LEAD: Mitsui Sumitomo Insurance faces 2-week sales ban as penalty.
The Financial Services Agency is considering ordering Mitsui Sumitomo Insurance Co. to suspend sales of nonlife insurance policies as well as medical insurance products at its all outlets for about two weeks as punishment for its nonpayment of insurance claims, FSA sources said Tuesday.
The FSA is also planning not to authorize any new insurance products for Mitsui Sumitomo until it confirms that the insurer has improved its internal supervision system, the sources said.
FSA investigations conducted from last November to February uncovered Mitsui Sumitomo's failure to pay insurance claims in at least 30,000 cases, they said.
Last fall, the insurance company said it failed to pay claims in about 27,000 cases from 2002 through 2005.
The FSA investigations found there were at least 3,000 more cases of insurance claim nonpayment.
The FSA believes Mitsui Sumitomo had serious flaws in its office administration, the sources said.
Mitsui Sumitomo is likely to consider penalizing executives, possibly including Chairman Takeo Inokuchi and President Hiroyuki Umemura, who is scheduled to step down in any case, company sources said.
Toshiaki Egashira, the incoming president to replace Umemura, was expected to become chairman of the General Insurance Association of Japan. But he is now unlikely to assume the post.
The Mitsui Sumitomo case is the latest in a string of scandals in which Japanese insurers refused to pay legitimate claims or were found to have carried out other dubious business operations.
Earlier this month, Sompo Japan Insurance Inc. President Hiroshi Hirano resigned after the FSA imposed a two-week business suspension order on the company for similar reasons.
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|Publication:||Japan Weekly Monitor|
|Date:||Jun 26, 2006|
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