保诚日本因销售违规将遭日本金融厅部分停业三个月，但公司自2月起已主动停售，对美股母公司冲击有限

TOKYO -- Prudential Life Insurance released a report Thursday detailing how performance-based compensation fueled years of misconduct at the Japan-based provider.
The report, spanning over 160 pages, describes a corporate culture that prioritizes sales figures as the most important standard. The business model relied excessively on individual connections, with an overall lack of governance in the organization.
Japan's Financial Services Agency plans to impose a partial business suspension order on the company, also known as Prudential of Japan, the Japanese affiliate of U.S. insurance giant Prudential Financial. The pause would last three months, during which new insurance sales would be prohibited.
Despite opportunities to enact fundamental measures to improve governance, Prudential Life lacked the initiative to make groupwide decisions. The third-party probe by lawyers also revealed the company failed to address the increasing number of whistleblowers who have appeared since around 2019.
Prudential Life's compensation structure was based almost entirely on commissions. The company encouraged the sales team to pursue an "infinite chain" of referrals, in which customers would connect the sales rep to additional customers.
It appeared that Prudential Life hired sales employees who were obsessed with compensation. Stark disparities with compensation inside the company existed as well, the report said.
During new employee training, statements were made that set high income targets. Some branch managers even disclosed their own compensation as a way to motivate new hires, the report said.
Another incentive was the "President's Trophy" given to employees earning top commissions. The award ceremonies took place in Okinawa or Hawaii.
The desire to win the President's Trophy led to employees fabricating contracts or engaging in other problematic behavior, the report said. A local office of the Ministry of Finance reportedly raised this issue with Prudential Life. Some employees involved in the company's scandal have received the President's Trophy.
Meanwhile, employees unable to land contracts received a monthly income of roughly 200,000 yen ($1,264), which is around minimum wage. Many employees who left Prudential Life did so due to anxiety about finances. Employees themselves bear a large portion of the expenses incurred during sales.
Prudential Life previously disclosed numerous misconduct cases in which sales employees are alleged to have obtained money from customers through fraud or other illegitimate means. The company has disciplined 157 employees and former employees in connection with the scandal.
The damage to customers totaled 6.16 billion yen, or $39 million. It is suspected that sales employees improperly obtained customer money as far back as 1992.
The report also mentioned U.S. parent Prudential Financial. A fundamental assessment of the risks inherent in the business model and in management has not been undertaken by the group, the report said.
Founded in 1875 in the U.S. state of New Jersey, Prudential is one of the largest life insurance companies in the U.S. The three group companies in Japan, including Prudential Life, are together the believed to be the biggest moneymaker after the U.S. operation. The group plans to advance reforms through cooperation of management on both sides of the Pacific.
Prudential Life has voluntarily suspended sales activities since February.
"No decision has been made" concerning lifting the suspension, Prudential Life President Hiromitsu Tokumaru told reporters on Thursday.