Business / Corporate

22,000 cases of customer double payments uncovered at Japan Post Insurance

JIJI

Some 22,000 cases have been discovered at Japan Post Insurance Co. in which customers made double payments on insurance premiums for their new and old contracts for six months or longer, informed sources said Tuesday.

Japan Post Insurance has launched an investigation and suspects post office employees prevented customers from canceling their old insurance contracts for at least six months in an attempt to receive the full amount of sales incentives, the sources said.

The practice allegedly took place between April 2016 and last December.

The company, an affiliate of Japan Post Holdings Co., outsources sales of its insurance products for individuals to workers at post offices, run by Japan Post Co., which is also a member of the postal service group.

According to Japan Post Insurance, such workers receive sales incentives based on the number of insurance contracts they bring in. But the allowance will be halved if old contracts are canceled within six months of the conclusion of new contracts by the same customers.

In many of the roughly 22,000 cases, old contracts are believed to have been canceled more than six months after new contracts were signed so that the incentives would be paid in full, the sources said.

The incentives are also cut in half in the event new policy contracts are concluded within three months of the cancellations of old contracts.

There were some 47,000 cases, also between April 2016 and last December, in which Japan Post Insurance customers were uninsured for four to six months, the sources said, suggesting that post office workers may have let the clients sign new contracts four months or more after the cancellation of their old contracts to prevent the sales incentives from being halved.

Taro Aso, the financial services minister, told a news conference Tuesday that the Financial Services Agency would urge Japan Post Insurance to take measures to correct the situation if these problems are confirmed.

The suspected irregularities are separate from a potential scandal revealed by the insurer last month, according to the sources. Japan Post Insurance said June 27 that there could be up to some 23,900 cases in the five years to March this year in which customers were negatively impacted by changing contracts.

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