Japan FSA Urges Nonlife Insurers to Sell Cross-Held Shares
Tokyo, Feb. 9 (Jiji Press)--Japan's Financial Services Agency has urged four major nonlife insurance companies found to have rigged insurance premiums for corporate clients to accelerate sales of cross-held shares, sources said Friday.
The financial industry watchdog suspects that the environment for competition may have been distorted by the practice of holding shares in client companies to maintain good relations with them.
In December last year, the FSA issued business improvement orders to the four major insurers--Tokio Marine & Nichido Fire Insurance Co., Sompo Japan Insurance Inc., Mitsui Sumitomo Insurance Co. and Aioi Nissay Dowa Insurance Co. The companies were accused of presetting premiums for insurance products for corporate clients before bidding.
The agency believes that there was an unspoken rule to decide winners of insurance contracts with corporate clients, based on the numbers of cross-held shares instead of the quality of insurance services they offer, the sources said.
As of the end of March 2023, the four companies held a total of about 6 trillion yen in cross-shareholdings. The companies are expected to include plans to accelerate sales of such shares in their business improvement plans to be submitted to the FSA at the end of this month.