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

(Excerpt)

(Friday, September 1, 2023, 11:16 am to 11:51 am)

Q.

I would like to ask about fraudulent claims made by BIGMOTOR. Non-life insurance companies have reported to the Financial Services Agency (FSA) about business transactions they have had with the company. To clarify the whole picture of the case, what will the FSA focus on in the review? Would you please tell us what principle will guide you there?

A.

The FSA received reports yesterday from non-life insurers about fraudulent claims made by BIGMOTOR according to the order we had issued them to do so.
In their reports, the six insurers other than Sompo Japan explain who of their customers received damage from fraudulent claims made by BIGMOTOR and how they have responded to the victims. We will review the reports carefully to see whether they are acting for the customers appropriately.
In addition to what appropriate action they are going to take to compensate for the damage their customers received, Sompo Japan also reports what they recognized as a fact about this issue, all the facts about employees they loaned to BIGMOTOR, and why they solely started again to introduce their customers.
Now, we will review carefully whether they are responding to the customers appropriately, as well as whether they have fully confirmed all the facts about this event and realities of their system for detecting and preventing fraudulent claims, whether they have performed an analysis to find why they failed to prevent the series of deceptions, and whether they have formulated appropriate measures to prevent any similar practice.
Based on findings of the careful review of the reports, the FSA will examine what statutory action we should take, including whether we must carry out an on-site inspection according to laws and regulations. After the work to establish all the facts, if we find anything detrimental to the protection of policyholders in their fraudulent practices, the FSA will take strict action according to laws and regulations.

Q.

In terms of BIGMOTOR, you say that having received a report, the FSA is starting a careful review. Specifically for the company, you will scrutinize a range of responses they made in the report before considering whether to conduct an on-site inspection, won't you? This problem is attracting so much attention as it is obvious to anyone that Sompo Japan loaned to BIGMOTOR such a large number of employees, including executives, who knew full well that the company was making fraudulent claims and tolerated them in practice. The price is paid by individual policyholders. All the policyholders of Sompo Japan, other than those introduced to BIGMOTOR, are forced to cover the cost. That is the framework of this event. The insurer is unreasonably lenient and perfunctory when auditing claims made by an enterprise while the cost is shifted to individual policyholders. That is the framework, I suppose. What do you think of the point, the general framework? That is the first question.
Let me ask one more question. You say the FSA is now making preparations to consider whether to carry out an on-site inspection. A month or almost two have passed since their fraudulent practices came to light. I am afraid that evidence of their malpractice will soon be lost. In this respect, the FSA seems to move too slowly. Do you think the FSA is working quickly enough? Would you let me know your own perception?

A.

In principle, when any problem, anything detrimental to the protection of policyholders is found, we must take strict action according to the law, which I must say first.
On that premise, we can act strictly only after carefully examining all the facts. We cannot act before all the facts are made clear. The FSA received a report yesterday. I understand what we must do first is to review the report carefully.
Then, we must consider whether we are acting quickly enough. We will not waste time. However, we also have to say that it takes a certain amount of time to carry out a rigorous review.
Anyway, it is the confidence of the people in the non-life insurance industry that is at stake here. That is why we must review the report very carefully and, I must say again, if we find anything detrimental to the protection of policyholders, the FSA will take strict action.

Q.

Indeed, confidence of the people in the non-life insurance industry is at stake, and that is a critical point, I suppose. In this respect, based on what Sompo Japan has reported and the FSA has found in its inspection, the insurer may have been unreasonably lenient to enterprises in their business, in general, ... in comparison to individual policyholders....;  do you think so yourself?

A.

We have just started a review based on the report we received yesterday. We must conduct a thorough examination before we, the FSA, form a judgment.

Q.

Let me ask about public funds for Kirayaka Bank. Some media have reported that the FSA has decided today to inject public funds into Kirayaka Bank, and that the bank will hold a press conference today. Is that the case? The bank has made a request for public funds more than once. Would you please give your view on the state of affairs?

A.

Generally speaking, when the FSA receives a request for capital participation, the FSA carries out a review based on requirements prescribed under law, such as whether it is helpful to revitalize the local economy, and in reference to opinions delivered by the Examination Board for Strengthening of Financial Function.
Only after receiving findings of the review, the FSA is ready to decide whether to give a capital injection. The procedures must be strictly followed.

Q.

Let me ask another question about BIGMOTOR. Have you received any briefing about the reports from the FSA? Your comments about Sompo Japan are getting harsher for every press conference, aren't they?

A.

Details of the report are now being carefully examined at the clerical level. Once certain progress is made through the work, I should receive briefs in a timely manner, even before the final conclusion is reached.