Nippon Life Insurance: Theft of Internal Information Flouts Laws and Regulations

Editorial

15:59 JST, September 17, 2025

For being Japan’s largest life insurance company, isn’t its awareness of legal compliance too weak? The insurer should work to implement measures to prevent a recurrence and adopt a stance that thoroughly puts the customer first.

Nippon Life Insurance Co. has said that 13 employees who were on loan to seven sales agents, including MUFG Bank, took internal information from the host companies without permission, including insurance sales strategies and product information about other life insurers. From May 2019 to February this year, there were 604 cases of such information theft.

The information taken by the loaned-out employees was shared with Nippon Life’s head office and used to sell the insurer’s products. They did not obtain permission from their superiors at the host banks, raising concerns that this could violate the Unfair Competition Prevention Law, which prohibits the infringement of trade secrets.

In the insurance industry, about 30% of insurance products are sold through agent contracts with financial institutions such as banks.

With the arrival of a “world with interest rates,” insurance products are growing increasingly important for asset management among senior citizens. This is an era when customer-focused sales practices are more sought after than ever before. It must be said that taking information in an inappropriate manner shows little concern for the principle of putting the customer first.

Banks act as agents that enter into a contract with several insurance firms to handle their products. The Insurance Business Law requires such agents to provide explanations for multiple products without pushing specific ones on customers, while giving careful consideration to their preferences.

Didn’t Nippon Life use the host banks’ counters to favor the sales of its own products? The insurer may also have violated the rule of selling the most suitable products, in line with what benefits customers.

The host banks’ internal documents explicitly stated that taking information to outside parties was prohibited. It is egregious that despite this, the loaned-out employees sent the information to Nippon Life’s head office through such means as the Line free communication app.

Furthermore, 23 employees who received the internal information at the head office expanded the range of the sharing to up to about 270 people, including executives, and explicitly stated in documents: “Strictly prohibit backflow [to the host banks].”

Why did no one speak up despite this problematic information-sharing becoming the norm? Nippon Life needs to strengthen internal education.

The insurer apologized over this issue at a press conference, with an executive saying the company “takes it seriously.” Strict disciplinary actions must be taken to prevent a recurrence.

MUFG Bank and Mizuho Bank have decided to stop accepting employees seconded from insurance companies. It is a quite natural step if this practice has become a hotbed of actions that disregard laws and regulations.

In response to a spate of scandals in the insurance sector, the Financial Services Agency intends to implement structural reforms to strengthen its supervision of the industry. It is urged to make a thorough investigation into Nippon Life and take strict action.

(From The Yomiuri Shimbun, Sept. 17, 2025)