JFTC issues Cease and Desist Order and Surcharge Payment Order against Non-Life Insurance Companies

The Japan Fair Trade Commission (JFTC) today issued a cease and desist order and a surcharge payment order against Mitsui Sumitomo Insurance, Sompo Japan Insurance, Aioi Nissay Dowa Insurance, Tokio Marine & Nichido Fire Insurance (non-life insurance companies), and Kyōritsu (non-life insurance agent) based on the provisions of the Antimonopoly Act.

The details of the violations are as described in Section 1–2 below, and each case involved the non-life insurance companies, etc. engaging in acts that violated Article 3 of the Antimonopoly Act (Prohibition of Unreasonable Restraint of Trade).

In addition, from the perspective of preventing violations of the Antimonopoly Act, the JFTC has compiled points to note regarding the Antimonopoly Act relating to co-insurance, as described in Section 2 below.

Furthermore, today the JFTC made requests to the Financial Services Agency (FSA) and the General Insurance Association of Japan (GIAJ), as described in Section 3 below.

Section 1 — Cease and Desist Orders and Surcharge Payment Orders

Summary of Violations

(1) Non-life insurance for JERA as the policyholder

Mitsui Sumitomo, Sompo Japan, Aioi, and Tokio Marine jointly and substantially restricted competition in the transaction field of property and profit insurance by coordinating the level of premiums to be presented by each company in the bidding, etc., so that premiums could be increased or maintained, which is against the public interest.

(2) Non-life insurance for Cosmo Oil as the policyholder

Mitsui Sumitomo, Sompo Japan, Aioi, and Tokio Marine jointly and substantially restricted competition in the transaction field of refinery comprehensive insurance by coordinating the acceptance ratio and premium level of each company in the bidding, etc., so that they could be maintained, which is against the public interest.

(3) Non-life insurance for Japan Oil, Gas and Metals National Corporation as the policyholder

Mitsui Sumitomo, Sompo Japan, Tokio Marine, and Kyōritsu jointly restricted competition in the transaction field of storage base insurance by ensuring that Mitsui Sumitomo, Sompo Japan, and Tokio Marine could receive orders at pre-assumed premium rates and acceptance ratios, which is against the public interest.

(4) Non-life insurance for Sharp Corporation as the policyholder

Mitsui Sumitomo, Sompo Japan, and Tokio Marine jointly restricted competition in the transaction field of marine insurance by coordinating the quoted premium rates of each company to maintain the premium level, which is against the public interest.

(5)-(9): Additional violations were found in insurance contracts for Keisei Electric Railway, the Tokyo Metropolitan Police Department, hospitals commissioned by the Tokyo Metropolitan Government, Sendai International Airport and Tokyu Corporation.

Section 2 — Points to Note Regarding the Antimonopoly Act on Co-insurance

Many of the violations of the Antimonopoly Act subject to the cease and desist orders in Section 1 above were committed in the process of forming co-insurance. Therefore, from the perspective of preventing violations of the Antimonopoly Act, the JFTC has compiled the considerations under the Antimonopoly Act and competition policy perspectives that non-life insurance companies, non-life insurance agents, and policyholders should keep in mind regarding the formation and utilization of co-insurance.

Section 3 — Request to the Financial Services Agency and the General Insurance Association of Japan

As described in Section 1 above, violations of the Antimonopoly Act were committed in a wide range of non-life insurance businesses. Therefore, regarding compliance with the Antimonopoly Act, the JFTC has requested the Financial Services Agency to inform non-life insurance companies, etc. and the General Insurance Association of Japan to inform its members, respectively.

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