INDEFINITE MEDICAL BAN ON MITSUI-SUMITOMO

The Japanese Financial Services Agency yesterday imposed its toughest penalty yet on an insurer when it banned Mitsui-Sumitomo Insurance indefinitely from selling medical insurance, until it can show improvements in its infrastructure. The FSA found that between fiscal 2002 and 2005 Mitsui-Sumitomo Insurance failed to pay ¥166m in so-called “third-sector” policies. Whole-of-life medical policies made up 15% of all non-payments. In total the insurer was found to have failed to pay some 45,000 claims worth ¥2.82bn. The insurer has also been banned fro selling any non-life policies for two weeks from July 10. No new products will be authorised for a year and no new overseas bases can be established for three months. Separately, the insurer has been issued with a business improvement order to make clearer the responsibility of senior management and to strengthen internal oversight. At a news conference yesterday Mitsui Sumitomo President Hiroyuki Uemara apologised for the company’s actions. He and chairman Takeo Inokuchi have withdrawn their scheduled appointments to senior consultancy positions within the company. Incoming president Tosjiaki Egashira said that he would not be taking on the post of chairman of the General Insurance Association of Japan.