Tokio Marine Holdings acknowledges improper conduct, implements reforms

A Group Audit Committee will be established to replace the Internal Control Committee, expanding its scope.

Tokio Marine Holdings, as the parent company of Tokio Marine & Nichido Fire Insurance Co, acknowledges and apologizes for the improper conduct that led to the submission of a business improvement plan by the subsidiary to the Japan Financial Services Agency. 

In response, Tokio Marine Holdings is implementing major measures to strengthen the management of its non-life insurance subsidiaries.

The insurer said there will be an establishment of a "Group Audit Committee" to replace the Internal Control Committee, expanding its scope to include deliberations on individual incidents with external perspectives (effective April 2024).

Also, a consolidation of the second and third lines of defence in domestic businesses to provide direct guidance and supervision to group companies (specific action plan to be developed in FY2024).

An implementation of direct audits by holdings for domestic group companies, including those with internal audit functions, starting intermittently from FY2024.

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Reinforcement of the compliance and risk reporting system, including regular meetings to examine potential legal violations and raise awareness of risks (beginning FY2024), will also be changes made.

Lastly, a review and clarification of reporting guidelines from group companies to Holdings regarding compliance issues, with a focus on incidents likely to have a qualitative impact (implemented November 2023).

To recall, the Japan Fair Trade Commission (JFTC) raided four major Japanese insurance companies – Tokio Marine & Nichido Fire Insurance Co., Sompo Japan Insurance Inc., Mitsui Sumitomo Insurance Co., and Aioi Nissay Dowa Insurance Co. – along with two of their agents, in suspicion of engaging in cartel behaviour, reported last December.

The suspicion centres around the adjustment of premiums in business insurance policies. Specifically, these companies are alleged to have colluded in setting premiums for policies covering several large corporations and government entities.