The Financial Services Agency said Wednesday it has reprimanded Nippon Life Insurance Co. for improper cancellation of its insurance policies and has given it a business-improvement order.
The FSA said a Nippon Life Life employee altered the expiration dates on 105 insurance policies and later canceled them improperly over a nine-year period through 2005.
The agency has ordered the company to submit a plan to improve its governance by Aug. 25.
The improper cancellations have caused Nippon Life to pay out 204 million yen in insurance claims for 28 people who accepted its offer to restore their policies, the agency said.
The insurer also miscalculated the late fees it pays to its policyholders, resulting in a 585,000 yen deficit in more than 330 cases over the past four years, the FSA said.
The agency said Nippon Life made the errors because it did not have a comprehensive checking system done by third parties or proper employee training.
The agency ordered Nippon Life to improve payment oversight and staff management, including more frequent staff rotations, saying that the employee responsible for the improper policy cancellations had held the same position for 16 years.
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