Japan to Amend the Insurance Business Act: Strengthened Oversight of Large Insurance Agents and Tighter Controls on Inducements
May 7, 2025
Key Words: Japan Insurance Business Act, FSA Amendment 2025, Specified Large-Scale Multi-Tied Agents, Insurance Governance, Compliance Frameworks, Dual-Service Agents, Auto Repair and Insurance, Inducement Prohibitions, Premium Rebates, Claims Assessment Oversight, Whistleblower Systems, Complaint Handling, Insurance Broker Regulation, Security Deposit Reduction, Consumer Protection in Insurance, Fair Competition in Insurance Markets.
I. Introduction[1]
Japan’s insurance industry is one of the largest globally, with life insurance companies reporting total premium income of approximately JPY 27.7 trillion in fiscal year 2023, and non-life insurance companies reporting about JPY 9.3 trillion in the same period.[2] This substantial market plays a critical role in the nation’s economy, providing financial security and risk management solutions to individuals and businesses alike.
In response to recent industry scandals—including fraudulent claims by Bigmotor[3] and premium adjustment practices among major non-life insurers—the Japanese Cabinet approved a bill in March 2025 to amend the Insurance Business Act. The proposed amendments aim to restore public trust, enhance consumer protection, and promote fair competition by strengthening governance frameworks for insurance agents and insurers, and by tightening rules on inducements to policyholders.
The bill has been submitted to the 217th ordinary session of the National Diet. If enacted, the amendments will come into force on a date to be specified by Cabinet Order within one year of promulgation.
To continue reading, please download the full article in PDF format below.
[1] This communication is provided as a service to our clients and friends and is for informational purposes only. It is not intended to create an attorney-client relationship or constitute an advertisement, a solicitation, or professional advice as to any particular situation.
[2] 2024 Insurance Monitoring Report by the Financial Services Agency, p.1, available at https://www.fsa.go.jp/news/r6/hoken/20240703/20240703.html
[3] The scandal here refers to a high-profile insurance fraud case involving Bigmotor Co., Ltd., one of Japan’s largest used car dealers and auto repair companies. In 2023, it was reported that Bigmotor had systematically inflated repair costs and intentionally damaged vehicles in order to claim excessive insurance payouts from multiple non-life insurers. The case exposed serious deficiencies in insurers’ oversight of agents and contractors, and prompted a nationwide review of governance and compliance systems within the insurance industry. The scandal was a major catalyst for the 2025 amendments to the Insurance Business Act.