The Financial Services Agency (FSA) has ordered Japan’s major non-life insurers to report on cases where any employees seconded to insurance agencies shared policyholder information with their primary employer.
Sompo Japan and Tokio Marine & Nichido Fire Insurance announced on Tuesday they had received the order from the FSA, with Nippon reporting that Mitsui Sumitomo and Aioi Nissay Dowa had also received the orders.
Sompo Japan said some employees who had been assigned to insurance agencies leaked information on clients of other insurers to the company.
The issues occurred at nine different insurers, with approximately 2,700 sets of policyholder information leaked from Tokyo-based insurance agent Total Insurance Service.
Information on 1,518 fire insurance policyholders with loans for investment condominiums was leaked from Hoei Co., an insurance agency based in Yokohama, Kanagawa Prefecture.
The FSA directive is the latest following a difficult year for Japan’s non-life insurers amid heightened scrutiny over their operational practices.
In February, Sompo Japan Chairman Keiji Nishizawa became the latest in a series of high profile resignations at the group, following a fraudulent insurance scandal involving used-car dealer Bigmotor. The FSA had found fault in the insurer’s internal processes and problems with its continued relationship with the used-car dealer despite being aware of the fraud allegations.
All four major non-life insurers have also faced scrutiny for colluding to fix prices for corporate policies. Site inspections conducted by the FSA and Fair-trade Commission found that their conduct and practices had been inappropriate. The insurers were served with business improvement orders requiring operational improvements and other penalties, including temporary cuts in executive pay and the divestment of cross-held shares.
In May, the four major non-life insurers admitted to sharing policy information of motor customers. And in June, Sompo was again under fire after an investigation uncovered it had prearranged premiums with other non-life insurers for 385 corporate clients.
The series of incidents led Keisuke Niiro, Chairman of the General Insurance Association of Japan, to state in his one-year address that “Restoring trust has been [the industry’s] most urgent issue.”
“We are only halfway to restoring society’s trust in our industry. We must work tirelessly to quickly develop an appropriate competitive environment and ensure discipline in our activities,” Niiro added.
