Financial Services Agency orders Prudential Life to halt new sales for about three months
In short
Japan's Financial Services Agency on October 9 ordered Prudential Life Insurance to suspend part of its business, including new insurance contracts, for about three months after its employees defrauded customers of large sums of money. The agency also ordered management to clarify its responsibility, according to the Asahi Shimbun and NHK. Group company Gibraltar Life Insurance received a similar suspension, and the parent company received a business improvement order, the Asahi Shimbun reported.
Read the full story 1 min read
Japan's Financial Services Agency on October 9 issued a business suspension order to Prudential Life Insurance under the Insurance Business Act, halting new contracts for insurance products and other business for about three months, the Asahi Shimbun reported. NHK said the order suspends new insurance solicitation for about three months and also orders the company to clarify management responsibility. The action follows a case in which Prudential Life employees defrauded customers of large sums of money, both outlets reported. [ 1 , 3 ]
According to the Asahi Shimbun, the agency also issued a suspension order of about three months to Gibraltar Life Insurance, a group company where similar money-related misconduct occurred. Parent company Prudential Holding of Japan received a business improvement order under the Insurance Business Act, on grounds including deficiencies in its system for managing subsidiaries. [ 1 ]
The Asahi Shimbun reported that on October 8 Prudential Life announced that management, including President Hiromitsu Tokumaru (得丸博充), would voluntarily return 30% of their monthly pay for three months. The company also said it would address the responsibility of current and past management after hearing the opinions of experts. [ 1 ]
The agency carried out an on-site inspection of Prudential Life in January and later extended the inspection to the parent company, the Asahi Shimbun reported. The newspaper said this is the first business suspension order issued to an insurance company since Japan Post Insurance (かんぽ生命保険) in December 2019, which was suspended for three months. [ 1 ]
Why it matters
According to the Asahi Shimbun, this is the first business suspension order issued to an insurance company since Japan Post Insurance in December 2019. The action reaches beyond one company: the Asahi Shimbun reported that a second group insurer was suspended and the parent was cited for deficiencies in how it manages its subsidiaries.
Key facts
- The Financial Services Agency issued a business suspension order to Prudential Life Insurance on October 9. [ 1 , 3 ]
- The order halts new insurance sales, including new contracts, for about three months. [ 1 , 3 , 4 ]
- The action follows a case in which Prudential Life employees defrauded customers of large sums of money. [ 1 , 3 ]
- The agency ordered management to clarify its responsibility. [ 1 , 3 ]
- Gibraltar Life Insurance, a group company with similar money-related misconduct, was also given a suspension order of about three months. [ 1 ]
- Parent company Prudential Holding of Japan received a business improvement order under the Insurance Business Act. [ 1 ]
- It is the first suspension order for an insurer since Japan Post Insurance in December 2019, the Asahi Shimbun reported. [ 1 ]
Confirmed by several sources
Still unclear
- The total amount of money taken from customers and the number of customers affected. The documents describe the sums as large but give no figures.
- The suspension of Gibraltar Life Insurance and the improvement order against Prudential Holding of Japan. Only the Asahi Shimbun reports these measures.
- Exactly which business lines are covered by the suspension. The Asahi Shimbun says new contracts for insurance products and other business, NHK says new insurance solicitation, and other outlets describe it as a partial or temporary suspension.
What local media are saying
Timeline, local time
- The Asahi Shimbun reports the suspension orders against Prudential Life and Gibraltar Life and the improvement order against the parent company. [ 1 ]
- NHK reports the partial business suspension order against Prudential Life. [ 3 ]
- The Mainichi Shimbun reports the temporary suspension and halt to new insurance sales. [ 4 ]
- Yahoo! News Japan carries the partial suspension order as a headline. [ 5 ]