Prudential Life Sets Up 3rd-Party Panel to Investigate Fraud

Tokyo, Feb. 10 (Jiji Press)–Prudential Life Insurance Co. said Tuesday that it has set up a third-party committee to investigate widespread fraud by its employees targeting customers. “We’ll fully cooperate with the independent investigation,” Hiromitsu Tokumaru, who became the company’s president on Feb. 1, said at a press conference in Tokyo. It was Prudential Life’s second press conference on the fraud, which came to light last month. At the previous press conference on Jan. 23, the company took a negative stance on commissioning a third-party panel to investigate the matter. But at the latest press conference, Tokumaru said, “We’ve found it necessary to undergo a third-party investigation with higher expertise and objectivity.” Led by Shuji Iwamura, former head of the Nagoya High Public Prosecutors Office, the third-party committee will review the results of Prudential Life’s internal investigation, analyze the cause of the fraud and propose preventive measures. Since 1991, more than 100 current and former Prudential Life employees have fraudulently received a total of 3.1 billion yen from some 500 customers by encouraging them to invest in unauthorized financial products. The Financial Services Agency is working to determine the full scope of the misconduct, including through on-site inspections, while considering administrative punishment. At a separate press conference on Tuesday, Finance Minister Satsuki Katayama said that she will instruct the agency to strictly examine the company’s ability to take effective preventive measures. Regarding compensation for fraud victims, Prudential Life initially planned to set up an expert panel to determine the scope of compensation, but it now plans to fully compensate victims of fraud conducted by employees while in service. For cases involving former employees, the panel will decide whether to pay compensation. Prudential Life said last week that it would suspend sales of new insurance policies for 90 days to rebuild its governance system. “We’ll prevent a recurrence and restore trust through organizational reform,” Tokumaru said. END [Copyright The Jiji Press, Ltd.]