2 Japan Post Units to Get 3-Month Biz Suspension Order
Tokyo, Dec. 21 (Jiji Press)--The Financial Services Agency plans to order Japan Post Insurance Co. <7181> and Japan Post Co. to suspend part of their operations for three months over improper sales practices for the former's insurance products, it was learned Saturday.
The administrative punishment, expected to be announced next Friday, comes as the Japanese financial regulator believes that there are serious flaws in the internal control systems at the Japan Post Holdings Co. <6178> units, informed sources said.
The FSA will also issue a business improvement order to the two companies and demand that they clarify the management responsibility over the sales irregularities, the sources said. It also plans to urge the parent company to shape up, following its failure to properly control the subsidiaries.
The business suspension order for the two units will cover new customer solicitation activities for and sales of Japan Post Insurance's "Kampo" insurance products, the sources said. The agency believes that a significant suspension period should be set to prevent a recurrence of the malpractice.
Meanwhile, Japan Post Co. will likely be allowed to continue sales of insurance products of other insurance companies, as well as its mail and savings services, as usual, the sources said.
[Copyright The Jiji Press, Ltd.]