Japan Press Release Regarding Efforts to Reform for Restoring Trust

On January 16, 2026, The Prudential Life Insurance Company, Ltd. ("Prudential of Japan"), a subsidiary of Prudential Financial, Inc., issued a press release to report the findings of an internal investigation into incidents of misconduct involving current and former employees of Prudential of Japan. An English translation of Prudential of Japan's press release can be found below.

January 16, 2026
Prudential Holdings of Japan, Ltd.
Prudential Life Insurance Company, Ltd.

Regarding Efforts to Reform for Restoring Trust

At Prudential Life Insurance Company, Limited (hereinafter referred to as "Prudential Life"), multiple inappropriate cases involving improper investment solicitation and the like by current and former employees (hereinafter referred to as "(former) employees") towards policyholders and non-policyholders (hereinafter referred to as "customers") during their tenure or after retirement were uncovered. In response, starting from August 2024, we have been conducting customer confirmations to check for any suspicious handling of money or other concerns (hereinafter referred to as "customer confirmation"). As a result, as described later in "1. Status of Customer confirmation," multiple inappropriate cases have been identified.¹

We deeply apologize for the great inconvenience and concern caused to the affected individuals, our customers, and all related parties.

Prudential Holdings of Japan, Inc. (hereinafter referred to as the "Holding Company") and Prudential Life take this situation very seriously and will work to improve and strengthen the system to eradicate monetary misconduct and other issues, reform the organizational culture, and strive to regain the trust of customers and stakeholders.

As part of this initiative, we will change the President and CEO of Prudential Life Insurance effective February 1, 2026.

Kan Mabara, President and CEO of Prudential Life Insurance, will step down to clarify management responsibility, and Hiromitsu Tokumaru, currently President and CEO of Prudential Gibraltar Financial Life Insurance Co., Ltd. (hereinafter "PGF Life"), will succeed him.

Hiromitsu Tokumaru has over 20 years of broad experience ranging from insurance administration to sales management and has been serving as the President and CEO of PGF Life since July 2022. Utilizing his extensive experience and track record, he has newly joined the management of Prudential Life and is undertaking fundamental restructuring and strengthening of Prudential Life's framework and reforms of the organizational culture from a perspective never seen before.

This change follows the resignation of the Chairman and CEO of the holding company, effective October 6, 2025, and the appointment of Bradford O. Hearn as President and CEO, marking a continuation of reform. As a holding company, we will fully fulfill our duties in supervising and managing our subsidiaries.

Below, we report on the status of "customer confirmation," the causes that led to monetary misconduct, and the measures to prevent recurrence. Under the new system, we will fully commit to steadily implementing recurrence prevention measures to eradicate monetary misconduct and regain the trust of our customers and stakeholders.

^{1 https://www.prudential.co.jp/info_confirmation/}

1. Status of "Customer Confirmation"

Summary From August 2024, through the "Customer confirmation" initiative, we contacted policyholders to inquire whether there were any suspicious monetary dealings by (former) employees. As a result, it was discovered that three former employees engaged in fraudulent monetary activities during their employment with the company, which were deemed inappropriate monetary handling related to Prudential Life or life insurance operations.*1 A total of eight customers were affected, with total damages amounting to approximately 60 million yen. We are carefully verifying the facts and proceeding with compensating the affected customers *1 This refers to actions such as employees receiving money under the pretense of Prudential Life's systems or insurance operations while employed. Additionally, although not related to Prudential Life or life insurance operations, it was also revealed that 106 (former) employees engaged in inappropriate monetary activities.*2 The total amount received by these employees during their employment with the company was approximately 1.63 billion yen, and the amount received after employment with the company ended was approximately 1.45 billion yen. *2 This refers to actions such as soliciting investments unrelated to Prudential Life's systems or insurance operations and receiving money or personally borrowing money from customers.

(1) Confirmation Method
From August 2024, we contacted customers by letter, telephone, and email to inquire whether there had been any suspicious handling of money by current or former employees. We have also widely informed customers through newspaper advertisements in national and local papers as well as the Prudential Life Insurance website, requesting that they contact us if they notice any suspicious actions by (former) employees.

Methods and Overview of Contact Letters: Approximately 2.09 million letters sent from August 2024 to February 20252 Telephone calls: Approximately 130,000 calls made from September 2024 to February 2025 Email: Approximately 700,000 messages will be sent from August 2024 to February 2025.3 Newspaper Ad: Published in 40 national, regional, and local newspapers in August and December 2024. Alert on Prudential Life Insurance website: From August 5, 2024, a notice stating that confirmation regarding suspicious financial transactions is being conducted is posted.

For customers who made inquiries regarding the above notices, the head office department contacted them individually to confirm detailed information, and the head office department also conducted fact-checking with the (former) employee.

^{2 These are active contracts as of the end of May 2024 and contracts that have terminated within three years and meet Prudential Life Insurance's specified criteria for extinguished contracts (excluding some contracts, such as those for which Prudential Life Insurance has confirmed the customer's death, etc.).
3 We are sending this to customers registered on Prudential Life's contract holder site, "My Page."}

(2) Confirmation Results and Victim Response Status, etc.

During the recent "customer confirmation," it was discovered that three former employees had committed inappropriate handling of money related to Prudential Life's systems or insurance operations, including monetary fraud, while they were employed. We are carefully confirming the facts with the affected customers and proceeding with compensation and other appropriate measures.

① Case of Former Sales Employee (Tokyo) (Published on September 12, 2024)

Trigger of Discovery	Notification from Customer
Employee Attributes	Shiodome Branch, Former Sales Employee, Male in his 30s, Resigned in May 2023
Period of inappropriate conduct	May 2017 to December 2023
Summary of the Incident	Multiple customers were solicited to invest in a fictitious financial product, and money was receivedusing Prudential Life Insurance application documents and papers bearing the name of PrudentialLife Insurance. *Acts equivalent to disciplinary dismissal
Extent of Damage	4 individuals, approximately 53 million yen *Additionally, there were inappropriate handling of funds unrelated to Prudential Life Insurance'ssystemsor insurance operations involving 7 individuals, totaling approximately 100 million yen (plus about 43 million yen for post-retirement actions).
Response to Victims	Compensation for damages was provided to the four customers who were defrauded using documents bearing the Prudential Life Insurance company name, based on the company' employer liability. The former employee involved will be held liable for the compensation amount. Additionally, cooperation with the police has been conducted regarding this case.

② Case involving a former sales employee (Kumamoto Prefecture)

Trigger for discovery	Customer complaint
Employee profile	Kumamoto Branch, former sales employee, in his 20s, male, resigned in December 2022
Period of inappropriate conduct	From January 2021 to March 2025
Summary of misconduct	He received money from multiple customers by using the name of the employee stock ownership plan exclusive to Prudential Life employees, saying, "There are stocks that only employees can buy, guaranteeing absolute profit and principal security, so please entrust me with your money." ※ Acts equivalent to disciplinary dismissal
Damage situation	3 persons, approximately 7.2 million yen * In addition, one person was involved inappropriate handling of money unrelated to Prudential Life's systems or insurance operations, amounting to approximately 6 million yen (separately, about 53 million yen after retirement).
Response to the victims	Among the three customers from whom money was fraudulently obtained using the name of Prudential Life Insurance's employee stock ownership program, the former employee made restitution to two of them. We will take measures for the remaining customer based on the facts. Additionally, we have coordinated with the police regarding this matter.

③ Case of former sales employee (Tokyo)

Trigger of discovery	Customer's Claim
Employee Attributes	Capital Region Branch No. 8, Former Sales Employee, Male in his 50s, Retired December 2019
Period of inappropriate conduct	From December 2017 to February 2022
Summary of the Act	While having advanced the insurance premiums for a prolonged period that the customer was supposed to pay, he charged and received an amount in excess of the advanced premiums when collecting the total equivalent amount from the customer. *This act corresponds to disciplinary dismissal
Damage Situation	Approximately 25,000 yen per person
Victim support	We provided compensation to customers, based on the company's vicarious liability. We will seek reimbursement from the former employee concerned for the compensation amount.

(3) Other inappropriate monetary conduct discovered in the "Customer confirmation" process

In addition to the three cases above, inappropriate monetary conduct was discovered in the "Customer confirmation" process, as listed in Table 1. Although none of these involve Prudential Life Insurance's systems or insurance operations, recognizing our social responsibility, we inform you as follows, including actions after retirement.

Table 1 Other inappropriate monetary conduct

Category	(Former) Employee Number of people	Amount received by (former) employees*2			Amount refunded to customers by (former) employees, etc. (C)	Difference (A + B - C)	Relevant Customer Number of people
		(Former) employee Currently employment (A)	(Former) employee After employment (B)	Total amount (A+B)
Act of soliciting money from customers by proposing investments or profit-making schemes (including cases where all or part of the money was embezzled)	41 individuals (cumulative)	1.23 billion yen	1.29 billion yen	2.52 billion yen	640 million yen	1.88 billion yen	188 people (cumulative)
Acts of borrowing money from customers and other violations of internal regulations concerning monetary matters (such as loans)	91 people (cumulative)	400 million yen	160 million yen	560 million yen	150 million yen	410 million yen	312 people (cumulative number)
Total	106 people*1 (actual number of people)	1.63 billion yen	1.45 billion yen	3.08 billion yen	790 million yen	2.29 billion yen	498 people (actual number of people)

^{*1 The "106 people" includes 2 of the 3 individuals mentioned in point 1.(2) above, who committed inappropriate acts related to money that were not connected to Prudential Life's systems or insurance operations.
*2 The "amount received by (former) employees" also includes amounts recognized based solely on customer reports when there are similar claims from multiple customers.}

In addition to the inappropriate conduct listed in Table 1 during the "Customer Confirmation," it was confirmed that 69 (former) employees introduced investment products and related firms not approved by internal regulations to 240 customers. Although there was no money received from customers by the (former) employees, the total amount paid by customers to the firms introduced by these (former) employees was approximately 970 million yen during their employment and approximately 340 million yen after their resignation. Among these, the amount refunded to customers by the handling agents, etc., totals approximately 250 million yen. Regarding the actions of these (former) employees during their tenure, we have taken strict discipline measures based on internal regulations.⁴⁵

Specific examples of "(3) Other Inappropriate Acts Related to Money Discovered During Customer confirmation" are as follows.

・ A case where a (former) employee introduced a company or investment product not registered or licensed domestically, and subsequently the company's business was suspended, resulting in no refund to the customer.

・ An (ex-)employee introduced virtual currency investment contacts saying things like "I am making a profit myself, why don't you invest?" and a customer made an investment, but the customer was unable to log in to the system related to the investment and was not refunded.

・ An (ex-)employee explained, "If you participate in factoring investments that my clients are making, you can earn a monthly interest rate of 10%," received money, and initially dividends were paid but then stopped, and the customer was not refunded.

・ A former employee deceived by claiming, "I am an expert in asset management and have a track record of building assets through investment. If you entrust money to me, you can receive high dividends without the risk of losing the principal," accepted money but did not refund the customers.

・ A former employee requested, "Since I will invest in and operate a building materials company, please lend me money as investment funds," created an IOU, borrowed money, but did not refund the customers.

At Prudential Life, we do not engage in the sale of financial product other than the life insurance product and services approved by the company, and personal investment solicitations by employees and borrowing money from customers are also prohibited. We kindly ask our customers and related parties to be cautious about such suspicious investment schemes. If you have any concerns, please contact the Prudential Life Customer Service Center.

^{4 Among the 69 (former) employees, there are individuals who overlap with the "number of (former) employees" listed in Table 1. Similarly, among the 240 customers, there are some who overlap with the "number of applicable customers" listed in Table 1.
5 It also includes amounts recognized based solely on customer declarations in cases where multiple customers have made similar requests.}

Contact Information Prudential Life Insurance Company Customer Service Center 0120-810740 (Toll-free) Reception hours: Weekdays 9:00-17:30, Saturdays 9:00-17:00 (Closed on Sundays, public holidays, and year-end/New Year holidays)

2. Root-Cause that led to Monetary Misconduct

We take the occurrence of monetary fraud and other inappropriate monetary activities mentioned in sections 1(2) and (3) above very seriously. Under the supervision of the holding company, Prudential Life formed a special project led by the President and CEO in December 2024. This project has verified and analyzed individual cases focusing on serious inappropriate conduct, examined the risks inherent in sales sites and business models, and reviewed the adequacy of the management system. As a result, the causes that led to the monetary misconduct and related issues have been identified as follows.

(1) Issues in Managing Sales Employees' Activities and Compensation Systems

In the recently uncovered inappropriate conduct, there were cases where sales managers did not sufficiently manage the activities of sales employees, leading to incidents of monetary fraud and solicitation of inappropriate investment product through exploitation of close relationships with customers. Furthermore, cases have been reported in which sales employees request loans from customers due to the instability of their income, as well as fraudulent acts such as sales employees bearing part of the insurance premiums to secure performance. These cases have been reported to the relevant authorities based on laws and regulations.

We recognize that the cause of these monetary misconduct lies in the inherent risk within Prudential Life's sales systems that allowed violators to engage inappropriate conduct. Specifically, due to insufficient proper oversight by sales managers and inadequate checks by headquarters, close relationships formed between sales employees and customers, resulting in insufficient detection of inappropriate incidents. Furthermore, a compensation system that is excessively linked to performance attracted personnel focused on monetary gains, increasing the risk that the income instability of sales employees would lead to inappropriate behavior.

(2) Issues in the Overall Management and Supervision system

Although Investigation and responses were conducted each time individual inappropriate actions were discovered, it is considered a problem that sufficient discussion and Assessment delving into the risks inherent in the business model itself were not conducted at the board of directors or the executive officers' committee. Additionally, due to a management attitude that regarded the business model since its founding as given, an organizational culture hesitant to implement fundamental reforms had been formed. Furthermore, the establishment of the three-line management system was insufficient, with unclear roles and responsibilities between the first and second lines, and a lack of awareness and functional development regarding ownership of compliance and risk by the first line. As a result, the functions necessary for early detection of issues, making proposals to management, and driving improvements were not adequately demonstrated.⁶

^{6 The "three lines of defense" framework designates the first line as operational departments such as branch offices and head office sales support, the second line as risk management and compliance departments, and the third line as the
internal audit department. Each line bears its own roles and responsibilities in risk management and control, thereby strengthening risk management across the entire organization}.

(3) Issues with organizational culture

Due to the management attitude described in (2), a corporate culture was fostered within Prudential Life Insurance that emphasized "excessive respect for sales staff," "an absolute view of the business model," and "high achievers being highly praised."

At Prudential Life Insurance, there was a tendency to allow sales staff, who provide direct daily service to customers and are closest to them, to work with a degree of discretionary freedom.

Moreover, since its founding, the business model, which was designed to bring innovation to the industry and become the most trusted company by customers, has consistently received sufficient evaluation in terms of performance indicators such as contract renewal rates and customer satisfaction. As a result, there has been a widespread awareness that the business model should not and cannot be significantly changed.

And since sales employees are evaluated based on new contract acquisitions and their continuations under various sales systems, sales employees with superior performance who are certified with higher qualifications and receive many awards tend to be recognized as trusted and highly regarded by customers, resulting in their opinions gaining considerable influence.

Because of this, we were unable to look closely to Assessment whether structural problems were arising in sales sites or in the business model, and we were also not able to implement fundamental countermeasures.

3. Measures to Prevent Recurrence

Based on the causes of the previously mentioned monetary misconduct and other issues, Prudential Life Insurance will steadily implement the following recurrence prevention measures aimed at eradicating monetary misconduct and the like, under the supervision and management of the holding company.

(1) Improvement of Sales Systems

① Fundamental Improvement of Incentive Mechanisms Such as the Sales Compensation System
Regarding the compensation system for sales employees, we will fundamentally restructure it by returning to the ideal state from the perspective of aiming to eradicate monetary misconduct and similar problems. In addition, we will reform the systems for qualification, commendation, and promotion to sales management positions to incorporate evaluations of compliance and after-sales follow-up with customers. By doing so, we will strengthen the motivation toward compliance and after-sales follow-up and eliminate the organizational culture that prioritizes new contract performance.

In addition, we will fundamentally restructure the compensation system for sales management positions in the same way and revise the awards system to a design that sufficiently reflects the organization's compliance status and the management of its sales staff, thereby further enhancing motivation for promoting compliance and managing sales personnel.

② Strengthening timely and appropriate understanding of sales activities
We will strengthen the system to appropriately and timely grasp and manage when, where, to whom, and what kind of sales activities our sales employees are conducting. To that end, we will revise rules and internal regulations and make system modifications, obligating sales employees to enter and report information, requiring sales managers to manage it, and reflecting it in rewards and awards. By strengthening supervision and management, we will reduce opportunities for sales employees to engage inappropriate conduct, and if there are signs of such behavior, the company will recognize it and enhance monitoring to prevent inappropriate actions by sales employees.

③ Strengthening contact with customers by personnel other than the responsible sales employees
We will increase opportunities for our headquarters and other departments to directly contact customers to confirm that inappropriate conduct is occurring. This will strengthen deterrence against inappropriate conduct by sales employees.

④ Improvement of the recruitment process
We will strengthen the recruitment process to ensure that inappropriate personnel are not hired as employees of financial institutions. To secure personnel sufficiently equipped with the qualities and ethics required as financial institution employees, we have reorganized the personnel requirements and increased the use of external agencies and involvement from headquarters (implemented since April 2025).

5. Strengthening education and training
We will enhance education and training for sales employees to prevent inappropriate investment solicitations and the like. By improving the relevant training modules, enriching the content, and adopting training methods that are easier to learn, we will enhance employees' compliance awareness.

(2) Improvement of Overall Management and Supervision system

1. Improving risk sensitivity in management

Through initiatives like the following, we will internally or organizationally enhance risk sensitivity in management and maintain appropriate risk awareness. As a result, we will enable a sound Assessment of the business model.

• Revise the risk appetite to clarify the recognition of risks inherent in the business model and controls in future management.
• Conduct compliance and risk-related training for management.
• Clarify the roles and responsibilities of executive officers and others and reorganize personnel evaluations accordingly.
• Strengthening the organizational function that extracts discomfort and signs related to the business model from external changes and employee feedback, presents them to management, and discusses them within the management team.
• Improvement of risk awareness through the examination, implementation, and leadership of a series of recurrence prevention measures.

(2) Improvement of the management organization's operations

To ensure sufficient recognition and consideration of management issues at the Board of Directors and the Executive Officers' Meeting, we will improve the system and operations to enable in-depth discussions, such as changing the composition of members and organizing agenda items.

Regarding the composition of the board of directors, we are revision it to ensure the effectiveness of the board's supervisory function and to secure objective and diverse perspectives. In addition, at the Executive Officers' Meeting, the participants will be limited to enable deeper discussions.

③ Strengthening the three lines of defense management system

At the first line, we will demonstrate ownership of compliance risk and undertake the following initiatives to ensure that the three-line management framework functions adequately.

• Strengthening the compliance risk management framework within the sales organization.
• Enhancing information coordination and sharing between branch offices and the head office.
• Establishment of the 1.5-line organization (Sales Management Headquarters) and enhancement and functional strengthening of the second-line organization.
• Reorganizing the roles and responsibilities of the first and second lines and transferring operations accordingly.
• Clarification of the authority and responsibilities of each frontline position based on reorganized roles.

(3) Improvement of organizational culture

We will change the management attitude of treating the business model as given and correct the organizational culture issues mentioned in 2.(3) above by implementing various recurrence prevention measures. The status of improvements will be regularly checked through surveys and other means, and necessary improvements and additions to the measures will be made as needed.

4. Future Actions

We deeply apologize for the great inconvenience and concern caused to our customers and related parties. We are sincerely addressing the situation after carefully verifying the facts concerning the affected customers.

Additionally, strict discipline in accordance with internal regulations has been imposed on the (former) employees who committed the above inappropriate acts. Furthermore, depending on the nature of the case, we have reported, consulted with, and provided information to the police as appropriate.

Prudential Life, considering the causes of the monetary misconduct, will steadily implement measures to prevent recurrence in the future, striving with all our efforts to eradicate monetary misconduct and restore the trust of our customers.

Furthermore, the holding company will strengthen its management of subsidiaries going forward and will oversee and supervise to ensure that these recurrences prevention measures are implemented effectively. Together with Prudential Life, we will steadily implement measures to prevent the recurrence of monetary misconduct and other issues, and we will work as a unified team to restore trust from our customers, stakeholders, and society.