NEWARK, N.J. (AP) _ Prudential Insurance Co. of America has agreed to pay a record fine exceeding $20 million and create a multimillion-dollar restitution plan to help settle complaints it misled policyholders, officials said Friday.

``We think it's a good deal,'' said John Calagna, spokesman for the New York Insurance Department. ``We had to find out what the problem was on the issue of churning and come with a plan that makes consumers whole and we think this does.''

Calagna refused to say how much the Newark-based company would be fined by a multistate group of regulators investigating Prudential's practices, but The Wall Street Journal placed the amount at $35 million.

Citing unidentified sources, the newspaper said the regulators' report will contend sales abuses were more widespread than the nation's largest life insurer has acknowledged and that the company could have done more to stop them.

Executives previously have acknowledged only instances of wrongdoing by individual agents and managers, saying such instances violated the policy of the Newark-based company.

Calagna refused to comment on the specifics of the report, which will be made public next week, but said the fine would be more than the current record $20 million paid by Metropolitan Life Insurance Co. two years ago. Calagna also refused to discuss specifics of the restitution plan.

Prudential spokesman Bob DeFillippo also would not comment on the specifics of the report, but said, ``We believe we're responding with a commitment to resolve our policyholders' concerns.''

The probe's focus has been a practice called ``churning'' in which agents persuade customers to use the built-up cash value of older policies to finance new, more expensive ones.

Regulators and lawyers for individuals suing Prudential contend that agents took advantage of customers who were ill-informed or deceived about the cost of the transaction and the extent to which it harms the older policy.

Regulators are expected to cite ``extensive failures'' of Prudential management to deal with ``widespread'' abuses,'' The Wall Street Journal reported, citing a person familiar with the task force's work.

Prudential has said it is cooperating with the task force.

Under a new chairman since 1994, the company installed new senior managers in its life-insurance unit last year, while firing nearly 1,000 agents and managers and revamping sales and compliance processes.

The Journal reported today that the report would call for Prudential to notify 11 million policyholders of possible eligibility for a restitution program.

The newspaper previously reported Prudential believes it would pay between $280 million and $1 billion to reimburse customers with evidence they were wronged.

Prudential also faces dozens of lawsuits filed by angry consumers and former employees who maintain they were fired for reporting abuses.

New Jersey's Insurance Department is heading the probe. Officials there did not immediately return a telephone message today.