THE WALL STREET JOURNAL

                   Prudential Insurance Co. of America has so far paid out more than $1
                   billion to some 250,000 policyholders, representing 40% of all eligible
                   claimants in a massive class-action settlement of lawsuits alleging past
                   deceptive sales practices.

                   Prudential has dispatched letters to all 650,000 or so claimants detailing
                   what they stand to get in the settlement, according to data through the end
                   of April that were recently provided to state insurance regulators and
                   others. Of the total, 134,421 -- or one in five -- qualified for the highest
                   level of relief -- a full refund with interest, or a paid-up policy. Another
                   64%, or 412,661, qualified for modified refunds or adjustments to their

                   But 12.6%, or nearly 81,000 claimants, have been told they probably
                   don't qualify for any relief, because they failed to prove they were misled
                   or that they were victims of the types of abuse the settlement was intended
                   to remedy, Prudential said. Such policyholders can still appeal their case in

                   The figures are the first public indication of how consumers are faring
                   under one of the nation's biggest -- and most controversial -- class-action

                   The lawsuits, originally filed in various federal courts and consolidated in
                   U.S. District Court in Prudential's hometown of Newark, N.J., alleged that
                   the company's agents in the 1980s and early 1990s fraudulently sold life
                   insurance to customers, sometimes by misleading them about what they
                   were buying or how long they would have to pay premiums, and
                   sometimes by raiding the customers' cash-rich older policies to finance the
                   new ones.

                   Critics, including lawyers for policyholders who didn't participate in the
                   settlement and some consumer groups, have long argued that the restitution
                   process is so cumbersome that many victims of the alleged deceptive
                   practices wouldn't benefit from the $2.6 billion that Prudential has
                   previously reserved for sales-practices-related payments.

                   But the settlement has survived various court challenges and has been ruled
                   fair to policyholders. The U.S. Supreme Court declined to rule on the
                   matter in January.

                   State insurance regulators say they continue to receive consumer
                   complaints about the slowness and complexity of the process, and many
                   individuals have stories of bureaucratic snafus. Many consumers are calling
                   about notices they find confusing or because they "are not comfortable
                   with the awards that they are getting," said Joanna Connolly, an assistant
                   attorney general for Massachusetts.

                   But regulators from two big states, New York and Florida, have backed
                   off threats, linked to earlier delays and snafus, to fine or even to try to
                   block Prudential's plan to convert to stock ownership from its current
                   status as a policyholder-owned company. However, "to say we are
                   satisfied would be a bit premature," said David Springer, who is
                   overseeing the process for Florida's insurance department.

                   Prudential said about 417,000 policyholders have officially selected among
                   the relief options, with nearly 48,000 others electing to use the program's
                   arbitration process to seek more relief. About 95,000 have not yet
                   responded to Prudential and indicated whether they will accept the
                   specified relief or appeal.