Japan’s financial watchdog said it has reprimanded Nippon Life Insurance Co. over improper cancellation of insurance policies, ordering Japan’s largest insurer to submit a business improvement plan.
The Financial Services Agency said an employee at Nippon Life altered the expiration dates on 105 insurance policies and later canceled them improperly over a nine-year period through 2005.
The agency said it ordered the company to submit a plan to improve its governance by Aug. 25.
The improper cancelations later led Nippon Life to pay out 204 million yen ($1.74 million) in insurance claims for 28 people who accepted its offer to restore their insurance policies, the agency said.
The insurer also miscalculated the late fees it pays to its policy holders, resulting in a 585,000 yen ($5,000) deficit in more than 330 cases over the past four years, the FSA said.
The agency said Nippon Life made these errors because it lacked a comprehensive checking system by third parties, as well as proper staff training.
It ordered Nippon Life to improve payment oversight and staff management, including more frequent staff rotation, saying that the employee responsible for the improper policy cancellation had held the same position for 16 years.
Nippon Life in a statement apologized for the problems and said it will take steps to prevent any reoccurrence.
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