Sompo Japan has decided to stop selling new fire insurance policies through Tamahome, the homebuilder under suspicion of improperly claiming insurance payouts, NHK reported.
The insurer judged the situation serious and will end new sales through the builder. Policies already in force are not covered by the decision.
Suspicious claims have also been found at another Tamahome branch, and insurers are asking the company to confirm the details, NHK reported.
Tamahome is investigating all of its offices over the suspected fraudulent claims. Employees are suspected of filing several hundred improper fire insurance claims worth more than ¥20 million.
Claims handled where policies are sold
Selling insurance through a homebuilder puts the same company in charge of the sale and the paperwork behind a claim. That structure gives staff an incentive to inflate claims, rather than leaving it to a few individuals to cheat.
Ending new sales through Tamahome closes that channel for Sompo Japan. It does not by itself change how claims already filed are handled.