The Prudential Insurance Co. of America has agreed to pay up to $1 billion to as many as 10.7 million customers for failing to stop widespread sales abuses by its agents.

The company also will pay a record $35 million fine if all 50 states sign the restitution plan, Elizabeth Randall, New Jersey's banking and insurance commissioner, said Tuesday.The plan, including refunds and opportunities for new coverage, could cost Prudential as little as $100 million, but a report from a multi-state task force estimated the cost could reach $1 billion.

Prudential Chairman Arthur F. Ryan, who came to the company after the investment scandals surfaced, said the insurer would make sure the problems never happen again.

"The improper practices cited by the task force are intolerable," Ryan said. "We apologize to our policy owners who may have been misled."

The negative publicity could also harm sales, something that led Wall Street credit agencies to place Prudential under close scrutiny.

The task force's report on deceptive sales practices, including misleading consumers about the cost of policies, did not recommend any action against top Prudential executives. But it said management knew of sales abuses by agents and routinely failed to investigate and impose effective discipline.

"Consumers put their confidence, and their money, into Prudential, and some of the company's agents misled them," Randall said.

The review focused on accusations of "churning," in which agents persuade customers to use the built-up cash value of older life-insurance policies to finance more expensive ones. The report said agents took advantage of customers who were ill-informed or deceived about the cost of the transaction.

The report said Prudential will contact policyholders who bought permanent individual life insurance contracts from 1982 to 1995.

These people will be able to apply for preferred-rate loans or buy more life insurance or annuities, officials said. The plan also allows them to seek greater compensation, which could include repayment of premiums, depending on an agent's complaint history or a policyholder's proof of misrepresentations.

Individuals also can sue Prudential. But the task force said its proposal "should provide faster relief to consumers."