Japan's Financial Services Agency on the 9th ordered Prudential Life Insurance and its group company Gibraltar Life Insurance to suspend part of their operations for more than three months. The suspension runs from the 13th of this month through the end of January next year, halting new contracts and sales of products and pressing the companies to rebuild their management systems. The FSA issued a business improvement order to parent company Prudential Holdings of Japan, demanding stronger governance. In January it emerged that more than 100 employees and former employees at Prudential Life had improperly received a total of about 3.1 billion yen from customers, prompting President Hiroshi Mabara to resign to take responsibility. A report released by a third-party committee on October 8 pointed out that the amount of damage had swelled to more than 6.1 billion yen in total on a reported basis, and that a corporate culture that placed excessive emphasis on sales performance was the cause. The company plans to review its compensation system, which is close to pure commission, and introduce a minimum guaranteed salary, while three members of the current management team, including President Hiromitsu Tokumaru, will voluntarily return 30 percent of their monthly pay for three months.
Prudential Financial, Inc.Japan's FSA ordered Prudential Life and Gibraltar Life to suspend part of operations for over three months and issued a business improvement order to parent Prudential Holdings of Japan.
