Voluntary Sales Suspension Implemented
Prudential Life Insurance Company, Ltd., known as Prudential of Japan (POJ), and its parent company, Prudential Financial, Inc., have announced a voluntary 90-day suspension of new sales activity in Japan. The suspension is set to begin on February 9, 2026, and aims to facilitate comprehensive operational, organizational, and governance changes within the company.
The decision comes after an internal investigation revealed instances of employee misconduct, primarily involving inappropriate investment solicitations. Hiromitsu Tokumaru, President and Chief Executive Officer of Prudential of Japan, stated that the suspension is 'an important step to rebuild trust and implement necessary changes to our organization,' and offered a deep apology for the harm caused to customers and stakeholders.
Details of Employee Misconduct
The internal probe, whose findings were announced in January 2026, uncovered that more than 100 former employees of Prudential's Japanese unit engaged in improper investment solicitation practices. This misconduct resulted in losses exceeding ¥3.1 billion (approximately $19.9 million) for around 500 customers. The inappropriate actions included offering fictitious investment products, borrowing money directly from clients, and misusing company application forms and documents.
Reports indicate that some of these practices date back to 1991, with a 'customer confirmation' program launched in August 2024 helping to identify suspicious monetary dealings. The company acknowledged that its performance-based compensation system and a lack of sufficient oversight contributed to an environment where such misconduct could occur.
Corrective Actions and Leadership Changes
In response to the findings, Prudential of Japan is implementing a series of corrective measures. These include:
- Establishing an independent customer reimbursement program to compensate affected individuals.
- Restructuring employee incentive compensation to prioritize compliance and customer service over new contract volumes.
- Strengthening oversight of sales practices, governance, and risk management frameworks.
- Enhancing education, training, and recruitment standards for employees.
Leadership changes have also been enacted. Kan Mabara stepped down as President and CEO of Prudential Life Insurance effective February 1, 2026, to take management responsibility. He has been succeeded by Hiromitsu Tokumaru, who previously served as President and CEO of Prudential Gibraltar Financial Life. Andy Sullivan, CEO of Prudential Financial, emphasized the company's commitment to 'doing right by our customers' and addressing the identified compliance, operational, and governance issues.
Commitment to Restoring Trust
The 90-day suspension is intended to provide the necessary time and space for Prudential of Japan to execute these reforms effectively and focus on repairing relationships with its customers. The company has affirmed that support for existing customers and servicing of in-force policies will not be impacted by the suspension. Rebuilding customer trust is a top priority for the firm's Japanese operations.
3 Comments
Raphael
Prioritizing customer trust over immediate sales is a strong move. Hopefully, this sets a new standard.
Michelangelo
Compensating affected customers and restructuring incentives shows real commitment to change. This is positive.
Leonardo
Restructuring incentives and enhancing training are good moves to prevent future issues. However, the sheer scale of the financial losses and the number of customers affected means regaining public confidence will be an uphill battle, even with these reforms.