- Japan’s Financial Services Agency ordered Prudential Life Insurance and Gibraltar Life Insurance to suspend new insurance sales from October 13, 2026, through January 31, 2027.
- More than 100 current and former Prudential Life employees were implicated in misconduct involving ¥3.1 bn, while a subsequent investigation identified more than ¥6.1 bn in reported victim losses.
- Regulators ordered governance reforms at Prudential Holdings of Japan, while Prudential Life plans to revise its commission-based compensation system and introduce guaranteed minimum salaries.
Japan’s Financial Services Agency (FSA) has ordered Prudential Life Insurance and Gibraltar Life Insurance, both subsidiaries of US-based Prudential Financial, to suspend new insurance business for more than three months following revelations of widespread employee fraud.
The regulatory order, issued on October 9, 2026, prohibits the two Tokyo-based life insurers from entering into new insurance contracts or selling insurance products between October 13 and January 31, 2027.
The suspension is intended to allow the companies to rebuild their management and internal oversight systems after investigations identified serious failures in employee conduct and corporate governance.
The FSA also issued a business improvement order to Prudential Holdings of Japan, the parent company of both insurers, requiring stronger governance, internal controls and consumer protection measures.
Regulators instructed the group to prioritize legal compliance and customer interests over sales performance and submit a business improvement plan by the end of November.
The enforcement action follows disclosures in January that more than 100 current and former Prudential Life employees had improperly obtained approximately ¥3.1 bn ($19.6 mn) from customers.
The scandal prompted the resignation of then-President Kan Mabara and an on-site regulatory inspection by the FSA.
A third-party investigation report released on October 8 subsequently found that total losses reported by victims exceeded ¥6.1 bn, substantially above the amount initially disclosed.
Investigators identified a corporate culture that placed excessive emphasis on sales performance as a contributing factor to the misconduct.
Prudential Life plans to revise its remuneration structure, which relies heavily on sales-linked commissions, and introduce a guaranteed minimum salary to reduce incentives associated with aggressive sales targets.
President and CEO Hiromitsu Tokumaru and two other executives will voluntarily return 30% of their monthly remuneration for three months as part of the company’s response.
Prudential Life had already voluntarily suspended new insurance sales in February 2026. The FSA’s formal order extends restrictions on its ability to resume business.
The sanctions represent the first suspension order imposed on a Japanese life insurer by the FSA since its enforcement action against Japan Post Insurance in 2019.
Both Prudential Life and Gibraltar Life will remain restricted from selling new policies until the end of January 2027 while implementing the required management and compliance reforms.
