Sompo Japan Insurance President Giichi Shirakawa will step down to take responsibility for the handling of a high-profile insurance fraud involving Bigmotor, the insurer's parent company said Friday.
The major Japanese insurer's close relationship with Bigmotor — a used car dealership and repair chain — has come under scrutiny since the dealership chain was found to have charged excessive repair fees after intentionally damaging cars and to have made fraudulent insurance claims.
Sompo Japan, which has been sending a large number of employees on loan to Bigmotor, is suspected of overlooking the wrongdoing by the dealership to avoid damaging their business ties.
The scandal, which has been widely reported over the past few months, has sent a shock wave across the country. Hiroyuki Kaneshige, the founder and then president of the dealership, was forced to resign in July amid mounting outrage among customers.
Bigmotor's employees were scratching the vehicles with screwdrivers and damaging their surfaces with golf balls to pad repair charges, according to a report compiled by a panel of outside lawyers set up by the dealership.
The Financial Services Agency is looking into the matter and is slated to conduct an on-site inspection at the insurer later this month.
Shirakawa became the president of Sompo Japan in April last year at the age of 51.