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

(Excerpt)

(Tuesday, August １, 2023, 11:06 am to 11:18 am)

 

Q.

Regarding the BIGMOTOR scandal, what kind of problems do you see in the non-life insurance companies and BIGMOTOR respectively? Also, how does the Financial Services Agency (FSA) deal with non-life insurance companies and BIGMOTOR at present, and how will it respond them in the future?

A.

Yesterday, we issued an order requiring BIGMOTOR and seven non-life insurance companies that delegated insurance sales to BIGMOTOR to submit reports based on the Insurance Business Act in order to thoroughly ascertain the facts surrounding BIGMOTOR, including the collecting facts of the cause.
At the FSA, we will first confirm whether there were any problems with BIGMOTOR's system for insurance sales as an agent, taking into account concerns that there may be deficiencies in internal controls required by the Companies Act.
In addition, we will check with non-life insurance companies about customers who have been affected by BIGMOTOR's fraudulent activities and how it has responded to them.
Regarding Sompo Japan Insurance Inc., one of the seven non-life insurance companies, as the company announced yesterday, the FSA will confirm with it about appropriate damage-recovery measures for customers, its knowledge of the facts concerning this case, the facts concerning the personnel seconded to BIGMOTOR, and the circumstances surrounding why only Sompo Japan resumed customer referrals.
As a result, if we find that there are problems lacking in policyholder protection related to a series of fraudulent activities, we will take strict measures based on laws and regulations.

Q.

I would like to ask something in connection with the opening question. With respect to the order requiring a report, how long is the deadline for submitting the report? Also, I think there are concerns about corporate governance issues and preservation of evidence regarding BIGMOTOR and especially Sompo Japan. What do you think about the necessity of on-site inspections?

A.

Firstly, I understand your questions are about the content of this order to request a report and about the reporting deadline. To reiterate, we have concerns regarding BIGMOTOR’s possible deficiencies in the internal controls and will confirm with it about the overall picture of inappropriate behavior and its causes, including whether there were any problems in the system for insurance sales, and also request it to submit a report on measures to prevent recurrence.
As a result of the fraudulent activities by BIGMOTOR, there is the possibility that customers may be disadvantaged in the form of an excessive burden of insurance premiums. Therefore, we will check with non-life insurance companies about their customer damages and measures to recover damages. And as I mentioned earlier, we would like to examine Sompo Japan from a different perspective.
As for the deadline, we have just issued the order, on July 31, so I don't think we should currently mention the deadline.
And about the possibility of an on-site inspection, we will first check the content of the report from BIGMOTOR. After confirming that, we need to make a decision on what legal action to take, if necessary. Therefore, we are not in the phase to give a definitive answer on whether to conduct an on-site inspection or not.

Q.

Regarding the topic of BIGMOTOR, I would like to ask the Minister of Finance and the Minister of State for Financial Services. Has the Local Finance Bureau conducted a voluntary interview with the non-life insurance agent about the suspected fraudulent activities? Didn't the bureau find any signs of fraudulent acts by BIGMOTOR?
And hasn’t the FSA received any reports of fraudulent claims from insurance companies? Please tell us what effective measures have been taken so far through cooperation between the FSA and the Local Finance Bureau for insurance services provided by BIGMOTOR, which operates agency services on a nationwide scale.

A.

Generally speaking, the Local Finance Bureau, which has been delegated by the FSA, monitors non-life insurance agents and the FSA monitors insurance companies on a daily basis, including hearings. I received a report that we have conducted general monitoring on BIGMOTOR and insurance companies that delegated insurance sales to BIGMOTOR.
However, it is also true that it was not possible in this general monitoring to find any signs of this series of fraudulent activities at BIGMOTOR.
In response to this, we issued an order to request a report yesterday, and we would like to proceed with the fact-checking right now, hear from the Local Finance Bureau, and confirm what reports there are from insurance companies to the FSA.