National

Japan Post weighs halt to commissioned insurance sales after mismanagement reports

JIJI

Japan Post Co. is considering suspending commissioned sales of insurance products from private companies such as Nippon Life Insurance Co. through post offices across the nation, sources have said.

The move comes after the revelation last month of inappropriate sales practices by Japan Post employees involving Japan Post Insurance Co. products.

The company, which has already suspended sales of Japan Post Insurance products, has begun negotiations with insurers such as Nippon Life and Sumitomo Life Insurance Co.

If the firm decides to suspend all insurance sales, it is likely to affect the finances of the Japan Post Holdings Co. group.

Japan Post Holdings President Masatsugu Nagato and other group executives are expected to present their plans at a news conference on Wednesday.

Nippon Life has asked Japan Post to temporarily halt sales of a foreign currency-denominated variable annuity insurance product of the insurer. Aflac Life Insurance Japan Ltd. has decided against suspending commissioned sales, as a quarter of the insurer’s new contracts are signed through post offices operated by Japan Post.

The Japan Post Holdings group established a special investigation committee composed of outside lawyers to investigate the nature and causes of the problem, and a report is planned by the end of the year at the earliest.

Irregularities, such as customers having to make double premium payments, have been found for about 93,000 contracts. The number may increase significantly as the investigation progresses.

Companies such as Nippon Life and Sumitomo Life have begun their own investigations into potential inappropriate sales practices at post offices for their commissioned products. Sales methods such as demanding sales quotas on the part of post offices are seen as the root causes of the issue, with one source saying that it would be difficult to continue sales.

Japan Post has already decided that it will refrain from selling Japan Post Insurance products until the end of August. However, some within the Japan Post Holdings group said that sales may not restart before the investigation report is completed later this year.