Prudential Life Insurance Co. Ltd. president and CEO Kan Mabara has issued a public apology in Tokyo over monetary misconduct by more than 100 current and former employees, as the Japan life insurer announces customer compensation measures, leadership changes, and a review of its sales and governance arrangements. “I apologise from the bottom of my heart for causing great anxiety and inconvenience,” Mabara told reporters at a Jan. 23 news conference, referring to improper investment solicitations and other money-related practices involving Prudential Life’s sales force, as reported by Nippon. Mabara said the company’s corporate culture and performance-linked pay structure contributed to the incidents. He added that the insurer would “give top priority to protecting victims” when determining redress and pledged to fully compensate losses in cases recognised by a planned external expert panel.
The issues emerged through a “customer confirmation” program launched in August 2024, under which Prudential Life contacted existing and former customers to ask about suspicious monetary dealings with its employees. The internal review identified three former sales employees who engaged in monetary fraud or other inappropriate handling of funds directly linked to Prudential Life’s systems or life insurance operations. Eight customers were affected in those cases, with total damages of about ¥60 million. In one case at the Shiodome branch in Tokyo, a former sales employee in his 30s solicited money from multiple customers between May 2017 and December 2023 by promoting a fictitious financial product and using Prudential Life application forms and documents bearing the company name. Four customers lost about ¥53 million. Prudential Life has compensated those four customers based on employer liability and plans to seek recovery from the former employee, while coordinating with police.
In Kumamoto Prefecture, a former sales representative in his 20s used the name of Prudential Life’s employee stock ownership plan to collect funds, telling customers there were “stocks that only employees can buy, guaranteeing absolute profit and principal security, so please entrust me with your money.” Three customers lost around ¥7.2 million. The former employee has repaid two of them; Prudential Life said it will address the remaining case based on verified facts and has also worked with law enforcement. A third case in the Tokyo metropolitan area involved a former sales employee in his 50s who advanced insurance premiums on a customer’s behalf over an extended period and later collected more than the total advanced amount. The excess was about ¥25,000 per person. The company has reimbursed affected customers and intends to seek repayment from the former employee.
Beyond those three cases, Prudential Life’s review found that 106 current and former employees had engaged in inappropriate monetary conduct not directly tied to the insurer’s products. These activities included soliciting customers to invest in products unrelated to Prudential Life and borrowing money from customers in breach of internal rules. The company said these employees received about ¥1.63 billion from customers while employed and about ¥1.45 billion after leaving the firm, totalling roughly ¥3.08 billion involving 498 customers.
Separately, 69 current and former employees were found to have introduced customers to investment products and firms not approved under Prudential Life’s internal rules, without personally receiving customer funds in those instances. Customers paid about ¥970 million to those entities during the employees’ tenure and about ¥340 million after their resignation. About ¥250 million has been refunded by the investment providers, according to the company. Prudential Life stated that it does not sell financial products other than life insurance products and services it has approved internally, and that employees are prohibited from personal investment solicitation and from borrowing from customers. It has asked customers to be cautious about suspicious investment offers and to contact its service centre if they have concerns.
The misconduct findings have resulted in leadership changes at Prudential Life and at its parent, Prudential Holdings of Japan Inc. Prudential Life said Mabara will step down as president and CEO on Feb. 1 to clarify management responsibility. He will be succeeded by Hiromitsu Tokumaru, currently president and CEO of Prudential Gibraltar Financial Life Insurance Co. Ltd. Tokumaru has more than two decades of experience in insurance administration and sales management and has led Prudential Gibraltar Financial Life since July 2022. The holding company said he has joined Prudential Life’s management to oversee changes at the company. At the holding company level, the changes at Prudential Life follow the resignation of the chairman and CEO on Oct. 6, 2025, and the appointment of Bradford O. Hearn as president and CEO. Prudential Holdings of Japan described the measures at Prudential Life as part of broader changes at the group and said it will “fully fulfill our duties in supervising and managing our subsidiaries.”
A special project team formed in December 2024 under Mabara’s leadership, and overseen by the holding company, reviewed individual cases and assessed risks in Prudential Life’s business model. According to the company, the assessment found that sales managers did not consistently supervise field activities, allowing some representatives to use close relationships with customers to solicit investments or seek loans. Checks by head office on branch-level behaviour were limited. A compensation system closely tied to new production was also cited, with income volatility for sales staff contributing to incentives to seek funds from customers or to advance premiums improperly.
At the governance level, the company said its board and executive committees did not sufficiently examine the risks associated with its long-standing model, and that the three-lines-of-defence framework was not fully established. Roles between first and second lines were sometimes unclear, and frontline ownership of compliance was limited. Internally, a culture that placed strong emphasis on high-performing salespeople and on the existing model made it difficult to question structural issues or to introduce major changes.
In response, Prudential Life has set out a series of measures covering sales practices, governance structures, and organisational culture. On sales, the company plans to revise its compensation system for sales representatives and managers to increase the weight of compliance, after-sales service, and customer follow-up relative to new contract volumes. Criteria for qualifications, awards, and promotions will be adjusted on the same basis.
Prudential Life also intends to increase oversight of sales activities by requiring more detailed recording and reporting of customer interactions and by linking adherence to these processes with rewards and recognition. The company plans to expand direct contact with customers through head office and non-sales staff to check for potential issues. Recruitment processes are being changed to place more emphasis on ethical suitability for financial institution roles, with greater involvement from headquarters and external agencies. Training programs on investment solicitation, monetary handling, and compliance are being updated for the sales force.
From a governance standpoint, Prudential Life plans to revise its risk appetite framework to reflect risks in its business model, provide additional compliance and risk training for senior management, and adjust board and executive meeting practices to increase time spent on conduct and business model risks. The three-lines-of-defence framework will be clarified and strengthened, including a sales management headquarters function and clearer allocations of roles and responsibilities. Prudential Life and Prudential Holdings of Japan have said they will continue implementing these measures under the new management team and have stated that the steps are intended to address the misconduct and respond to concerns from customers, regulators, and other stakeholders in Japan and the wider region.
