Trade unionists at Tokai Bank are demanding compensation for potential losses on premiums they paid for pension plans with failed Chiyoda Mutual Life Insurance Co., which is closely tied with the bank, the unionists said Monday.
Many employees at the bank took out insurance or pension plans sold by Chiyoda Mutual because the insurer's strategy was to sell policies to the bank's employees and corporate borrowers.
The bank effectively encouraged pension plans with Chiyoda by paying out "incentive money" for employees to do so, the unionists said.
Chiyoda asked the Tokyo District Court on Oct. 9 to protect its assets from creditors under the special rehabilitation law, a move that effectively signals failure and gives the firm time to rehabilitate itself.
Court-appointed administrators may require the insurer to cut back on some of its insurance and pension plans while demanding that guaranteed yields on various insurance products -- the yield that an insurer promises to earn from collected premiums in order to discount premiums -- be reduced.
Tokai Bank has denied any responsibility for losses that might be incurred by employees or corporate borrowers who took out insurance or pension plans from Chiyoda.
The unionists are members of a Tokai unit of an umbrella labor union.