Kaye Scholer Advises California State Controller on Settlement with Prudential for Unpaid Death Benefits
January 13, 2012
Kaye Scholer was retained to represent the California State Controller’s Office in the Controller’s efforts to pursue and resolve disputes between the State and numerous life insurance companies that have failed to turn over death benefits to beneficiaries, despite the fact that the policyholder is deceased and the statutory dormancy period has run.
After months of negotiations California State Controller John Chiang today announced a major multi-state settlement with Prudential Insurance Company of America, which, depending on the completion of the audit, may return up to $20 million to the families of deceased life insurance policyholders in California.
Retained by the Controller in July 2011 to assist with claims relating to unpaid death benefits, Kaye Scholer facilitated the settlement negotiations with Prudential, which 19 other states subsequently joined. Given the substantial amount of funds owed to the State, Kaye Scholer continues to identify potential litigation targets to the extent other insurance providers refuse to comply with the audit of the unclaimed property on their books, and currently is negotiating with a number of other insurance companies which would prefer not to face litigation.
The lawyers advising the Controller are Kaye Scholer restructuring partner Marc Cohen in Los Angeles and litigation partner Steven Rosenthal in Washington DC.
Cohen and Rosenthal previously advised Controller Chiang in 2010, when Governor Schwarzenegger’s demanded the Controller to comply with Governor Arnold Schwarzenegger’s order to decrease all state employees salary to the federal minimum of $7.25 per hour until the budget was enacted. In that matter, the Sacramento County Superior Court found in favor of Kaye Scholer’s client, finding that the Governor’s order was essentially impossible to implement and unfair. The case was ultimately dismissed.
