SEC Filings

Prudential Japan Unit To Close 30 Agencies And Rework Sales Pay After Outside Probe

An outside committee called the misconduct structural; 146 current and former sales employees were disciplined, and recruitment stays suspended.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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Prudential Japan Unit To Close 30 Agencies And Rework Sales Pay After Outside Probe

Prudential Financial's Japanese life insurance unit published an outside committee's report on Thursday and said it will close 30 agencies and rebuild how sales staff are paid, according to an 8-K filed the same day. The Special Investigation Committee found the sales-employee misconduct was a structural problem, not a set of isolated cases.

What the committee found

The unit, Prudential Life Insurance, said in the exhibit to the filing that the committee traced the problems to the interplay of the business model, pay systems, culture, sales management and head-office governance. The business model leaned too heavily on individuals' personal networks and relationships of trust.

Those closed, individualized relationships made it hard for managers and head office to see what sales employees were doing with customers. The committee also said many cases involving repeated money transfers went undetected for long periods.

It faulted head office and the board for lacking ways to pool risk information such as complaints, whistleblower reports, misconduct cases and internal audit findings. Past cases brought only case-by-case fixes, it said, not fundamental reform. The unit said it accepts the structural diagnosis. The report also refers to suspected inappropriate conduct in insurance solicitation, which the company is examining in a self-review.

The rebuild: agencies, pay and managers

Prudential Life will open seven agencies under a new structure on November 1 and close 30 existing ones. The network shrinks from 139 agencies in July toward a planned 40 to 50.

Compensation will be revised for 2027:

  • Guaranteed minimum monthly pay.
  • After-sales service rising from under 5% to about 20% of pay.
  • Commission payments extended from four years to seven.

Sales managers will in principle no longer sell insurance themselves. Their base salary will rise to about 30% of compensation, and the direct link between recruiting new hires and pay will end.

Discipline and reimbursement

The company said 146 current and former sales employees were involved in the cases it announced on January 16. Of those, 53 were dismissed or told to resign, 68 were suspended and 25 received other measures such as reprimands. Discipline was completed by April 2026.

Separately, all 11 people still employed in cases outside the January group were dismissed or told to resign.

Reimbursement runs through an independent committee. Reviews are complete for 492 of the 498 affected individuals in the January disclosure, as of September 16.

What to watch

The unit disclosed the misconduct in January and has voluntarily suspended new-policy sales since February, according to Kyodo News. Recruitment stays suspended, and no date has been set to resume new sales. A Conduct Risk Committee with external experts is due by November.

The seven new agencies open November 1, but the filing sets no date for restarting new-business sales.

Sources

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