Bigmotor, 7 Insurers to Submit Fraud Reports

Jiji Press

16:59 JST, August 1, 2023

TOKYO (Jiji Press) — Japan’s Financial Services Agency on Monday ordered used car dealer Bigmotor Co. and seven nonlife insurers to submit reports under the insurance business law over Bigmotor’s fraudulent automobile insurance claims.

The FSA will investigate Bigmotor’s operations as an insurance agent. It will also examine the relations between Bigmotor and the seven insurers, which commission auto insurance sales to the used car dealer, and investigate whether the insurers have had any problems in terms of policyholder protection.

The seven include the four major insurers of Tokio Marine & Nichido Fire Insurance Co., Sompo Japan Insurance Inc., Mitsui Sumitomo Insurance Co. and Aioi Nissay Dowa Insurance Co., as well as three midsize insurers including Kyoei Fire and Marine Insurance Co.

If the FSA finds problems, it may issue business improvement orders. It will also consider revoking the registration of Bigmotor as an insurance agent.

The nonlife insurers introduced Bigmotor’s repair shops as partner garages to their policyholders when they had car accidents, informed sources said.

Bigmotor allocated mandatory automobile liability insurance contracts to the nonlife insurers in return, based on the numbers of cars they helped to send to Bigmotor repair shops.

Tokio Marine, Mitsui Sumitomo Insurance and Sompo Japan also dispatched a total of 43 employees to Bigmotor on loan, including 37 workers sent from Sompo Japan from 2011.

As Sompo Japan staff were aware of the possibility that Bigmotor submitted fraudulent auto insurance claims, the FSA will scrutinize whether the insurer was involved in the wrongdoing.