A total of about 130 executives at four major Japanese property and casualty insurance companies will take up to 50 percent pay cuts for colluding to fix prices in contracts with corporate customers and government agencies, the companies said Thursday.
The four insurers also submitted business improvement plans the same day to the Financial Services Agency following its order to improve their operations over price fixing.
Tokio Marine Holdings Inc. said Shinichi Hirose, president at its Tokio Marine & Nichido Fire Insurance Co. unit, will take a 50 percent cut in his monthly salary for three months.
The unit will also reduce chairman Satoru Komiya's monthly pay by 30 percent for three months, with over 50 other executives also subject to similar punitive measures.
Sompo Holdings Inc. said that it will slash the monthly salaries of nearly 50 executives of its group companies including Chairman and Group CEO Kengo Sakurada by up to 50 percent.
Mitsui Sumitomo Insurance Co. and Aioi Nissay Dowa Insurance Co. also decided on up to 50 percent salary cuts for their presidents and more than a dozen other executives.
The four insurance companies said that they will sell their cross-shareholdings between them and their corporate clients worth about 6.5 trillion yen ($43 billion) as of March last year. The agency said contracts are determined by how deep the relations are with their clients through cross-shareholdings in some cases, impeding healthy competition.
The FSA in December ordered the four companies to improve their operations after finding they colluded to set insurance premiums for corporate customers and government agencies.
The scandal revolved around a type of insurance multiple insurers jointly underwrite. Insurance firms typically provide shared coverage for large customers such as big corporations to protect against incurring potentially large compensation claims individually.
