TOKYO (TR) – The Financial Services Agency (FSA) is preparing to order Prudential Life Insurance to halt all new insurance sales following a massive fraud scandal in which employees swindled customers out of billions of yen, reports NHK (Oct. 2).
An investigation revealed that current and former employees of the foreign-affiliated life insurance giant defrauded customers out of approximately 3.7 billion yen through a series of inappropriate financial collections and illicit transactions.
Following reports from the company and rigorous on-site inspections, the FSA determined that Prudential Life’s internal management and oversight systems were severely inadequate, allowing the fraudulent behavior to be repeated unchecked. Investigative sources say the agency is now finalizing plans to issue a suspension order on new business operations under the Insurance Business Act.
If the suspension is officially handed down, it will mark the first time a life insurance company in Japan has been slapped with such a severe penalty since the infamous Japan Post Insurance (Kampo) illicit sales scandal in 2019.
Prudential Life has already been voluntarily refraining from soliciting new contracts since February of this year after the staggering scale of the embezzlement came to light.
