Prudential Financial reached a $100 million settlement to resolve U.S. Federal Trade Commission civil charges that its Assurance IQ unit misled consumers into buying healthcare plans that did not provide the promised coverage.
A settlement with Assurance, which Prudential shut down last year, was filed on Wednesday in federal court in Seattle.
Assurance was accused of misleading consumers needing low-cost insurance, both online and in telemarketing, into believing its plans provided comprehensive coverage and essential health benefits of the sort provided under the Affordable Care Act.
The FTC said Assurance claimed its plans would substantially lower medical bills but failed to disclose significant coverage and benefits restrictions, “leaving consumers exposed to unexpected and significant out-of-pocket healthcare expenses.”
Assurance did not admit or deny wrongdoing.
In a statement, Prudential said it was pleased to settle so it could focus on its core businesses, and said it has already recognized the payout in its financials.
“We take legal and regulatory compliance very seriously, and we are focused on doing business the right way to benefit our customers,” the Newark, New Jersey-based company said.
Prudential bought Assurance IQ for $2.35 billion in 2019, three years after the startup was founded in Bellevue, Washington, a Seattle suburb.
At the time, Prudential said Assurance’s direct-to-consumer platform would reach an under-served mass market for health services, including an estimated 17 million customers needing insurance.
Prudential decided to wind down Assurance in early 2024, after taking $2.14 billion of goodwill writedowns in the three previous years.
The case is FTC v Assurance IQ LLC, U.S. District Court, Western District of Washington, No. 25-01485.
(Reporting by Stempel in New York; Editing by Chris Reese and Leslie Adler)
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