This order comes in light of their involvement in the insurance fraud scandal associated with used car dealer Bigmotor.
A report from The Mainichi noted that the FSA's investigation revealed that despite being aware of fraudulent activities, the prominent insurance group continued its business dealings with Bigmotor. The agency criticised the companies for prioritising profit over customer interests and has demanded a rectification of this corporate culture.
Additionally, the FSA is calling for a clarification of management responsibilities and a strengthening of legal compliance within the insurance firms.
The scandal at the core of this issue involves Bigmotor's alleged practice of charging inflated repair fees. The company reportedly intentionally damaged customers' cars, including using tools like screwdrivers and golf balls, to make fraudulent insurance claims.
Sompo Japan, a significant provider of auto insurance through Bigmotor, is accused of deliberately overlooking these malpractices to preserve their business relationship. The insurance company is also alleged to have directed customers to Bigmotor for car repairs.
A third-party investigation panel's report provided insights into the extent of the damage caused by Bigmotor's employees to vehicles. While other major insurance firms severed ties with Bigmotor in 2022 following a whistleblower's revelations of the fraudulent claims, Sompo Japan reportedly resumed its business with the dealership later the same year.
What are your thoughts on this story? Please feel free to share your comments below.
