Four major Japanese insurers announced punishments Thursday for 132 officials over a price-fixing scandal involving insurance contracts for corporate clients.
The four nonlife insurers, including Tokio Marine & Nichido Fire Insurance, also submitted business improvement plans to the Financial Services Agency.
Tokio Marine & Nichido said that 55 officials face pay cuts, including a 50% cut in monthly remuneration for three months for President Shinichi Hirose. Two executives at the company's parent, Tokio Marine Holdings, will also take pay reductions.
Sompo Japan Insurance said that penalties will be imposed on 49 individuals, including officials of its parent, Sompo Holdings, not only for the price-fixing but also for an automobile insurance fraud scandal at used car dealer Bigmotor.
Sompo Holdings Chairman Kengo Sakurada will take a monthly pay cut of 50% for six months.
Mitsui Sumitomo Insurance announced punishments for 14 people, including a 50% monthly remuneration cut for three months for President Shinichiro Funabiki. At Aioi Nissay Dowa Insurance, President Keisuke Niiro and 11 others will be punished.
In their business improvement plans, the four insurers said they will sell all of their strategic shareholdings in client companies, including cross-held shares. Tokio Marine & Nichido cited a risk of the shareholdings harming fair competition.
The four also said they will scrap business assistance to clients in the areas not related to insurance, such as buying their products, because such practices can distort fair competition.
In the price-fixing scandal, the insurers exchanged information beforehand in order to maintain market shares and insurance premium levels.
In light of the long-running practices, the FSA in December last year issued business improvement orders to the four insurers, stressing that cross-shareholdings were a key factor behind the misconduct.
The four companies had a total of ¥6.5 trillion in strategic shareholdings at the end of March last year.