Thirty-eight Japanese and foreign life insurers operating in Japan failed to pay a combined 35.9 billion yen in insurance benefits over a five-year period to March 2006, according to a government report released Thursday.
The number of nonpayment cases totaled 440,000 in the five-year period, according to the report compiled by the Financial Services Agency. The report was submitted to a joint meeting of the ruling Liberal Democratic Party’s two committees in charge of financial and fiscal affairs.
The numbers were collated on the basis of reports submitted by the insurers to the financial industry regulator, which had demanded their submission in light of a public outcry over several nonpayment scandals.
The unpaid benefits include premiums that should have been returned to policyholders who canceled their contracts as well as premiums that should have been reimbursed after policies were invalidated with their holders stopping premium payments, the report shows.
The unpaid amount also includes insurance money payable under the terms of group policies, it says.
The report notes that the magnitude of nonpayment cases of foreign insurers is larger than had been previously known.
AIG Star Life Insurance Co., an arm of American Insurance Group Inc., failed to pay a combined 3.38 billion yen in 86,600 cases, it shows.
Manulife Life Insurance Co. failed to pay a combined 1.51 billion yen for 49,300 cases, with Prudential Life Insurance Co. failing to meet its obligations to pay 3.16 billion yen in 35,700 cases.
Among Japanese insurers, Meiji Yasuda Life Insurance Co. saw its nonpayment cases almost double to 63,600, when the number of nonpayment cases associated with its group policies as unveiled in its report was included.
The FSA said 12 major Japanese insurers failed to live up to their payment obligations in a combined 260,000 cases worth a total of 26.9 billion yen.
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