AFLAC Japan finds inappropriate discounts in...

TOKYO, Oct. 15 Kyodo

American Family Life Assurance Co., a leading provider of cancer insurance in Japan, has found that some of its sales outlets provided inappropriate discounts by registering individual policyholders as members of group insurance plans, informed sources said Sunday.

The sources said an in-house investigation covering some 9,000 sales offices across Japan has revealed that a considerable number of contracts offering inappropriate discounts on premiums were signed. The voluntarily investigation started in late July, they added.

Providing discounts by registering individual policyholders under group plans would violate the Insurance Business Law. Self-employed people, housewives and students are usually treated on an individual basis, while employees of firms with more than 20 staff can join group insurance plans.

Officials of Tokyo-based American Family, a subsidiary of U.S. insurer American Family Life Assurance Company of Columbus Inc. (AFLAC), said they cannot comment on the number of inappropriate contracts or whether they registered policyholders under the wrong plans because the in-house investigation is still not completed.

They will, however, submit to the Financial Services Agency an interim report on their investigation in the near future, they said, adding that they have notified the agency of the start of the in-house probe.

Individual policyholders registered as members of a group plan could receive discounts of roughly 6% on the firm's main product, ''super cancer insurance.''