The Financial Services Agency plans to revoke major used car dealer Bigmotor's registration as an insurance agent on Nov. 30 following revelations about its fraudulent auto insurance claims, financial services minister Shunichi Suzuki said Tuesday.
The administrative penalty, the heaviest punishment against insurance agents, will be given to Bigmotor after hearing opinions from the company on Nov. 21.
Through its on-site inspections of Bigmotor under the insurance business law, the FSA found that the company had not established an appropriate insurance sales system, Suzuki told a news conference.
The FSA investigated the widespread acts at Bigmotor of deliberately damaging customers' vehicles to pad insurance claims, as well as the company's poor governance system.
Given that nonlife insurers have decided to cancel their agency contracts with Bigmotor, Suzuki said that the used car dealer would unlikely be able to receive support from them in rebuilding its business.
In October, the transport ministry imposed administrative penalties on 34 Bigmotor outlets across Japan where road traffic law violations were confirmed, ordering some to suspend vehicle maintenance operations and revoking designations as private vehicle inspection stations for some outlets.