Meiji Life Insurance Co. and Yasuda Mutual Life Insurance Co., which are set to merge in January, said Friday they failed to pay special dividends in full to holders of certain insurance policies.
Meiji Life said it will make 1.61 billion yen in additional payments on 125,312 individual life insurance and pension insurance contracts.
The maximum additional payment per person stands at 6.84 million yen, with the per-person average totaling 12,852 yen, the insurer said.
Meanwhile, Yasuda will pay 233.80 million yen in additional special dividends on 30,093 insurance contracts.
The maximum additional payment per person stands at 920,000 yen, with the per-person average coming to 7,769 yen.
Meiji Life and Yasuda said the shortfalls stemmed from a failure to transfer reserves set aside for special dividend payments to new insurance contracts signed when policyholders changed their insurance products.
Special dividends are the benefits paid by an insurer upon the expiration of an insurance contract -- either when a policyholder dies or the contractual period of insurance expires. These dividends are paid separately from insurance money.
Meiji said it started sending letters Friday to policyholders or qualified recipients of insurance money notifying them of the special dividend shortfalls.
Yasuda said it sent out letters Thursday to policyholders or qualified recipients of insurance money alerting them to the shortfalls.