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University of South Carolina to distribute life insurance payouts

09/15/11

When Prudential changed its ownership from a mutual company to a stock-based company, the University of South Carolina, which used a group Prudential life insurance policy for its employees, received a substantial amount of Prudential's stock. USC subsequently sold the stock for $4.9 million, funds the policy-holders disputed the ownership of, according to the South Carolina State.

According to the source, 1,771 USC employees with life insurance policies claimed that because they had paid premiums on the policy, they were entitled to shares of the stock, and thereby the $4.9 million. The university reviewed the transaction, and although it maintained its rightful ownership of the funds, it agreed to distribute the funds among the employees.

The funds were due to be dispersed in January 2011, but a lack of clarity regarding taxes on the payments caused significant delays. USC says it will mail checks, for amounts between $50 and $8,000, to employees by the end of September.

According to a LIMRA study, 56 percent of workers in the United States subscribed to a group life insurance policy through their employer in 2010, an 8 percent increase from 2004.

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