Major general insurer Sompo Japan said that it is preparing to seek damages from Bigmotor, the used car dealer currently embroiled in a company-wide insurance fraud scandal.
Sompo has been one of Bigmotor’s primary insurance partners for the past few years, so much so that the insurer’s relationship with the used car dealer is now also being looked at in the ongoing investigations with the FSA.
According to a report from Nippon, Sompo will also terminate its insurance agency contract with the car dealer to protect customers as the effects of the high-profile scandal rage on. An earlier report revealed that compared to two other insurers – Mitsui Sumitomo and Tokio Marine & Nichido Fire – partnered with Bigmotor, Sompo has far more policies as well as agents on loan.
Sompo also came under fire when it admitted that it received reports of suspicious activity in Bigmotor outlets as early as last year but failed to take appropriate action.
Meanwhile, the hearing between the Financial Services Agency (FSA) of Japan and Bigmotor executives is still ongoing.
In the saga’s latest development, Bigmotor is being suspected of having fabricated insurance contracts for automobiles, with one such vehicle scheduled to be scrapped. This act, according to regulators, was done to fraudulently boost the car dealer’s number of insurance contracts, a violation of the insurance business law in the country.
The FSA is currently investigating if there were any violations made during Bigmotor’s operations as an insurance agent. The regulator is expected to order the car dealer to submit a report on the matter.
Besides its insurance fraud woes, Bigmotor is also in hot water over allegations of killing roadside trees planted in front of various lots in order to boost its marketing for used cars.
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