In the wake of the dishonest life-insurance selling of the '80s and early '90s, several insurers settled class-action lawsuits-- among them, New York Life, John Hancock, Transamerica Occidental Life and Prudential Life. A plan for Metropolitan Life is up for approval now.

The insurers are offering bilked consumers various forms of financial relief. But some people still think they're getting a raw deal. In particular, I've been hearing about Prudential Life.

A group of current and former Prudential employees in Plymouth, Minn., have stepped forward to say that the unhappy policyholders may be right. In affidavits filed in U.S. District Court in New Jersey (which is overseeing restitution), they allege that Prudential manipulated the process to limit what consumers get.

Florida Insurance Commissioner Bill Nelson says an ex-employee who worked at Pru's Jacksonville center claims the same thing was happening there.

A number of the whistleblowers are filing lawsuits in Minnesota, charging that Pru retaliated against them for speaking out at work, says their Minneapolis attorney Fred Neff. Pru rejects any blame. "We have reviewed the allegations and found no evidence to substantiate the charges," spokesman Robert DeFillippo says.

The mis-selling at Pru and other insurers depended on telling one of three big lies:

* Lie No. 1: "I'm selling you an investment, for college or retirement." Fact: It's a life insurance policy. Part of your "investment" goes for insurance that you might not need.

* Lie No. 2: "I can get you more insurance than you currently have, at little or no cost." Fact: The insurer uses your older policy's dividends and cash value to purchase the additional coverage. When the older policy runs out of cash, you have to pay much higher premiums out of pocket or your coverage will lapse.

* Lie No. 3: "You'll have to pay premiums only for a limited number of years." Fact: If interest rates drop, you'll have to pay for many more years than the agent said.

About 640,000 Pru policyholders said they were victims of these whoppers. Pru reviewed their written claims and gave each one a score.

High scorers were entitled to full restitution--their money back or their policy restored. Lower scorers were offered partial restitution. Those who objected to their score could appeal their case. Pru supplied a lawyer for free.

Here's where the whistleblowers come in. They charge, among other things, that employees were pushed to give people lower scores and instructed to leave out certain policies when evaluating claims.

Again, Pru's DeFillippo objects. "Safeguards made it virtually impossible for the process to produce anything but fair and equitable reviews," he says.

I've heard from consumers who say they saw these practices from the other side. Carmella Catrino, 59, of Edison, N.J., has tried for three years to get a key policy included in her claim--the one on which she lost the most. Joan Parks, 55, of Auburn, N.Y., got a written offer containing worse terms than she agreed to verbally.

I can't judge these complaints, and Pru won't comment on them. Laurence Gerowitz, an attorney for the policyholders, says he sees many scores that don't reflect the evidence in the files. Still, Gerowitz thinks the appeals are fair. Around 75 percent of his cases have gotten a higher score, he says.

For many Pru policyholders, the system worked. They got the payback or coverage they wanted. The question is, how many didn't, and was that deliberate or an oversight? Both Pru and Milberg, Weiss--the law firm that won the class-action settlement--asked for and won court permission to investigate.

Pru has already declared itself clean, before even hearing testimony. Paul DeAngelo, assistant insurance commissioner in New Jersey (Pru's home state), also says he expects to find that the safeguards are sufficient.

As for top Milberg, Weiss lawyer Mel Weiss, he's investigating the system he himself put in place. "We won't tolerate wrongdoing," Weiss says. The firm he picked to monitor Pru did find some problems during the process and made repairs.

Weiss also created the next big restitution program coming up: that of MetLife. But to duck the high cost of appeals that Prudential bore, MetLife will generally allow no appeals. Policyholders will have to take whatever they get. Weiss thinks the offers will be fair, because they'll be handled by an independent group.

Mass justice, however dispensed, requires good faith. Whether Pru passed the test and MetLife succeeds remain to be seen.