10 life insurers submit business improvement plans after pay failure.
The life insurance industry in Japan will step up efforts to regain public confidence as 10 leading companies presented business improvement plans to the Financial Services Agency on Friday after their failures to pay out due benefits to policyholders, industry leaders said.
The 10 companies also announced in-house punishments for those responsible for the nonpayment scandal, including a 30 percent, two-month pay cut for Nippon Life Insurance Co. President Kunie Okamoto.
Okamoto and other chief executives of the top four Japanese life insurers held press conferences one after another to explain their business improvement plans.
Kenji Matsuo, president of Meiji Yasuda Life Insurance Co., who heads the Life Insurance Association of Japan, said life insurers ''lacked payment systems based on the viewpoint of policyholders.''
Along with Nippon Life which announced pay cuts for Okamoto and nine other board members, three other top insurers -- Meiji Yasuda Life, Dai-ichi Mutual Life Insurance Co. and Sumitomo Life Insurance Co. -- announced pay cuts or reprimands for 42, 34 and 23 directors, respectively.
In February last year, the FSA urged all the 38 life insurers operating in Japan to review their operations and 37 of them reported nonpayments, with the total amount coming to 97.3 billion yen in some 1,350,000 cases during the five-year period through March 2006.
The financial industry watchdog issued the business improvement order in early July this year to the 10 firms because it felt the amounts of nonpayment at those firms were particularly bad.
The 10 are eight Japanese insurers -- Nippon Life, Dai-ichi Mutual Life, Meiji Yasuda Life, Sumitomo Life, Asahi Mutual Life Insurance Co., Fukoku Mutual Life Insurance Co., Mitsui Life Insurance Co. and Daido Life Insurance Co. -- and two Japanese arms of U.S. insurers -- American Family Life Assurance Co. of Columbus and American Life Insurance Co.
They failed to pay a total of 79.1 billion yen in some 990,000 cases during the five years, according to the FSA.
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|Publication:||Japan Weekly Monitor|
|Date:||Aug 4, 2008|
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