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

(Excerpt)

(Tuesday, October 10, 2023, 11:00 am to 11:21 am)

Q.

I would like to ask about the Financial Services Agency (FSA)’s awareness of problems under the compulsory automobile liability insurance system. Please tell us about the FSA’s current awareness of problems with the role compulsory automobile liability insurance played as a tool to deepen inappropriate relationships between insurers and BIGMOTOR. Meanwhile, have you requested both companies to submit a report on the compulsory automobile liability insurance system from your standpoint as the FSA?

A.

In the on-site inspections currently under way at Sompo Japan and BIGMOTOR, we are striving to ascertain the actual condition of the series of fraudulent claims for insurance money and analyze their real causes.
During these inspections, we will examine whether there were inappropriate relationships between the two companies over compulsory automobile liability insurance as you have just pointed out, whether such relationships affected fraudulent claims, and to what degree they did so. We plan to examine those issues, but so far, we have not reached a point where we can talk about details of inspections and evaluations of their results.
The FSA will ascertain the actual condition of BIGMOTOR and Sompo Japan in depth, and if any problem is found based on the results of the on-site inspections, we will take strict measures according to laws and regulations. We will also request the two companies to formulate effective measures to prevent the recurrence of similar problems that are to be implemented and follow up on them appropriately.
I know that the General Insurance Association of Japan is considering a number of measures to prevent the recurrence of similar problems. Taking the current incident into account, for example, some non-life insurers are also aware of problems with customer referrals to particular repair shops, serving also as insurance agencies, after the automobile accidents. And so they are reviewing this practice and considering systems that enable users to choose a repair shop they want to use. That is what I understand.
We will work with the General Insurance Association and other organizations to consider effective measures to prevent the recurrence of similar problems while referring to these initiatives of various companies.

Q.

Let me ask two questions. One is about Sompo Japan as you mentioned just now. At your previous press conference, you said that this problem might impair the trust of all non-life insurance users, and that is the most important part of the problem for many people or consumers. On-site inspections have just started, and you actually mentioned customer referrals to repair shops. Owing to the incident involving Sompo Japan, many people have doubts about non-life insurance and suspect that eventually individual users will pay the price of this incident. When you look at the entire problem, what is your opinion on this point?

A.

As you mentioned, this incident is not limited to BIGMOTOR and Sompo Japan. This incident may cause people to have some doubts about the non-life insurance industry. We will take this opportunity to ask non-life insurers to devise appropriate measures to prevent the recurrence of similar problems and take other actions in the future in order to remove such doubts, and there are now such moves among the companies, including establishing various systems. Sompo Japan has set up a third-party investigation committee. The General Insurance Association is also moving to review the current practices and make improvements taking into consideration the various events that have recently occurred.
Therefore, the basic policy of the FSA is to follow up on such moves properly and take strict measures appropriately according to laws and regulations if the benefits of the insured are violated under laws and regulations.

Q.

This morning, outrage occurred to the system of the Japanese banks’ payment clearing network Zengin Net, preventing some transactions from being conducted. Did you receive a report on this incident? If you did, please tell us about the government’s response, if any.

A.

I have not received such a report.

Q.

My question is partly related to the question already asked and concerns fraudulent claims for insurance money. Some news reports say that the outside investigation committee set up by Sompo Japan will submit an interim report today at the earliest. The FSA is already conducting on-site inspections, etc. I want to ask you how the results of this investigation are positioned in the future policy for inspections and decisions on administrative actions to be imposed, and whether the FSA knows the schedule for their publication.

A.

I know that there have been news reports saying that the outside investigation committee established by Sompo Holdings may publish an interim report in the near future, but so far, Sompo Holdings has not taken actions such as publicly announcing the publication of an interim report. Therefore, we cannot make a clear comment.
Through on-site inspections, the FSA is conducting in-depth investigations of the actual condition at Sompo Japan, moving closer to problems that lie behind the firm’s management and administrative systems and internal control systems. Specifically inspections cover facts about employees seconded to BIGMOTOR as well as the circumstances under which only Sompo Japan resumed customer referrals, and a simple method for claims investigation was introduced. In this process, we will compare the results of these inspections with findings such as the series of reports submitted so far.
In any case, if a report is submitted by the outside investigation committee, we will also closely examine it.