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

(Excerpt)

(Tuesday, September 12, 2023, 10:58 am to 11:10 am)

Q.

Let me ask a question about fraudulent claims made by BIGMOTOR. At a press conference that Sompo Japan held on September 8, Mr. Shirakawa, president of the company, announced his resignation. Behind that lies their disregard for protection of policyholders, among others, I suppose. What do you think of that? And would you please let us know what action the government would take, including on-site inspection or administrative action?

A.

I know that the other day, on September 8, Mr. Shirakawa announced his resignation. I should refrain from commenting on that, as it is personnel matters of an individual financial institution.
In any case, regardless of the announcement, the Financial Services Agency (FSA) has already decided to carry out an on-site inspection. Through the inspections, we will examine why and how the insurer solely started again to introduce their customers to the company and why and how they adopted such an irresponsible methodology for auditing claims, going into depth to find problems in their business management and internal control systems and identify the root causes. We will carry out an in-depth examination to understand what really happened. This policy remains unchanged.
In terms of when inspectors will start to personally visit their head offices and other sites, we are coordinating schedules with Sompo Japan and BIGMOTOR. I have been informed by the FSA staff that on-site inspections are set to start next Tuesday, on September 19, for now.
Regarding what action will be taken, including administrative action, as I have stated so far, if anything detrimental to the protection of policyholders is found, we will take strict action according to laws and regulations. There has been no change to this policy. According to what the on-site inspections may find, we will take strict action. That is what we have in mind.

Q.

Just to confirm, will you start on-site inspections on Tuesday, September 19, solely into Sompo Japan or into the two companies, together with BIGMOTOR? 

A.

We will start onsite inspections of the two companies on the same day.

Q.

They will visit the two companies on Tuesday, September 19.

A.

The FSA is coordinating schedules for that with them. 

Q.

You have said that on-site inspections are set to start on September 19. Do you have any plans to visit branches or business offices of BIGMOTOR? 

A.

I haven’t been informed by the FSA staff specifically where inspectors will visit.

Q.

The president of Sompo Japan has resigned. Is it correct that the FSA will also carry out examinations into Mr. Sakurada, Chair of the parent company, Sompo Holdings, and other parties concerned to make clear the responsibility of the management?

A.

That will depend on the findings of the inspections we are carrying out into Sompo Japan.
I understand Mr. Sakurada, Chair of Sompo Holdings, held a press conference the other day, stating that he would make a decision on his own responsibility based on findings of the review its third-party committee was carrying out. As I have said, our reviews are now underway and on-site inspections are set to start. So I should refrain from offering any comment before receiving findings of the inspections.
Through the on-site inspections into Sompo Japan, the FSA will conduct an in-depth examination to reveal all the facts about the case, including those about business management by Sompo Holdings, and what lay behind them.

Q.

The president of NEXTAGE, a company in Nagoya that turns out to have made fraudulent claims, announced his resignation last night. Hearing the news, I have gained the impression that the structure of the used car business, which also deals with insurance policies, may be responsible for the frequency of fraudulent transactions in the sector. Could you let us know what impression the news has given you, if any?

A.

I know the fact that the president and CEO of NEXTAGE resigned yesterday. I should refrain from commenting on that, as it is personnel matters of an individual company.
Generally speaking, when any inappropriate act is found in insurance solicitation by a non-life insurance agent, like the case of NEXTAGE, such as fabrication of insurance contracts, it is necessary for the insurer and the agent to inquire into the facts, examining whether their customers may have suffered anything detrimental to take appropriate action. That is our understanding.
For this case, the FSA will also carefully review their actions from the standpoint of policyholder protection. Then, if anything detrimental to the protection of policyholders is found, we will take strict action according to laws and regulations.