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

(Excerpt)

(Tuesday, September 19, 2023, 11:03 am to 11:16 am)

Q.

I understand the Financial Services Agency (FSA) has started the on-site inspection into the two companies, BIGMOTOR and Sompo Japan. Would you let me ask again what you will examine through the inspection? And what action are you going to take then, especially when will you hand down any administrative action based on findings of the ispection?

A.

As you have pointed out, inspectors have personally visited BIGMOTOR and Sompo Japan today to start on-site inspections, which I have been informed of by the office in charge.
Through the on-site inspection of BIGMOTOR, the FSA will examine what we have mentioned so far as key points for an on-site inspection. That is, as the company has turned out to have problems in their basic practices for making insurance solicitation and claims, we will work further to ascertain all the facts about, for instance, why they have been left unchecked, going into depth to find problems in their business management and internal control systems, so that we can identify the root causes.
For Sompo Japan, we will examine facts about employees the insurer loaned to BIGMOTOR, the background why only Sompo Japan resumed customer referrals, and why and how they adopted such a simplistic methodology for claims investigation, among others, going into depth to find any 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. As part of the investigation, we will also verify the progress of their work for developing measures to detect fraudulent insurance claims made by BIGMOTOR and prevent any similar cases to occur.
In terms of the period of the on-site inspection, how long the inspection will take, generally speaking, depends on any new facts that come to light there and a variety of other factors. So, I must say it is difficult to give a specific answer to your question at the moment.
You also asked about the course of action we will take, including possible administrative action. I have stated so far that if anything detrimental to the protection of policyholders is found, we will take strict action according to laws and regulations. Nothing has changed in principle. So, we will take strict action based on our findings from the on-site inspection.

Q.

Is there any possibility that the FSA may carry out an on-site inspection of Sompo Holdings, the parent of Sompo Japan?

A.

That will depend on findings from the on-site inspection of Sompo Japan, which inspectors started today.
So, what action will be taken is not determined at the moment.

Q.

Today, the FSA visited BIGMOTOR for inspection. I suppose inspections of insurance agents have usually been carried out by Local Finance Bureaus. How do they divide the roles between them? Or why did the FSA carry out the inspection?

A.

Indeed, it is the FSA that carried out the on-site inspection today. The Agency decided to conduct an on-site inspection based on a range of things that have taken place or come to light so far, and a range of information, as well as what various departments and bureaus have found out through their interviews. The FSA will deal with things properly according to laws and regulations under its jurisdiction.

Q.

Let me ask about the on-site inspections of BIGMOTOR and Sompo Japan. I understand there are differences between the FSA and the police or Ministry of Land, Infrastructure, Transport and Tourism (MLIT) in the systems and purposes, which makes a simple comparison impossible, but in comparison with quick on-site inspections they conducted after having accepted reports of damage or other complaints, some say the FSA spent too long before they started the inspection, or that it is too late. Would you let us know what you think of about this opinion?

A.

I believe we must follow proper procedures in such cases. I understand MLIT has already conducted on-site inspections under their own jurisdiction. We started inspections on September 4, before starting on-site inspections today. It was September 4 when we started inspections. Individual ministries and agencies make decisions by themselves and so it is impossible to act in concert and decide to start on the same day. Our schedule has been arranged based on findings we have accumulated through our fact-findings so far. That is what I must ask you to understand.

Q.

BIGMOTOR is radically changing its management regime as seen in the relocation of its head office from Roppongi Hills to one of its shops in Kanagawa Prefecture. There are some who wonder if the company may not survive. Doesn't any change in its management structure, including a transfer of ownership, influence the inspection?

A.

A relocation of the head office would be a management policy they are allowed to determine themselves. It is no immediate concern of ours. Inspections will not be closed merely for any change in the management regime. The affairs exposed now must be thoroughly examined to prevent any similar cases to occur. That is what we shall do for protecting the interests of consumers and policyholders, I suppose. We must carry through, so that nothing like this will be allowed to take place again. What is most important for that, I believe, is to inspect BIGMOTOR and Sompo Japan and bring to light what really happened. I am determined to carry the work through wherever they may move the head office to.

Q.

BIGMOTOR is suspected of having violated various laws, and different ministries and agencies concerned are dealing with the company in different ways for that. How closely are they working on a government-wide basis to coordinate or share information between them for the BIGMOTOR problem?

A.

At present, I understand that ministries and agencies concerned are currently examining whether BIGMOTOR violated any laws and regulations or committed any inappropriate act.
When they take any legal action, which may be administrative action or something like that, they must act according to the law under their own jurisdiction. At the moment, none acts on the assumption that they should work as one in dealing with the problem. That’s how I understand it.