Tokyo, Oct. 8 (Jiji Press)–A corporate culture that placed excessive emphasis on sales performance was cited as a cause of fraud by employees of Prudential Life Insurance Co. who defrauded customers of money, a third-party investigation report showed Thursday. According to the report, former and present employees fraudulently received about 6,166 million yen in total from customers. The report said that it was difficult for officials in managerial posts to oversee high-performing sales employees as the corporate culture had weakened the authority of managers over top performers. The Tokyo-based life insurer will review its compensation system, which is heavily weighted toward acquiring new contracts, and introduce a guaranteed minimum salary scheme in 2027. “We sincerely apologize once again for the concern and inconvenience caused,” Prudential Life President and CEO Hiromitsu Tokumaru told a news conference. “We take very seriously the situation we have caused, which has shaken the foundation of trust.” Three executives, including Tokumaru, will voluntarily return 30 pct of their monthly remuneration for three months to take responsibility for a series of problems, including a scandal that emerged during the company’s voluntary suspension of sales activities. The company took disciplinary action against 157 employees involved in the fraud, including 64 who were either dismissed on disciplinary grounds or asked to leave the company. It also plans to consolidate and reorganize its branch offices in stages to strengthen management oversight and supervisory functions. In January, Prudential Life said that more than 100 of its present and former employees had defrauded customers of about 3.1 billion yen. Additional cases have continued to be reported since then. Since early February, the company has suspended new sales activities. The suspension is scheduled to continue until early November. The company will carefully assess whether to resume sales activities. The Financial Services Agency is considering issuing a partial business suspension order against the company. END [Copyright The Jiji Press, Ltd.]
