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

(Excerpt)

(Tuesday, March 12, 2024, 9:36 am to 9:44 am)

Q.

I would like to ask a question about matters related to fraudulent insurance claims made by BIGMOTOR. Would you let us know about the Financial Services Agency (FSA)’s opinion regarding how insurance companies that failed to guide their agencies appropriately can manage them properly in the future, and what measures they should have taken? Also, please let us know about the progress in the Sompo group’s business improvement plan.

A.

I will answer the second part of your question first. The deadline for Sompo Japan and Sompo Holdings to submit their business improvement plans is Friday, March 15. So far, their plans have not been submitted yet.
The FSA is currently talking with both companies about the planning process, so that their business improvement plans cope squarely with the problems pointed out in the business improvement order, including inquiring into their causes. 
Your first question is what measures insurance firms need to take in order to manage their agencies appropriately in accordance with their plans, and as you pointed out, we believe that one of the reasons for BIGMOTOR’s fraudulent claims was that the management of insurance agencies by Sompo Japan was inadequate.
As publicly announced when we issued a business improvement order to Sompo Japan in January of this year, behind this were mainly a characteristic problem of BIGMOTOR, as an entity that operated both a non-life insurance agency and an auto-repair shop, and the insufficient awareness of compliance risks that arose from the business model and management strategy depending on such characteristics.
Taking into account factors such as the facts that have been ascertained so far and the content of business improvement plans to be submitted by March 15, we will consider properly what measures non-life insurance companies need to take to manage their agencies appropriately. We will also discuss how insurance agencies should effectively be managed and supervised in the future, as well as what systems should be put in place to that end so that similar incidents do not occur again.