The Financial Services Agency is expected to punish Nichido Fire & Marine Insurance Co. for allegedly selling car insurance policies without obtaining official approval, sources said Wednesday.
The financial regulator has yet to decide what action to take but may issue an order that the nonlife insurer improve its operations, the sources said.
They said there is also a chance for harsher penalties.
Having probed the matter since March, the FSA will make an announcement within a few days.
Nichido Fire has marketed several auto insurance policies without first obtaining the necessary FSA approval.
The insurer issued a statement that reads: “The FSA demanded that we report our inappropriate application regarding our policies, so we have conducted an investigation with serious recognition of the matter and presented its results to the FSA.”
The firm declined to elaborate.
Competition has been intensifying in the nonlife insurance industry since the recent deregulation of insurance premiums. On April 2, Nichido Fire and Tokio Marine & Fire Insurance Co. joined forces and launched a holding company, Millea Holdings Inc.
Millea Holdings will eventually form the Millea Insurance Group, which will comprise three nonlife insurers and one life insurance firm.
The remaining two components of the prospective insurance group — Kyoei Mutual Fire & Marine Insurance Co. and Asahi Mutual Life Insurance Co. — will come under the wing of the holding company at a later date.
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