Prudential Life Insurance announced Wednesday that it would suspend sales of new insurance policies for 90 days, following the discovery of widespread financial misconduct involving current and former employees.
According to the company¡¯s news release, the suspension period, which is scheduled to begin on Monday, was determined based on the time required to swiftly implement priority reforms, including strengthening governance, conducting internal reviews and enhancing compliance training.
The voluntary halt comes after an internal investigation found that, between 1991 ¡ª just four years after the U.S. parent established the Japanese subsidiary in 1987 ¡ª and 2025, more than 100 current and former employees inappropriately received a total of about ?3.1 billion ($19.7 million) from approximately 500 customers. Of this amount, roughly ?2.3 billion has yet to be repaid.
The misconduct ranged widely, from fraud to personally borrowing money from clients. Sales staff solicited funds for investment products unrelated to the company¡¯s insurance business ¡ª including collapsed investment products, cryptocurrency that later became inaccessible, and factoring investments promising monthly returns.
Among the most serious cases disclosed was one that involved a former Tokyo-based sales employee in his 30s who, between 2017 and 2023, used application forms bearing the company¡¯s name to solicit investments in fictitious financial products, defrauding four customers of about ?53 million ($339,000).
In another case in Kumamoto Prefecture, a former employee in his 20s claimed there were ¡°employee-only shares¡± guaranteeing profits and principal protection, collecting roughly ?7.2 million from three customers.
During a preparatory phase through Sunday, sales representatives will be required to submit daily activity reports. For pending new applications, the head office will contact customers directly to confirm whether any inappropriate conduct by sales staff has occurred.
As part of management accountability, former President and CEO Kan Mabara stepped down and retired effective Sunday, with no advisory role to follow as previously planned.
The company said new President and CEO Hiromitsu Tokumaru will lead reforms aimed at rebuilding oversight, reshaping incentive structures and changing what it described as a performance-driven culture that failed to curb misconduct.
Parent company Prudential Holdings has pledged tighter supervision of its subsidiaries, while Prudential Life Insurance has established an independent, third-party customer compensation committee to ensure that affected customers are compensated fairly and promptly.
The sales suspension applies only to new policies; existing contracts, coverage and benefit payments will continue unchanged, and Prudential Life Insurance said it would provide income support to employees during the halt.
¡°We extend our deepest apologies to those affected, as well as to customers and all other stakeholders, for the significant inconvenience and concern caused,¡± the company said.
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