TOKYO, Dec 28 (NNN-NHK) – Japan Post Holdings Co., said that, its president and those of two of its subsidiaries will resign, to account for a scandal involving the shady sale of insurance policies, while financial regulators ordered the two subsidiaries to suspend sales of insurance policies.
Japan Post Insurance Co. and Japan Post Co. were ordered by the the Financial Services Agency (FSA), to suspend sales of insurance products for three months from Jan 1, and business improvement orders were issued on all three companies.
The FSA’s probe revealed that salespeople had given improper explanations to customers, which saw a huge number of them pay unnecessary premiums for overlapping contracts, while some customers were also left uninsured for periods of time between contracts.
“The companies’ corporate atmosphere lacked the awareness of customer protection,” the FSA said.
To take responsibility for the scandal, Japan Post Holdings President, Masatsugu Nagato, Japan Post President, Kunio Yokoyama, and Japan Post Insurance President, Mitsuhiko Uehira, will step down.
Former internal affairs minister, Hiroya Masuda, will replace Nagato, while Uehira will be replaced by his current deputy, Tetsuya Senda. In another internal appointment, Yokoyama will be replaced by Kazuhide Kinugawa, a senior managing executive officer of the holdings company.
An ongoing internal probe revealed that 12,836 cases of policy sales are suspected of having broken the law or company rules, as of Dec 15.
Of these, 670 cases have already been determined to have been in violation of current laws or rules, with the probe finding that more than 70 percent of customers duped by the improper sales were aged 60 or over.
The probe also revealed that the illegitimate sales practices were propelled by unreasonable sales targets and the hopes of achieving bonuses, as well as by salespeople not wanting to cause concern to their bosses.
The Japan Post group was privatised in 2007, and is still 57 percent owned by the government.– NNN-NHK