Press Conference by SUZUKI Shunichi, Minister of Finance and Minister of State for Financial Services

(Excerpt)

(Tuesday, September 5, 2023, 10:21 am to 10:29 am)

Q.

I understand the FSA has notified BIGMOTOR and Sompo Japan that on-site inspections will be carried out on them. Having received their reports, from what viewpoint did the FSA determine that on-site inspections should be conducted? Would you please explain that?

A.

As you have pointed out, we decided yesterday to conduct on-site inspections under the Insurance Business Act on BIGMOTOR and Sompo Japan regarding their fraudulent claims, and informed them of the decision immediately.
Regarding BIGMOTOR, we found some problems concerning their basic practices for insurance solicitation in the report submitted on August 31. As we considered it necessary to examine further to confirm all the facts, including why the state of things as described in the report had been left uncorrected, we concluded that an on-site inspection needs to be carried out. At the inspection, we will go into depth to find problems in their business management and internal control systems to determine whether there was any problem in the arrangements they made for regulating their own insurance sales, so that we can identify the root causes.
Meanwhile, Sompo Japan submitted a report on the same day, August 31, which brought to light a certain range of facts about employees the insurer loaned to BIGMOTOR, how they solely started again to introduce their customers to the company, and how they adopted such an irresponsible methodology for auditing claims. However, the case is still under examination by a third-party committee set up by its parent company, Sompo Holdings. As there are some facts left unclear, more in-depth verification is needed. That is why we have determined that we should carry out an on-site inspection. At the inspection, we will dig deep to find problems in their business management and internal control systems to determine whether there was any problem in their responses to the case, so that we can identify the root causes.

Q.

Do you mean the FSA will carry out an on-site inspection on Sompo Japan, assuming that the management may have formed part of the problem?

A.

Yes, exactly.

Q.

When will on-site inspection begin?

A.

The process of the on-site inspection has already started as the two companies were informed yesterday. When inspectors will visit them, or the day inspectors will actually visit their head offices and other establishments for inspection is yet to be determined. Generally speaking, the first date of visits for an inspection is set at a day when both inspectors and those to be inspected will have made preparations. In reference to past records, we suppose it will take 10 to 14 days for preparations, from the first day of inspection, yesterday in this case, through the day inspectors will visit their establishments. As in past cases of inspection, I suppose inspectors will visit their offices sometime around then.

Q.

Let me ask one more question about BIGMOTOR. Once the on-site inspections are finished, you may consider handing out an administrative action on the company. Would you tell us from what viewpoint you, as Minister of State for Financial Services, will make a decision about administrative action?

A.

As to from what viewpoint, I should give you the same answer as the one I gave to the first question.
Anyway, on-site inspections enable us to go further in depth with the examination than what we know from the reports from them. In the inspections, we will make more detailed examinations, with a focus on the issues we have in mind, those that I have just mentioned. Then, if we find anything violating the law in their practices, we must take strict action.