The Japan Fair Trade Commission is conducting its own investigation to determine whether the insurers breached the anti-monopoly law. — Bloomberg
TOKYO: Japan’s financial regulator penalises the country’s largest property and casualty insurers for colluding to fix prices in contracts with corporate clients.
The Financial Services Agency (FSA) issued business improvement orders on the core units of Tokio Marine Holdings Inc, MS&AD Insurance Group Holdings Inc and Sompo Holdings Inc, said Finance Minister Shunichi Suzuki yesterday.
The investigation has rocked Japan’s casualty insurance sector, which has also been under fire for failing to detect fraudulent auto insurance claims.
The three groups command about 90% of the market worth roughly nine trillion yen in annual net premium revenue, according to data by the industry association and companies.
Suzuki said the misconduct was repeated continuously at Sompo Japan Insurance, Tokio Marine and Nichido Fire Insurance, Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance, and added it is regrettable that the firms had engaged in price fixing.
Business improvement orders are one of the most common penalties issued by the regulator for failures of internal controls and legal compliance at financial institutions.
The receiving entities have to submit progress reports on steps taken. The FSA started on-site inspection of the insurers last week.
The Japan Fair Trade Commission is conducting its own investigation to determine whether the insurers breached the anti-monopoly law.
Despite the probes, shares of the three insurance groups have jumped this year.
MS&AD has gained 27% in Tokyo trading, while Tokio Marine has climbed 22% and touched a record earlier this month. Sompo, which also recently hit fresh highs, is up 15%. — Bloomberg
