Japan’s Financial Services Agency (FSA) has initiated its searches at the premises of Bigmotor and the offices of Sompo Japan as part of a high-profile investigation into insurance fraud.
Several inspectors from the FSA entered Sompo Japan’s headquarters in Tokyo’s Shinjuku Ward and a Bigmotor outlet in Tama, western Tokyo. The Tama location houses the company’s insurance agency businesses, a Kyodo News report said.
The objective of the FSA is to investigate the connections between these companies with Sompo Japan, a significant seller of auto insurance through Bigmotor accused of purposefully turning a blind eye to Bigmotor’s fraudulent practices to preserve their relationship.
The founder and president of Bigmotor, Hiroyuki Kaneshige, resigned in July, and Giichi Shirakawa, president of Sompo Japan Insurance, announced his intention to resign earlier this month.
Financial regulators are also planning to interview Kengo Sakurada, CEO of Sompo Holdings, the parent company of the insurer, to assess corporate governance practices and the company’s response after discovering the scandal.
“We will respond to the FSA’s inspection sincerely and strive to recover customer damages,” Sompo Japan said in response.
The investigations at both companies are expected to extend over several months, as per FSA officials. Employees of Bigmotor were found to have intentionally scratched vehicle bodies with screwdrivers and damaged panels with golf balls to inflate repair bills, according to a report prepared by an independent panel of lawyers appointed by the company.
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