■Amendments to the Insurance Business Act - Strengthening obligations to establish systems, etc. -
Updated: July 2026, 8
In the insurance industry, a series of problems have come to light, including the "Big Motor Incident" and "Inappropriate Insurance Premium Adjustments at Major Insurance Companies." Most recently, there have been a series of administrative sanctions against major insurance agencies.
Meanwhile, a law amending part of the Insurance Business Act was enacted on May 30, XNUMX.
It was promulgated on June 6th and is scheduled to come into effect within one year from the date of promulgation.
This is a major legal reform that will require the establishment of essential systems, such as the appointment of a compliance officer.
This topic explains the key points of the planned revisions.
| Background to the legal reform |
In the insurance industry, a series of problems have come to light, including fraudulent insurance claims such as the Big Motor incident and inappropriate premium adjustments at major insurance companies, and there have been discussions about strengthening regulations on large-scale joint agencies and insurance companies.
The current legal reform aims to prevent the recurrence of such problems, ensure customer-oriented business operations, and realize a healthy competitive environment, primarily through the following measures:Tighter regulations on large-scale agencies and insurance companieshas been stipulated.
| Legal reform commentary |
The main changes this time are as follows:
[Amendment 1] Strengthening of the obligation to establish systems for specified large-scale general insurance agencies
[Amendment ②] Strengthening of obligations for insurance companies, etc. to establish systems
[Amendment 3] Prohibition of excessive benefits from insurance companies, etc. to policyholders, etc.
[Amendment 1] Strengthening of the obligation to establish systems for specified large-scale general insurance agencies
The following will be required of "specified large-scale general insurance agencies," which are newly defined under this amendment to the law. Similar provisions are also planned to be established by government ordinance for particularly large-scale general life insurance agencies.
[1] Appointment of Compliance Officers
...A "Compliance Officer" will be appointed at each office, and a "General Manager" will be appointed at the head office, etc.
[2] Obligation to establish a complaints handling system
...Obligation to establish a system for appropriately handling complaints from outside
Furthermore, a Cabinet Office ordinance is expected to require the establishment of internal reporting and internal audit systems.
[3] Furthermore, in the case of a "concurrent specified insurance solicitor" among specified large-scale general insurance agencies
...Mandatory establishment of a system to monitor side jobs to ensure they do not have an undue impact on insurance payment
Under the current Insurance Business Act, there are no provisions to guarantee the appropriateness of repair costs that form the basis of insurance payments for agencies that have a second business (e.g., automobile repair business) that receives compensation from insurance payments. As a result, excessive repair cost claims and fraudulent insurance claims are overlooked.
This time, [3] requires that specific insurance agents who hold multiple jobs must establish a system to properly monitor their multiple jobs so that they do not have an undue impact on the payment of insurance claims. They will be required to identify businesses and transactions that may harm customers' interests and trust, and to properly monitor and manage those risks.
What is a "specified large-scale joint non-life insurance agency"?
"Specified large-scale general insurance agency" is a term newly defined in the revised Insurance Business Act.
This refers to a non-life insurance agency that is "a large-scale agency that handles products from multiple insurance companies in a joint format," and specific standards are delegated to Cabinet Office Ordinances.
One useful reference is "Large-scale specific insurance agents."
The Insurance Business Act previously defined a "large-scale specified insurance solicitor," which specifically refers to an entity that falls under any of the following at the end of each fiscal year (Article 236-2 of the current Enforcement Regulations of the Insurance Business Act):
① Those who belong to 15 or more insurance companies
② The total amount of commissions received from two or more affiliated insurance companies during the fiscal year is 2 billion yen or more
The Financial Services Agency's "Preliminary Regulatory Assessment Report" states that there will be approximately 5 "large-scale specified insurance agents" in fiscal year 500, and the newly established "specified large-scale general non-life insurance agencies" are expected to be further narrowed down from "large-scale specified insurance agents."
[Amendment ②] Strengthening of obligations for insurance companies, etc. to establish systems
The revised Insurance Business Act imposes obligations on insurance companies, foreign insurance companies, etc., and insurance holding companies to properly manage information on insurance-related business and to establish a system to properly monitor the implementation status of insurance-related business, so that the interests of customers in insurance-related business are not unduly harmed by transactions conducted by specified insurance solicitors, etc. (Article 100-2-2 of the revised Insurance Business Act).
From the perspective of ensuring the appropriateness of insurance payment management, the Cabinet Office Ordinance is expected to require insurance companies, etc. to monitor the status of the above-mentioned systems established by non-life insurance agents engaged in secondary business, to tighten payment assessments for agents with secondary business in question, and to appropriately separate insurance payment management departments from sales departments.
[Amendment 3] Prohibition of excessive benefits from insurance companies, etc. to policyholders, etc.
Under the current Insurance Business Act, "prohibited acts relating to the conclusion of insurance contracts, etc." include making false statements, failing to disclose important matters, and providing special benefits, and these acts are prohibited.
The revised Insurance Business Act will expand the scope of the targets and acts of the existing prohibition on the provision of benefits.
Specifically, the followingYellow mark areaThe following will be added, and so-called favoritism will also be prohibited.
(Current law)
[Target] To the policyholder or insured
[Act] Providing insurance premium discounts, rebates, or other special benefits
(Amended Act)
[Subject] Policyholder or insuredOr a person who has a close relationship with these peopleAgainst
[Act] discount or rebate on insurance premiums;Purchase of goods, provision of services, and other transactions
Anything that is not deemed appropriate in light of accepted business practicesOther special benefits provided
Specifically, the supervisory guidelines stipulate the criteria for determining "excessive favors" and the systems that must be put in place.
| Conclusion |
For some time now, there has been concern about the reversed relationship of master and servant between insurance companies and large-scale joint agencies in the actual transactions, with insurance companies relying on the sales power of their agencies.
The purpose of this legal amendment is to correct this industry structure and to realize and establish customer-oriented business operations in a true sense.
In the future, specified large-scale independent agencies and insurance companies will be required to not only establish a formal compliance system, but also to build and operate an effective internal control system. It is important to ensure that business management (governance) functions not only in form but also in substance through internal audits, whistle-blowing systems, and appropriate monitoring of concurrent work.
Support Administrative Scriveners Corporation will continue to provide support to businesses in the financial industry, including insurance companies, to help them achieve more effective internal control systems, from building internal control systems (consulting) to audit support.
| Source |
・Outline of the bill to amend the Insurance Business Act (Financial Services Agency)
https://www.fsa.go.jp/common/diet/217/01/gaiyou.pdf
・Outline of the bill to amend the Insurance Business Act (Financial Services Agency)
https://www.fsa.go.jp/common/diet/217/01/youkou.pdf
・Comparison of old and new provisions (Financial Services Agency)
https://www.fsa.go.jp/common/diet/217/01/shinkyuu.pdf
・Explanatory materials for the bill to amend the Insurance Business Act (Financial Services Agency)
https://www.fsa.go.jp/common/diet/217/01/setsumei.pdf
・Regulatory Examination Report (Financial Services Agency)
https://www.fsa.go.jp/seisaku/r6ria/20250307_03.pdf
Comprehensive Supervision Guidelines for Insurance Companies (Comparison Table of Old and New Guidelines) (Draft) (Financial Services Agency)
https://www.fsa.go.jp/news/r6/hoken/20250512/shinkyu.pdf
Above
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