Insurance giant Prudential said Monday that it would suspend the sale of life insurance policies through Wells Fargo & Co. branches as it reviews how policies were sold by the San Francisco bank.
The move comes a week after three Prudential employees in New Jersey sued the insurer, saying they have been pressured to cover up evidence that Wells Fargo workers sold Prudential policies to customers who did not want them, using some of the same tactics employees used to sign customers up for unauthorized bank accounts.
In a statement Monday, the Newark, N.J.-based insurer said it was reviewing how its MyTerm policies were sold through Wells Fargo and has asked for the bank's cooperation in that probe.
"We stand behind the MyTerm product, but have decided to suspend sales of that product through Wells Fargo's retail banking franchise until we have all the facts about whether it is being distributed properly and in the best interest of customers," said Steve Pelletier, a Prudential executive vice president.
He said Prudential would cancel unwanted policies and reimburse any premiums paid for them.
Wells Fargo reached a $185 million settlement with regulators in September after bank employees were found to have created as many as 2 million unauthorized savings, checking and other accounts in order to meet onerous sales goals.
Bank spokesman Mark Folk said Monday that Wells Fargo is "deeply concerned" about the allegations in the Prudential employees' suit and that the bank is working with the insurance company to investigate potential problems.
"We take any allegations of improper sales practices seriously," Folk said in a statement.
