Jiji Press TOKYO (Jiji Press) — Japan Post Insurance Co. and Japan Post Co. vowed Wednesday to correct excessive sales quotas for personnel, in response to some 93,000 recently revealed cases of inappropriate insurance sales.
The two companies said that with their parent, Japan Post Holdings Co., they will soon set up a third-party panel to investigate the cases while monitoring the implementation of relief measures for affected customers.
The Japan Post units will start a review of how they set sales targets in August or later, while being advised by the third-party panel.
At a press conference, Japan Post Insurance President and Chief Executive Officer Mitsuhiko Uehira apologized for harming the interests of many customers.
“We failed to conduct customer-centered operations,” Japan Post President and CEO Kunio Yokoyama said.
The Financial Services Agency is expected to consider administrative punishments for the two companies.
The scandal stemmed from the desire of Japan Post Insurance to increase sales of insurance products at a time when it was struggling to earn profits from government bond trade in the current low-interest environment.
Meanwhile, commissions from the sale of Japan Post Insurance products have been a major source of income for Japan Post, which has been pressured by declining mail volumes.
The inappropriate cases, found in the five years through March 2019, include about 23,900 cases in which existing Japan Post Insurance policyholders became uninsured after their applications to change their insurance policies were rejected for health reasons, although the policy changes were recommended by sales personnel of the company.
In 22,000 cases since April 2016, meanwhile, customers have been paying premiums on both their previous and new insurance policies for a half year or longer.
As a relief measure for affected customers, Japan Post Insurance will pay insurance benefits for hospitalization or other events under their previous policies.
The company will also repay overpaid premiums and introduce a system to allow policyholders to have new insurance policies without terminating their existing contracts.
Earlier this month, it banned sales personnel from recommending insurance policy changes that could be detrimental to policyholder interests.
Furthermore, Japan Post Insurance will set up a task force led by its CEO to revamp sales operations. By the end of this year, it will report progress on implementing relief measures for affected customers.Speech