Japan Post Co. confirmed last Wednesday, August 21, 2019, that it improperly sold an approximate number of 104,000 insurance policies in the United States. The insurance policies were made on behalf of the insurer’s partner in the country, Aflac Inc. In total, the number of insurance policies mis-sold by the company amounts to 287,000.
According to Japan Times, the insurer reportedly sold Aflac policies at numerous post offices around the country. As a result of these mis-sold coverages, individuals who availed contracts under the said business were left uninsured. Meanwhile, other people were charged for what they originally availed.
Following this, the Japanese insurer stopped selling life insurance products in late July. However, the insurer continued selling Aflac products, specializing in cancer insurance coverage, as an exception. Aflac was contracted by Japan Post to continue their partnership last December of 2018, extending the business partnership initially signed in 2013, states Japan Times.
While Aflac’s guidelines clearly state that those new customers will not be insured for three months after purchasing new policies from them, the Japanese insurer failed to upgrade its rulings in its computer system. This resulted in the duplication of payments and the loss of temporary coverage.
Insurers say the problem is slated to be fixed come October 2019.
After Japan Post Co.’s additional revelation last Wednesday, Aflac’s shares on the market plummeted to 4.3%. Each share sold for $49.62, noted Market Watch. Likewise, the news site reports that stocks from the Japanese insurer went down by 22% following the series of scandals.
In light of these issues, Aflac said in a statement that it will be “conducting a rigorous, voluntary review of postal channel sales. Should we become aware of any practices that are inconsistent with our compliance standards, we will take the necessary action and steps to address it immediately.”