Scandal-Hit Prudential Likely to Face Partial Biz Suspension

Tokyo, Oct. 2 (Jiji Press)--Japan's Financial Services Agency plans to issue a partial business suspension order to Tokyo-based Prudential Life Insurance Co., whose employees were found to have defrauded customers, sources said Friday.

The FSA has found it necessary to have the company, which is part of the Japanese operations of U.S. giant Prudential Financial Inc., concentrate on rebuilding its internal management system by stopping its activities related to insurance policy sales and new contracts, the sources added.

A business suspension of at least three months has been proposed for the expected order under the insurance business law. The agency also expects to issue a business improvement order to Prudential Life's parent company, Prudential Holdings of Japan Inc., to demand improvements in governance and management accountability.

In January, Prudential Life announced that current and former employees had defrauded customers of 3.1 billion yen in total, prompting the resignation of then President and CEO Kan Mabara and an on-site inspection by the FSA.

Prudential Life has voluntarily suspended sales activities for new contracts from Feb. 9 to Nov. 5. It is also working to compensate customers and implement measures to prevent a recurrence.

[Copyright The Jiji Press, Ltd.]