TOKYO -- Japan Post Insurance has charged thousands of customers double premiums for life insurance, according to recent allegations that could shatter the public's trust in the formerly government-run provider.
Reports broke Monday indicating that some employees failed to cancel old policies for certain customers who signed up for new ones, subjecting them to premiums for two separate insurance policies.
About 22,000 such incidents reportedly occurred for six months or more, spawning speculation that the staffers intentionally arranged the double premium charges in order to maximize signing bonuses.
This is not Japan Post Insurance's first scandal. Customers complained in recent years that they were unable to switch policies, but the company said it was not engaging in improper practices.
The latest scandal potentially represents a more serious offense. Laws governing the industry prohibit insurance providers from providing customers false information regarding policies, or recommending that customers switch policies while withholding unfavorable information. If staffers falsely told customers that they could not cancel the old policies, for example, then that would be illegal.
A big selling point for Japan Post Insurance is that its products are easily accessible through the country's numerous post offices, even for elderly customers. Nearly 30% of the company's customer base is 70 or older.
Japan's Financial Services Agency plans to investigate the insurer's sales practices and will consider measures to protect customers. Penalties on Japan Post Insurance have not been ruled out.
Company President Mitsuhiko Uehira and Kunio Yokoyama, president of parent Japan Post Holdings, look to hold a news conference as early as Wednesday to address the issue.