Prudential Life Insurance Company, Ltd. (Prudential of Japan) will pause new sales for 90 days as it responds to a series of monetary misconduct cases involving current and former sales employees. The voluntary suspension of new sales at Prudential of Japan will start on Feb. 9, the company and its US-based parent, Prudential Financial, Inc., said.
Prudential of Japan said the temporary halt in new sales is intended to support the implementation of “comprehensive operational, organisational, and governance changes” linked to previously disclosed employee misconduct, including inappropriate investment solicitations directed at both policyholders and non-policyholders. As part of its response, the insurer plans to introduce an independent customer reimbursement framework and other measures to address customer losses and trust concerns.
“I would like to deeply apologise for the harm this matter has caused to our customers and stakeholders. The decision to enter into a voluntary suspension of new sales activity is an important step to rebuild trust and implement necessary changes to our organisation,” Hiromitsu Tokumaru, president and chief executive officer of Prudential of Japan, said. In January 2026, Prudential of Japan reported the results of an internal investigation and announced measures including reimbursement for impacted customers, a restructuring of sales incentive compensation, and tighter oversight of sales practices, governance, and risk management. The firm also committed to higher standards for employee training, education, and recruitment.
The internal review was supported by a “customer confirmation” initiative that began in August 2024. Prudential of Japan contacted customers through letters, telephone calls, emails, newspaper notices, and its website to ask whether they had experienced questionable monetary dealings with current or former employees. By February 2025, the company had sent about 2.09 million letters, made about 130,000 calls, and planned to send about 700,000 emails, in addition to placing notices in 40 national, regional, and local newspapers and posting alerts online. Customers who responded were contacted individually by a head office department, which then carried out fact-finding with the employees concerned.
Through this process, Prudential of Japan confirmed three cases in which former sales employees engaged in improper handling of money related to its systems or life insurance operations, affecting eight customers with total losses of about ¥60 million. The company said it is verifying each case and proceeding with compensation. In one Tokyo case, a former sales employee in his 30s used Prudential application documents and papers bearing the company name to solicit multiple customers to invest in a fictitious financial product. Four customers lost roughly ¥53 million. Prudential said it has compensated those customers under employer liability and will seek recovery from the former employee. The company has also cooperated with police.
In Kumamoto Prefecture, a former male sales employee in his 20s received about ¥7.2 million from three customers by invoking Prudential’s employee stock ownership plan and claiming there were “stocks that only employees can buy, guaranteeing absolute profit and principal security.” The former employee has repaid two of the three customers; Prudential said it will address the remaining case based on confirmed facts and has coordinated with law enforcement. A third case in Tokyo involved a former sales employee in his 50s who advanced premiums that a customer was supposed to pay and later collected more than the amount he had advanced. Prudential compensated affected customers and plans to seek reimbursement from the former employee.
Separately, Prudential of Japan reported that 106 current and former employees engaged in inappropriate monetary conduct unrelated to its systems or life insurance products, such as soliciting customer investments in external schemes or borrowing money from customers. The total amount received during and after employment was around ¥3.08 billion, with net exposure of about ¥2.29 billion after partial refunds. The company also confirmed that 69 current and former employees had introduced unapproved investment products and firms to roughly 240 customers, leading to customer payments of about ¥970 million during employment and ¥340 million after resignation. Employees did not directly receive these funds, but Prudential said it imposed disciplinary measures for violations of internal rules.
The response is accompanied by management changes in Japan. Effective Feb. 1, Kan Mabara resigned as president and CEO of Prudential of Japan “to clarify management responsibility.” He has been succeeded by Tokumaru, previously president and CEO of Prudential Gibraltar Financial Life Insurance Co., Ltd. Tokumaru has more than 20 years of experience in insurance administration and sales management and has newly joined the management of Prudential of Japan. The company said he had not been involved in the management of Prudential of Japan prior to his appointment. At the holding company level, Prudential Holdings of Japan, Inc. changed leadership in October 2025, when its chairman and CEO resigned and Bradford O. Hearn was appointed president and CEO.
Under a special project launched in December 2024, Prudential of Japan, overseen by Prudential Holdings of Japan, examined significant cases individually, reviewed risks embedded in its sales model, and assessed its control framework. The company concluded that gaps in sales supervision and incentive design contributed to the misconduct. It cited limited day‑to‑day monitoring of sales activities by managers and head office, close relationships between sales employees and customers, and a compensation structure closely tied to performance, which could encourage behaviours such as advancing premiums or seeking loans from customers.
Prudential of Japan also pointed to weaknesses in overall management and supervision, including limited board-level discussion of risks inherent in the business model, partial implementation of a three-lines-of-defence structure, and unclear allocation of responsibilities between first and second lines. It said a culture that placed strong emphasis on high-producing sales staff and treated the founding business model as a given made it difficult to pursue fundamental changes.
To address these findings, Prudential of Japan has outlined a set of measures to prevent recurrence, under the supervision of the holding company. On the sales side, the insurer plans to overhaul the compensation system for both sales employees and sales managers, repositioning incentives so that compliance and after-sales service are reflected alongside new business. Criteria for qualification, awards, and promotion will be revised so that conduct and customer follow-up carry greater weight.
The company intends to strengthen monitoring of sales activities by requiring more detailed reporting of when, where, to whom, and how sales contacts occur, with managers responsible for review and follow-up. Results will be reflected in compensation and awards. Prudential also plans more direct contact with customers by personnel other than the responsible sales agent, with the aim of identifying potential issues earlier.
The recruitment process is being tightened to emphasise ethics and suitability for work in a financial institution, with revised hiring criteria and greater use of external agencies and head office involvement. Education and training programmes will be updated to address inappropriate investment solicitations and related risks, with revised content and delivery methods. At the governance level, Prudential of Japan is revising its risk appetite framework to clarify recognition of risks tied to its business model, expanding compliance and risk training for management, and adjusting executive roles and evaluations. The composition and operation of the board and executive officers’ meeting are being reviewed to support more focused discussion of key management topics.
The company is also reinforcing its three-lines-of-defence framework, including changes to compliance risk management within the sales organisation, improved information flows between branches and head office, the establishment of a Sales Management Headquarters as an intermediate “1.5 line,” and clearer allocation of authority and responsibilities across lines. From a cultural perspective, Prudential of Japan plans to reassess long-standing assumptions about its business model and the status of top producers, tracking progress through surveys and other feedback tools and revising measures as needed. Prudential of Japan and Prudential Holdings of Japan said they will continue to cooperate with police and relevant authorities, apply disciplinary measures to those involved, and “work as a unified team to restore trust from our customers, stakeholders, and society.”
