Sompo Japan ordered to improve practices following Bigmotor fallout
Sompo Japan ordered to improve practices following Bigmotor fallout | Insurance Business Asia
Motor & Fleet
Sompo Japan ordered to improve practices following Bigmotor fallout
Company asked to clarify management responsibilities and strengthen legal compliance
Motor & Fleet
By
Kenneth Araullo
Japan’s Financial Services Agency (FSA) has issued a directive to Sompo Japan and its parent company, Sompo Holdings, mandating improvements in their operational practices.
This order comes in light of their involvement in the insurance fraud scandal associated with used car dealer Bigmotor.
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.
Related Stories
Keep up with the latest news and events
Join our mailing list, it’s free!
