The Financial Services Agency (FSA) plans to issue a partial business suspension order against Prudential Life Insurance in response to a series of customer fund misappropriation cases.
The suspension which will be initiated under the Insurance Business Act was necessitated following revelations of widespread customer fund misappropriation. The FSA’s impending business suspension order underscores its commitment to protecting policyholders and maintaining trust in the insurance industry. Prudential Life Insurance is a part of the Japanese operations of US based Prudential Financial Inc.
Market experts believe that the FSA will direct the life insurer to halt all policy sales and new contracts and to focus exclusively on restructuring its internal management system.
In January, Prudential Life announced that current and former employees had defrauded customers of JPY3.1bn in total, prompting the resignation of then President and CEO Kan Mabara and an on-site inspection by the FSA. The company has voluntarily suspended sales activities for new contracts from 9 February to 5 November and is working to compensate customers and implement measures to prevent a recurrence.