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

(Excerpt)

(Friday, September 29, 2023, 11:46 am to 00:06 pm)

Q.

Let me ask about the suspicion of a cartel allegedly formed by non-life insurers. I understand today is the deadline for a report they were ordered by the FSA to submit. Media reports revealed that they had coordinated between them on an extensive scale before negotiating with customers. Would you please show us what facts the FSA has established so far, and from what standpoint you will carry out fact findings? Could you let us know the course of action?

A.

As you point out, several major non-life insurers are scheduled to submit a report to us today, on Friday, September 29, about the alleged coordination between them for premiums.
Your question is about what facts we have ascertained so far, if any. However, I should decline to make any comment about that as we have yet to receive any reports from them. We must carefully examine their reports and confirm details of what is stated there through interviews and other procedures to be held.
You also asked from what standpoint we will carry out fact findings. We should examine how prevalent the practices of coordination for premiums have been. At the same time, focus should be placed on, for instance, whether they were aware that their practices were illegal and inappropriate and acted knowingly, whether sales representatives acted for the coordination solely at their own discretion or their supervisors were also involved, and whether any appropriate setups for business administration and operation were in place, when we work to find what really took place and carry out analyses to identify the actual cause of the malpractice.
In any event, insurers need to develop a scheme for compliance with laws and regulations, including the Anti-Monopoly Act, and work appropriately for the protection of policyholders and other stakeholders. If any problem is found in these respects, we will take strict action according to laws and regulations.

Q.

May I ask one more question about what you have mentioned? Would you let us know whether you are considering carrying out on-site inspections?

A.

We have not yet decided whether to carry out on-site inspections.
The FSA expect that we will receive reports from the insurers today as scheduled. We must first carefully examine what they state in the reports, before considering, based on findings from the examination, what appropriate action we should take next.

Q.

Let me ask a question of you as Minister of State for Financial Services. The Council of New Form of Capitalism Realization met this week, and the Prime Minister formally instructed them to prepare a policy plan to establish Japan as a leading asset management center by the end of the year. I understand substantial work for the preparation is underway, going forward now. So, would you let me ask you specifically what will be placed on the agenda for the work?

A.

As you point out, at a meeting of the Council of New Form of Capitalism Realization, held on Wednesday, September 27, Prime Minister Kishida gave us an instruction that a policy plan to establish Japan as a leading asset management center should be prepared by the end of the year, and that I should play a central role in that work.
I understand that a virtuous cycle of growth and distribution can be realized only through reforming the asset management industry, a sector helping households manage their financial assets as part of their business, and the ownership of assets to improve their management capabilities and governance.
We also need to promote new entrants into the industry and encourage competition there by amending business practices unique to Japan or enhancing support for new entrants.
At a sub-council for establishing Japan as a leading asset management center, to be set up soon under the Council of New Form of Capitalism Realization, I, as Minister for Financial Services, should like to play a central role to take discussions forward.
Some of the possible policy measures require examination into the financial system. So, a separate task force is set up under the Financial System Council to deal with asset management, and the first meeting will be held on October 3.
For preparing a policy plan to establish Japan as a leading asset management center, we will work with experts and academics, as well as ministries and agencies concerned, and examine specific policy measures. 

Q.

Is it the sub-council under the Council of New Form of Capitalism Realization that meets for the first time on October 3? 

A.

No. The Task-Force under the Financial System Council of the FSA holds the first meeting, as the issue has something to do with the financial system.

Q.

Would you please let us know who you expect to be members of the sub-council?

A.

I understand when the sub-council meets for the first time and who constitutes the membership will be announced by the Cabinet Secretariat, its sponsor, as soon as determined.

Q.

In relation to that, let me ask questions about the special business zone for asset management. In his address, the Prime Minister declared the establishment of special zones for asset management. In Japan, four local governments have already started to carry out policy programs as urban financial centers. Some may see them as promising for the new initiative. Can they really be selected as specific candidates for special zones? And can specific locations be designated as a special zone by the end of the year? Would you please answer the questions? 

A.

The Prime Minister made the declaration in New York last week. We would like to establish special zones for asset management to intensively develop business and living environments for the asset management industry as part of our effort to encourage foreign asset management firms to enter the Japanese market.
We will prepare specific policy programs in cooperation with ministries and agencies concerned, while asking a diverse range of people for opinions and suggestions. Among the programs could be deregulation, such as handling of the formalities by the financial authorities in English and simplification of the process, and cooperation with local governments for enhancing financial services and using English and other foreign languages in providing educational and other public services. We are going to adopt policy programs from a broad viewpoint.
You also asked about where special zones could be situated, but specific locations are yet to be determined. We will work with aspiring prefectures and municipalities to establish special zones.