The Ministry of Health and Welfare, the Financial Services Commission, and the Financial Supervisory Service said on the 16th that they will conduct a full survey of whole life insurance subscriptions at about 30,000 nonprofit long-term care institutions nationwide and will respond strictly if legal violations are found in the insurance solicitation process.
Earlier, a media outlet reported that some care facilities exploit whole life insurance to embezzle operating funds. After receiving consulting from a corporate insurance agency (GA; General Agency) that also operates as a tax firm, they pay whole life insurance premiums as facility operating funds, then change the policyholder to the representative and siphon off funds by receiving the surrender value, it said.
The Ministry of Health and Welfare will, within this month, reiterate to local governments nationwide and relevant associations its policy prohibiting subscriptions to whole life insurance for the purpose of retirement benefit accumulation, and will specify this clearly in the "Guidelines for Elderly Health and Welfare Projects."
The Ministry of Health and Welfare also plans to conduct an additional fact-finding survey from May on facilities with inappropriate whole life insurance subscriptions. If violations of financial and accounting standards are found as a result of the survey, it will issue corrective orders. If the corrective orders are not implemented, it plans to impose penalties up to cancellation of designation.