The top executive of Japan Post Holdings Co. said Wednesday he is considering resigning in the wake of a probe that uncovered more than 12,000 cases of suspected improper sales of insurance products at two subsidiaries in the five years through March 2019.
“Regarding management responsibility, I will announce it at an appropriate time,” said Masatsugu Nagato, the chief executive of the former state-owned postal and financial services group, at a news conference in Tokyo. “There is a broad range of stakeholders, and each has a different responsibility, so the management will need to discuss the matter thoroughly.”
A company panel probed 183,000 suspected cases of improper sales at Japan Post Insurance Co. and Japan Post Co. The report found that of those, violations of a law or in-house rules are suspected in 12,836 cases.
It said legal violations were confirmed in 48 cases, while 622 were found to have breached in-house rules.
Some salespeople falsely and unlawfully told customers that their new contract could not be terminated for six months, while others pressured customers to delay terminating their contract, in violation of internal rules, Japan Post Holdings said.
Japan Post Insurance sold the products at over 20,000 post offices nationwide.
The panel said more than 70 percent of the customers subjected to the improper sales tactics were aged 60 or above, and 85 percent were female customers. It also said the salespeople were motivated to engage in the malpractice to achieve sales quotas and earn additional bonuses or to “prevent causing worry to their bosses.”
Some employees “lacked morale, and had poor awareness of compliance or a customer-first attitude,” the panel said, adding that it would release further findings around the end of March.
“There was an atmosphere that legitimized and tacitly approved improper” selling, the panel said.
The Financial Services Agency is considering ordering the two subsidiaries to halt part of their operations for improper sales of insurance policies as soon as Dec. 27, sources close to the matter have said.
The government owns a 57 percent stake in Japan Post Holdings, which was privatized in 2007.
Japan Post Holdings had aimed to resume insurance product sales around January after a self-imposed suspension in July. But Nagato said the company would “reconsider” that timetable.
To prevent a recurrence, Japan Post Holdings plans to review sales quotas and employee performance assessments that emphasized the number of new contracts sold.