Misconduct at Prudential: Where are the Qualifications to Handle Life Insurance Products?
Despite the fact that the company should be closely involved with its customers over their lives, employees defrauded customers out of huge sums of money and extensively engaged in sales practices that forced customers to purchase its life insurance products against their will.
Prudential Life Insurance Co., a foreign-affiliated company, has been accused of massive financial fraud by its employees, involving the forced sale of life insurance products to customers against their will. A total of 794 people reported damage from the fraud, with losses exceeding ¥6.1 billion. The misconduct allegedly stemmed from a performance-based system and a sales technique called the "pyramid scheme," in which customers were encouraged to introduce their relatives and friends as new customers.
This practice, combined with a closed-door corporate culture and a focus on individual connections, allowed the fraud to persist for many years, from 1992 to 2025. The Financial Services Agency has imposed a partial business suspension order on the company for violating insurance regulations, acknowledging about 4,000 cases of sales that did not align with customers' intentions.
This is the first such order for a life insurance company since 2019 and the second-most severe penalty after license revocation. The scandal may also have been prevented if the Financial Services Agency had launched rigorous inspections at a previous point, as warned by the Local Finance Bureau in 2018.
Written by urgent.news from The Japan News by The Yomiuri Shimbun's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
