The president of a Tokyo construction firm has filed a criminal complaint against an employee of Mitsui Marine & Fire Insurance Co. and one of the insurer’s former agents on suspicion of fraud, sources close to the case told Kyodo News on Monday.
Kamio Kensetsu’s president, Shigeo Nakamura, filed the complaint with the Metropolitan Police Department, accusing the employee and the former agent of swindling 11 million yen the construction company paid between November 1993 and April 1997 for a “questionable” insurance policy, the sources said.
Mitsui Marine, Japan’s third largest casualty and property insurer, sold questionable insurance policies worth more than 1 billion yen through 1997, despite instructions by the Finance Ministry not to do so. The incident came to light in July.
The Tokyo-based insurer promoted the policy as a tax-saving instrument, with premiums paid in one lump sum out of money loaned from financial institutions. Monthly interest payments on such loans are typically counted as tax-deductible expenses.
According to the sources, the construction company had agreed to take out another policy to cover its employees over industrial accidents after the Mitsui Marine employee and the former agent recommended the policy to the president in September 1993.
However, the employee and the agent apparently failed to file the contract, and instead allegedly filed a contract for the questionable policy, swindling payments of about 250,000 yen per month between November 1993 and April 1997, the sources said.
The construction firm claims the employee and the agent produced a bogus contract for the policy in order to meet their sales target.
Kamio Kensetsu says it cannot be reimbursed even though it has canceled the contract, because the monthly payment was allotted to pay off the loan interest.
Mitsui Marine, while admitting having sold such policies, said sales personnel explained the details of the contract to clients and that no fraud has been committed in relation to the policies.
In 1987, insurers — including Mitsui Marine — decided to discontinue sales of such products following an order by the Finance Ministry, which said the products were not intended to meet the objective of insurance policies.
But in 1997, an internal investigation at Mitsui Marine prompted by trouble with a client led to the discovery of more than 10 contracts for which policyholders each paid lump sums of more than 100 million yen financed by loans.
The company reported the discovery to the Finance Ministry and notified sales staff and agents not to sell such products.
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