Scandal-hit Japan Post Co. improperly sold around 104,000 insurance policies issued by U.S. partner Aflac Inc., sources close to the matter said Wednesday, bringing the total for inappropriately sold policies to 287,000 nationwide.
As the debacle expands, the problems are being blamed on the postal and financial behemoth’s failure to update its customer data management system, the sources said. Japan Post said the problem will take until October to fix.
The actions of Japan Post, which sells Aflac policies at post offices nationwide, resulted in customers becoming temporarily uninsured and or being double charged for a one-year period that ended in May this year, the sources said.
Japan Post halted sales of its own and third-party life insurance products after admitting in July to conducting inappropriate sales of around 183,000 policies and leaving customers at a disadvantage over the past five years.
It continues to sell Aflac’s cancer insurance products, however, treating them as an exception.
Aflac has long been a leader in cancer insurance in Japan. It signed a business partnership with Japan Post Holdings in 2013 and agreed last December to receive direct investment from Japan Post to expand their cooperation.
Under an arrangement with Aflac, a new customer cannot be insured for three months after he or she purchases the insurance to prevent a person who has already developed cancer from receiving a payout.
The rule caused people switching to a new Aflac insurance policy from an old one to pay for both contracts or be left without coverage for three months.
Since 2014, Aflac eliminated the duplication of premium payments in a contract renewal, but Japan Post did not make the necessary upgrade to its computer system to reflect that change, the sources said.
“There have been far more new purchases of the insurance than switches of contracts,” resulting in a delay in the system upgrade, a Japan Post official said.
The number of policy switches has risen recently following the launch of a new Aflac policy, the sources said.