Provisional Translation

Q.

You have made it clear that you do not accept the Financial System Council’s report as being official. The opposition parties have voiced criticism on this move. With the House of Councillors election having begun, I’d like to hear your comments on how voters are reacting to this.

A.

I believe you asked me this same question a while ago, before the opposition parties made their statements. In any case, the release of an averaged value has caused concerns to spread throughout society, such as if 10 million yen will be necessary, or if 20 million yen will be necessary, or if there will be some shortage from month to month. In that sense, I took what I considered to be necessary corrective measures to assuage those concerns. While there is a range of opinions, I believe that we must continue to provide thorough explanations regarding that issue.

Q.

My question is related to the misselling of Japan Post Insurance. Since 2016, there have been 22,000 cases where customers paid for both their old and new insurance premiums when switching to new contracts, and 47,000 cases where customers were temporarily uninsured. We heard a report of the story today, covered by the Nishinippon Shimbun newspaper. The cause is believed to be that the postal workers in charge of the contracts intentionally delayed cancellations in order to conceal the facts about switch-over contracts. This would allow the post-office workers who sell insurance to receive credit when making the new contract, and we’re heard that this practice was rampant within the company. As Minister of Financial Services, I’m sure you must have a full understanding of the situation, is that correct? Has there been a report or other such release of information from Japan Post Insurance?

A.

I refrain from making comments on issues related to particular individual financial institutions. However, speaking in general about insurance companies, I doubt it could be considered fair when an insurance agent damages the benefits of the insurance policyholders and trust. And when the FSA receives such information, we get to know the precise picture through hearings and other methods. The appropriateness of the insurance sales business is at issue here, and if that is confirmed to be a problem, first we look at the cause. If we think that improvement measures are needed, we ask the company for an explanation, and urge to make the necessary improvements. The FSA will deal this in an appropriate manner based on that line of thinking.

Q.

As the details are not yet fully known at this point, are we to understand that you will be conducting a thorough investigation?

A.

It’s difficult to define the details. However, the information is obtained in small pieces, so we’ll have to properly put together all the information before proceeding.

Q.

In this case, the customers suffer detriments for the benefit of the agents. There is strong suspicion that this constitutes a violation of the Insurance Business Act. While this is an individual case, what is your opinion at the present point?

A.

There are a variety of cases. Did this happen because of the system, or was it done by the individual agents? Did the office do it, or did a specific person do it? We won’t be able to answer these questions until we have a grasp on the entire picture.

Q.

About the Japan Post Insurance issue, the most obvious concern appears to be the situation for the customers. Since some years ago, from the time of Commissioner Mori, the FSA has pursued a thorough customer-oriented approach, called fiduciary duty. However, do you feel that an occurrence such as this indicates that the customer-orientated approach has yet to completely take hold, particularly at the points furthest from the center of governance?

A.

That would depend on the way of thinking of a given bank and the people in charge. However, I think there probably isn’t any company that says they conduct business in a manner that is not customer-oriented. In any case, since this kind of financing involves being in charge of other people’s money, if they don’t think from a customer-oriented perspective and provide protections for end users, the staff must receive education on how to properly respond to the task. That must be done thoroughly, although in many cases, I think, they just get the job done one way or another due to tight sales quotas. In any case, in a financial sector where trust is critical, I doubt that the practice in question could be considered fair.