The Financial Services Agency will conduct on-site inspections of Japan Post Co. and Japan Post Insurance Co. in September over the insurance sales scandal involving the Japan Post Holdings Co. units, according to informed sources.

The FSA has informed the two companies of the planned inspections. It will start with Japan Post Co. on Sept. 11 and Japan Post Insurance around the same time, the sources said.

The agency will examine the background and causes of the wrongdoing, including cases in which their policyholders made double premium payments when switching policies and became temporarily uninsured, the sources said.

It will also shed light on the parent company’s responsibility for supervising the subsidiaries, the sources said.

The Japan Post Holdings group is expected to release an interim report on its internal investigation within the month.

The FSA will consider taking administrative action against the group, such as issuing a business improvement order, the sources said.

In late July, it was revealed that some 183,000 contracts for Kampo life insurance policies might have been subject to inappropriate sales practices by Japan Post Insurance.

In August, it came to light that double premium payments or other problems involving over 100,000 cancer insurance contracts from Aflac Life Insurance Japan Ltd. occurred in the year to May of this year. The contracts were sold by Japan Post Co. on Aflac’s behalf.

The insurance business law mandates that policyholders be notified of important matters such as policy premiums and coverage provisions. It also bans forcing customers to switch to new policies without alerting them to the disadvantages.

The announcement of the FSA inspections came after Japan Post said Friday that sales of all Kampo life insurance products would be resumed in stages starting Oct. 1, following a suspension of some two months due to the sales irregularities.

Japan Post Co. and Japan Post Insurance said in mid-July, after the scandal came to light, that they would suspend the marketing of Kampo policies via visits and over the phone until the end of August. They decided to keep the sales suspension in place until the end of September.

In restarting sales of Kampo policies, Japan Post and Japan Post Insurance will beef up checks to see if all contracts comply with the wishes of their customers.

As for sales of the cancer products commissioned by Aflac, the two companies will introduce on Monday a new system to prevent policyholders from making double premium payments when switching to new contracts.

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