TOKYO, Sept. 19 (Xinhua) -- Japan's financial regulator on Tuesday started its probe into the country's major used car dealer Bigmotor and insurance company Sompo Japan Insurance, in response to allegations of fraudulent insurance claims related to automobile insurance, local media has reported.
According to the Financial Services Agency (FSA), a thorough investigation was initiated to uncover the reported collusion between Bigmotor, which deliberately damaged vehicles during repair to make exaggerated insurance claims, and Sompo Japan Insurance, which resumed transactions with Bigmotor despite being aware of the fraudulent activities.
The responsibilities of Sompo Holdings, the parent company of Sompo Japan Insurance, were also brought into question amid the probe, national news agency Kyodo reported.
If it is determined that the company disregarded the interests of insurance policyholders, administrative sanctions such as orders for business improvement may be imposed.
The FSA has not ruled out the possibility of conducting an inspection at Sompo Holdings itself.
Amid the insurance fraud scandal, Sompo Japan Insurance President Giichi Shirakawa on Sept. 8 publicly announced his decision to resign, taking responsibility for the situation. ■