By James Langton

(December 18 – 12:50 ET) – On the same day that it was revealed that the Prudential Insurance Company of America has dumped its 160-person investment banking team, the company has also announced a plan to go public.

Prudential’s board of directors has unanimously adopted a plan of reorganization, which provides the framework for converting from a mutual structure to stock ownership. The plan will be submitted to the New Jersey Department of Banking and Insurance early next year.

“It could give new meaning to your piece of the Rock,” says the firm, in a play on its familiar tagline. “We are proud of the careful work and consideration that has gone into our plan,” said Prudential’s chairman and CEO Arthur Ryan.

“It accomplishes what we set out to do which was to design a framework that distributes the value of the company to our policyholders in a fair and equitable manner. Prudential’s mutual status has served the company and its policyholders well for many years. But the financial services industry has changed. By converting to a stock company, Prudential will be able to better meet customer demands in a constantly changing marketplace.,” Ryan added.

Once the N.J. commissioner deems the application complete, voting materials will be mailed to approximately 11 million eligible policyholders. Eligible policies that were in force on December 15 will be entitled to receive stock, cash or policy credits in the demutualization. The conversion must be approved by at least two-thirds of those who vote. Voting will be available by mail, Internet, telephone, or in person at a special policyholder meeting.

Prudential has more than US$363 billion in assets under management as of December 31, 1999, making it one of the largest financial services institutions in the world.

To put this perspective, the entire Canadian mutual fund industry has about $409 billion under management, or around US$268 billion.