COUNTRYCOMPARATIVEGUIDES 2022

The Legal 500
Country Comparative Guides

Japan
INSURANCE & REINSURANCE
Contributing ﬁrm
Chuo Sogo Law Oﬃce
Hironori Nishikino
Partner | nishikino_h@clo.gr.jp
Koji Kanazawa
Partner | kanazawa_k@clo.gr.jp

This country-speciﬁc Q&A provides an overview of insurance & reinsurance laws and regulations applicable in Japan.
For a full list of jurisdictional Q&As visit legal500.com/guides

Chuo
Sogo
Law
OfficeInsurance & Reinsurance: Japan

JAPAN
INSURANCE & REINSURANCE

1. How is the writing of insurance
contracts regulated in your jurisdiction?
Writing of insurance contracts is regulated by the
Insurance Business Act and the Financial Services
Agency (the “FSA”) supervises insurance companies.
Oﬀering new insurance products requires approval fromthe FSA, (“Insurance Product Approval” – regularprocessing takes 90 days, standardised 45 days).
However, regarding certain types of insurance where
there is little fear of insuﬃcient policyholder protection,such as ﬁre insurance, a notiﬁcation system to theregulatory authorities has been adopted, although
notiﬁcation may not be required in cases where
insurance companies state in the statement of businessprocedures that special provisions related to businessinsurance are to be established or modiﬁed without
notiﬁcations. (“Flexible Provision System”).

their oﬃcers, employees and other personnel) may
conduct “insurance solicitation.” In principle, in thecurrent legal system, life insurance agents operate
within the so-called “one-company exclusive system”,
meaning they may deal with the insurance products of
only one insurance company. However, by fulﬁlling theprescribed legal requirements (such as enrolling two or
more life insurance agents), it is possible to deal with theinsurance products of multiple insurance companies,
with quite a number of independent agencies currently
doing so.
The situation involving non-life insurance companies(including reinsurance companies) is as follows:Oﬃcers (other than auditors) and employees
of a non-life insurer may engage in “insurance
solicitation” without being registered nor any
notice thereof.
Registered non-life insurance agencies as wellas their oﬃcers (with the exception ofauditors) and employees may engage in“insurance solicitation.” No oﬃcers or
employees of non-life insurance agencies are
required to be registered, but they are
required to give notice of such a fact.

2. Are types of insurers regulated
diﬀerently (i.e. life companies, reinsurers?)
Life insurers and non-life insurers are both regulated by
the Insurance Business Act. Reinsurers are regulated in
the same way as nonlife insurers. Engaging in theunderwriting of life insurance and non-life insurance
entails obtaining from the regulatory authorities a life
insurance business licence and a non-life insurance
business licence, respectively. Companies may not run
both businesses concurrently.

Unless otherwise permitted by any other laws, theInsurance Business Act prohibits any person from acting
as an agent or intermediary to solicit insurance
contracts, an activity which falls under the deﬁnition of“insurance solicitation” under the Act.

Registered insurance brokers may also engage in“insurance solicitation” (limited to mediating conclusionsof insurance contracts). The Insurance Business Act has
assigned special duties to such insurance brokers,
including the duty to deposit a security guarantee (JPY20
million at the time of commencement of their business,
which payment can be exchanged for an insurance
brokers’ liability insurance policy), the duty to disclose
fees and commissions, the duty to prepare bought andsold notes, the duty of loyalty (the duty of “bestadvice”), and other special duties that have not been
imposed on insurance agents.

In the case of a life insurance company, only registeredlife insurance agents (ie, oﬃcers and employees of a life
insurer; or life insurance agencies (agents) as well as

4. Is authorisation or a licence required
and if so how long does it take on average

3. Are insurance brokers and other types ofmarket intermediary subject to regulation?

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Insurance & Reinsurance: Japandiscriminatory treatment with regard to
insurance premiums.

to obtain such permission? What are thekey criteria for authorisation?
Engaging in the underwriting of life insurance and nonlife insurance entails obtaining from the regulatory
authorities a life insurance business licence and a nonlife insurance business licence, respectively. The FSA
endeavors to complete its review of license application
procedures within 120 days after a license application
reaches to the FAS (which is a standard processing
period under Article 246 of the Order for the
Enforcement of the Insurance Business Act). An insurers
who lay out a plan for obtaining a license, however,cannot normally rely on this standard processing time,ﬁrst, because it only obligates the FSA to make an eﬀort
to meet that deadline, and second, because theirnegotiations with the FSA begin by an exchange of drafts
preceding in the formal ﬁlling of documents for the
license application – in fact, it is common that no formal
documents for the license application are ﬁled before
obtaining an acknowledgement from the FSA.

5. Are there restrictions or controls over
who owns or controls insurers (including
restrictions on foreign ownership)?
Under the Japanese regulatory framework, shareholders
who own a certain percentage of voting rights in insurers
are subject to oversight by the regulator.
A shareholder with more than 50% voting
rights in an insurance company is required toobtain approval from the FSA in advance ofacquiring such voting rights (Insurance
Holding Company; Article 271-18-1 of the
Insurance Business Act). Insurance Holding
Companies are subject to strict regulations,
including those regulating the scope ofbusiness and imposing subsidiary restrictions,and, in certain instances, reporting
obligations.
Apart from Insurance Holding Companies, ashareholder with 20% or more voting rights in
an insurance company requires approval fromthe FSA in advance of acquiring such voting
rights (Major Shareholder of Insurance
Companies; Article 271-10-1), even if suchinvestor resides overseas. The FSA oversees
Major Shareholders of Insurance Companies
by imposing reporting obligations and taking
administrative dispositions.
A shareholder with more than 5% voting
rights in an insurance company is required toreport the acquisition of such voting rights to
the FSA within ﬁve days (or one month in thecase of foreign investors) (Shareholders with
Large Voting Rights in Insurance Company;
Article 271-3-1 of the Insurance Business Act).
That shareholder has to submit a report if
their percentage of voting rights changes by
1% or more (either as an increase or
decrease). The FSA may take administrative
dispositions against Shareholders with Large
Voting Rights in an Insurance Company if it
ﬁnds that the submitted report includes false
information, or lacks important or necessary
information, thus causing a potential
misunderstanding.

The key criteria for licencing under the Insurance
Business Act are, among other things, as follows:i. the person ﬁling application for the insurance
licence has a suﬃcient ﬁnancial basis toperform insurance services soundly andeﬃciently, and has good prospects for income
and expenditures in connection with thoseservices;ii. in light of such points as its personnel
structure, the applicant has the knowledge
and experience to perform insurance services
appropriately, fairly, and eﬃciently, and has
suﬃcient social credibility;iii. the contents of the insurance contracts haveno risk of lacking in protection for thepolicyholders, the persons to be insured,
beneﬁciaries of insurance proceeds, and otherrelevant persons;iv. no speciﬁc persons are subject to unfair ordiscriminatory treatment under the contentsof the insurance contracts;
v. the contents of the insurance contracts poseno risk of encouraging or inducing conductthat is harmful to public policy and good
morals;vi. the rights and obligations of the Policyholders,etc. and other contents of the insurance
contracts are speciﬁed clearly and simply for
the Policyholders, etc.;vii. the calculation procedures for insurance
premiums and policy reserves are reasonable
and proper, based on actuarial science; andviii. no speciﬁc persons are subject to unfair or

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6. Is it possible to insure or reinsure risks
in your jurisdiction without a licence or
authorisation? (i.e. on a non-admitted

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Insurance & Reinsurance: Japanbasis)?
For the following insurance contracts, foreign insurers
may conclude insurance contracts without obtaining theapplicable license:
1. Reinsurance contracts;
2. Marine insurance contracts pertaining to
objects such as vessels with Japanesenationality used for international maritime
transportation;
3. Aviation insurance contracts pertaining toaircrafts with Japanese nationality used forcommercial aviation;
4. Insurance contract pertaining to launching
into outer space;
5. Certain insurance contracts covering cargo
located within Japan which is in process of
being shipped overseas; and6. Overseas travel insurance.

7. Is a branch of an overseas insurer,
insurance broker and/or other types ofmarket intermediary in your jurisdiction
subject to a similar regulatory framework
as a locally incorporated entity?

enforcement environment? What are the
key areas of its focus?
Based on the Insurance Business Act, the regulatory
authorities have the power to issue administrative
dispositions to insurance companies, including orders tochange the basic documents, orders for business
improvement, orders for suspension of business, ororders for cancellation of a licence. In fact, a broad
discretion has been given to the regulatory authorities,
and those administrative dispositions against insurancecompanies invoked by the regulatory authorities are notnecessarily based on the assumption that violations oflaw by insurance companies have taken place. With thatas a background, entities targeted for supervision not
only have to make sure that laws and regulations arebeing observed but must also follow the guidelines
oﬃcially promulgated by the regulatory authorities(Comprehensive Guidelines for the Supervision of
Insurers; the “Guidelines”).
According to The JFSA Strategic Priorities July 2021-June2022 (August 2021):
Insurance companies need to respond to thechanging business environment, such as
decreasing population, continuing low interest
rates, the increasing severe and frequent
natural disasters, the shrinkage of the auto
insurance market, the further progress ofdigitalization, while also preparing for the
post-COVID society.
In response to these changes in the businessenvironment, it is important to build
sustainable business models and to develop
insurance products that meet the changing
customer needs.
In addition, as the demand for non-face-toface and eﬃcient business operations
increases, insurance companies need todevelop a workplace that is capable of dealing
with digitalization.
Furthermore, as more insurance companies
are expanding overseas, it is important toenhance their group-wide governancesystems.
In order to support their eﬀorts, JFSA will holddialogues with insurance companies incoordination with overseas supervisors.
In response to natural disasters, in theenvironment where reinsurance premiums are
soaring, the urgent challenge for insurancecompanies is to manage risk at the
management level, balancing the company’s
capital, risk and return. JFSA will continue tomonitor the eﬀorts of the insurance

A Japanese branch of an overseas insurer is subject tothe similar regulatory framework as a Japaneseincorporated insurance company, except some points
such as a governance structure requirement. An
overseas insurer is required to conduct insurance
businesses through its Japanese branch with licensefrom the Japanese government, and may not undertake
insurance contracts directly from foreign countries.
Overseas insurance brokers are subject to theregistration requirements under the Insurance Business
Act to the extent they conduct “insurance solicitation” inJapan.

8. What penalty is available for those who
operate in your jurisdiction without
appropriate permission?
A person who engages in the business of insurance
without a license is subject to punishment byimprisonment with work for not more than three years ora ﬁne of not more than 3,000,000 yen (cumulative
imposition thereof as the case may be) (Article 315, item
1 of the Insurance Business Act).

9. How rigorous is the supervisory and

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Insurance & Reinsurance: Japan

1. Procedures allowing to change insurance
policy terms by voluntary agreement between
an insurance company and a policyholder incases where it would be diﬃcult for suchinsurance company to continue its insurance
business.
2. Procedures allowing the Prime Minster toorder
an insurance company to takenecessary measures, such assuspending its business or
consulting on the transfer of
insurance contracts, orthe management of an insurancecompany’s business and property
by an insurance administrator incases where it would be diﬃcult forsuch insurance company tocontinue its insurance business.
3. Procedures allowing the Prime Minister todesignate another insurance company andrecommend that such insurance company
accept consultations on the transfer, etc. of
insurance contracts in the event of abankruptcy of an insurance company.
4. Procedures allowing the Life Insurance
Policyholders Protection Corporation of Japanto provide ﬁnancial assistance for the transfer,etc. of insurance contracts or underwrites
insurance contracts for an insurance company
in the event of a bankruptcy of such insurancecompany.

companies.
In addition, JFSA will also hold dialogues with
non-life insurance companies regarding
appropriate and prompt payment of insurance
claims and appropriate premium rates for ﬁreinsurance.
At the same time, in response to theseenvironmental changes, JFSA will steadily
prepare for appropriate protection forpolicyholders, a smooth transition to a
prudential policy based on economic valuebased solvency regulation, and will also
constantly review the ﬁnancial indicators andregulations for necessary updates.

10. How is the solvency of insurers (andreinsurers where relevant) supervised?
Insurance companies are required to accumulate policy
reserves and appoint an insurance administrator with apredetermined actuary’s license, who gets involved inwork related to actuarial science.
Regulations on the solvency margin ratio wereintroduced in 1996, and the solvency margin index has
become an assessment standard for the supervisory
authorities to execute early corrective actions, withbroad supervisory reach against targeted companies,
including orders to submit an improvement plan. The
solvency margin ratio has been introduced on aconsolidated basis.
Field tests of economic value-based solvency regimes
have been conducted three times in the past, and themost recent ﬁeld test – the results of which wereannounced in March 2017 – was conducted inaccordance with the ICS ﬁeld test speciﬁcations of IAIS
(as of June 2016). In March 2016, the European Union
announced its adoption of the equivalence recognition
between Solvency II with temporary equivalence and theJapanese reinsurance supervision and group solvency.

11. What are the minimum capitalrequirements?
The minimum amount of capital of an insurancecompany is 1,000,000,000 yen (Article 6 of the
Insurance Business Act, Article 2-2 of Order for
Enforcement of the Insurance Business Act).

12. Is there a policyholder protection
scheme in your jurisdiction?
The following policyholder protections are available:

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13. How are groups supervised if at all?
An Insurance Holding Company and an insurancecompany’s major shareholders (i.e., shareholders
holding 20% or more of the insurance company’s voting
rights) are required to obtain approval from, and thelarge holders of the insurance voting rights (i.e., holders
holding 5% or more of the insurance company’s voting
rights) are required to make notiﬁcation to, the FSA
supervising such regulations.
The scope of business that subsidiaries of insurancecompanies may engage is restricted and is stipulated bylaw. Provided, however, that an insurance holding
company’s subsidiary may, with the approval of the FSA,
engage in any business that is not prescribed by law.
The arm’s length rule applies to inter-group transactionsof an insurance company.
Supervision of the FSA for an insurance company groupis based on laws and regulations as well as the
Guidelines and the Financial Conglomerate Supervision

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Insurance & Reinsurance: Japan

Guidelines.

14. Do senior managers have to meet ﬁt
and proper requirements and/or beapproved?
Article 8-2 of the Insurance Business Act requires
directors who are engaged in the business of running an
insurance company to have the knowledge andexperience to appropriately, fairly, and eﬃciently
manage such business and to have adequate social trust(“Fit and Proper Principle”). These matters are dealt in
more detail in the Guidelines.

15. To what extent might senior managers
be held personally liable for regulatory
breaches in your jurisdiction?
There are certain criminal penalties for breaches ofregulations. Besides, the Prime Minister may, if an
Insurance Company has come to fall under any of thefollowing items, order the dismissal of its director,
executive oﬃcer, accounting advisor, company auditor
or ﬁnancial auditor:
i. if it is in violation of laws and regulations,disposition of the Prime Minister pursuant tolaws and regulations, or particularly importantparticulars among those prescribed in the
documents listed in the items of Article 4,paragraph (2) of the Insurance Business Act;ii. if it is in violation of the conditions attached to
the relevant license; andiii. if it engages in conduct prejudicial to the
public interest.

16. Are there minimum presence
requirements in order to undertake
insurance activities in your jurisdiction(and obtain and maintain relevant licences
and authorisations)?
Overseas insurers may conduct insurance business inJapan only if they have opened a branch in Japan andobtained the applicable license from the FSA. The
procedure to apply for the license is mostly the same asthat for Japanese insurance companies. Since overseas
insurers do not have capital inside Japan, they are
required to deposit a minimum of JPY200 million to thedeposit oﬃce to protect policyholders.

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17. Are there restrictions on outsourcing
services and/or operational resilience
requirements relating to the business?
In principle, outsourcing of insurance companies’
business is not restricted. However, the Guidelines
govern the management of outsources.
Moreover, when an insurance company receives
business outsourced by another insurance company, it isnecessary to obtain approval from the FSA (Article 98,
Paragraph 2 of the Insurance Business Act), and in thecase of a group company, a notiﬁcation must be
submitted.
Furthermore, it is generally accepted that the corebusiness of an insurance company, such as deciding
whether to pay insurance claims, cannot be outsourced
due to the licensing system of the insurance business.
As the operational resilience requirement, insurancecompanies are required to make appropriate
preparations in normal times, such as establishingbusiness continuity management (BCM) systems andformulating business continuity plan (BCP). Especially,
the BCP needs to ensure quick recovery from damage
caused by acts of terrorism, large-scale disasters, as wellas continuance of the minimum necessary business
operations and services for the protection ofpolicyholders.

18. Are there restrictions on the types ofassets which insurers or reinsurers caninvest in or capital requirements which
may inﬂuence the type of investments
held?
The asset management method of an insurer is limited
to the scope to the assets set forth in Article 97-2 of the
Insurance Business Act and Article 47 of the Ordinancefor Enforcement of the Insurance Business Act, including
such assets as securities, real property, loans, anddeposits.

19. How are sales of insurance supervisedor controlled?
Solicitation of insurance is subject to a registration as
well as various regulations, such as the duty to provide
information and the duty to check the customer’s intent.
In addition, the Insurance Business Act has introduced
other measures, such as the Cooling-oﬀ System, or the
Financial ADR System.

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Insurance & Reinsurance: Japan

Apart from those regulations, the Insurance Act – which
deals with insurance-related contract law (private law) –contains several mandatory provisions designed for theprotection of consumers, which insurers cannot removeby agreement.

20. To what extent is it possible to actively
market the sale of insurance into yourjurisdiction on a cross border basis and are
there speciﬁc or additional rules pertaining
to distance selling or online sales of
insurance?
Unlicensed overseas insurers may not conclude
insurance contracts with persons having an address orresidence in Japan, property located in Japan, or vessels
or aircrafts with Japanese nationality (Restriction on
Foreign Direct Insurance; Article 186-1 of the Insurance
Business Act) other than the insurance contracts listed
below:
reinsurance contracts;marine insurance contracts pertaining to
objects such as vessels with Japanesenationality used for international maritime
transportation;
aviation insurance contracts pertaining toaircrafts with Japanese nationality used forcommercial aviation;
insurance contracts pertaining to launching
into outer space;certain insurance contracts covering cargo
located within Japan which is in the process of
being shipped overseas; andoverseas travel insurance.
The restriction does not apply when an applicant who
wishes to purchase insurance from unlicensed overseas
insurers has obtained a permission from the FSA in
advance of their applications for insurance as set forth in
Article 186-2 of the Insurance Business Act. This
exception is provided for policyholders’ beneﬁt topurchase insurance products that are most beneﬁcial tothem. Provided, however, that such permission may not
be provided in the following cases:
the insurance product in question violates
laws or is unfair;
it is easy to conclude insurance contracts withlicensed Japanese or foreign insurers forcomparable insurance products on equal ormore advantageous conditions;the terms and conditions of the insurance
product in question are signiﬁcantly
unbalanced compared to the typical terms

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and conditions of the same type of insurance
products with licensed Japanese or foreign
insurers;
concluding such insurance contracts would
unjustly deprive the insured and other related
persons of their beneﬁts; andconcluding such insurance contracts would
likely negatively impact the development of
the Japanese insurance business or beharmful to the public interest.

21. Are consumer policies subject torestrictions, including any pricing
restrictions? If so brieﬂy describe therange of protections oﬀered to consumer
policyholders
Consumer policies are restricted pursuant to several
laws. For example, mandatory or unilaterally mandatory
provisions in the Insurance Act (the latter is a series ofprovisions making void any agreement that, contrary tosuch provisions, adversely aﬀects policyholders); andinvalid provisions under the Consumer Contract Act.
For example, Article 10 of the Consumer Contract Act
provides that:“Any consumer contract clause that restricts the rights
or expands the duties of the consumer beyond theapplication of provisions unrelated to public order in the
Civil Code, the Commercial Code (Act No. 48 of 1899)
and any other laws and regulations, and that unilaterally
impairs the interests of the consumer in violation of thefundamental principle provided in the second paragraphof Article 1 of the Civil Code, is void”.

22. Are the courts adept at handlingcomplex commercial claims?
There are no special courts for resolving commercial
insurance disputes. Commercial insurance disputes are
generally resolved in district courts or summary courts
depending on the value of the dispute. In general,
Japanese courts are adept at handling commercial claims
even they are complex.

23. Is alternative dispute resolution wellestablished in your jurisdictions?
A ﬁnancial ADR system introduced in 2010 to encourage
fast, simple and ﬂexible dispute resolutions. ADR
institutions have been established with the designationand supervision of the FSA. Mediators in the ADR
institutions are selected from the professionals in the

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Insurance & Reinsurance: Japanﬁnancial sectors. A ﬁnancial ADR system obligatesinsurance companies to cooperate the dispute
resolution, wherein insurance companies are required toappear at hearing and provide certain information
requested by the mediators unless reasonable grounds.
As such, a ﬁnancial ADR system is advantageous tocustomers compared to lawsuits in the courts. The
number of ADRs handled through ﬁnancial ADR systems
remains stable in recent years.

24. Is there a statutory transfer
mechanism available for sales or transfersof books of (re)insurance? If so brieﬂy
describe the process.
An insurance company may transfer insurance contracts
to other insurance companies by obtaining theauthorization of the Prime Minister pursuant to theInsurance Business Act. The mechanism of such transfer
is as follows:
Special resolution of shareholders meeting ofboth transferor company and transfereecompany in relation to such transfer.
A transferor company must make a publicannouncement within 2 weeks after the
resolution of the shareholders meeting as well
as notiﬁcations to each policyholders that will
be aﬀected by the transfer (the “Aﬀected
Policyholders”).
The Aﬀected Policyholders may raise an
objection within certain period. The transfer
must not be carried out where the number ofthe Aﬀected Policyholders who have statedtheir objections exceeds one tenth (one ﬁfth,
in case of transfer of insurance contracts
pertaining to all insurance contracts) of all
Aﬀected Policyholders, and the amountspeciﬁed by Cabinet Oﬃce Order as thecredits belonging to the insurance contracts of
the Aﬀected Policyholders who have thusstated their objections exceeds one tenth (oneﬁfth, in case of transfer of insurance contracts
pertaining to all insurance contracts) of theamount prescribed as the credits belonging to
all Aﬀected Policyholders.
In case where a transferor company obtains
an authorization of the Prime Minister, andwhere any Aﬀected Policyholder raised an
objection and manifested their intention tocancel the contract if the transfer of thecontract takes place, the transferor company
must refund to the relevant Aﬀected
Policyholder the amount of money reserved
for the insured, any unearned premium and

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any other amount of money speciﬁed by
Cabinet Oﬃce Order.

25. What are the primary challenges to
new market entrants? Are regulators
supportive (or not) of new market
entrants?
Obtaining required license from the FSA is the primarychallenges to new market entrants. While the Financial
Services Agency is supporting digital innovation andprovides certain assistance for FinTech companies, it stilltakes long time to complete the license procedure. New
market entrants are better to commence the discussion
with the FSA 1.5-2 years before the launch of business.

26. To what extent is the market being
challenged by digital innovation?
In Japan, the emergence of digital innovation in theﬁnancial sector, so- called FinTech, was mostpronounced in the banking sector at ﬁrst.
Indeed, the Japanese government ﬁrst responded to
FinTech by amending the Banking Act so that banks
could own technology companies as their subsidiaries –something which was previously restricted to someextent. In 2021, the Insurance Business Act wasamended identically for insurance companies to own
subsidiaries that provide IT and other technology toenhance insurance activities and beneﬁt the insurancecompanies’ customers.
Japanese insurance companies are adopting newtechnologies to their services, such as IoT (Internet ofThings), Big Data and Artiﬁcial Intelligence. For example,
many insurance companies provide insurance, where an
insured has a “driving counter” installed into their cars,
which would monitor their driving; if it shows safe drivingon the part of the insured, the insurer will give theinsured cash back towards insurance fees.

27. How is the digitization of insurance
sales and/or claims handling treated inyour jurisdiction, for example is theregulator in support (are there concessions
to rules being made) or are there
additional requirements that need to bemet?
The Financial Services Agency has indicated its position
to continue promoting digitization as a sound andsustainable business model for insurance companies

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based on the experience with the Covid-19 pandemic.
Speciﬁcally, the following deregulatory measures havebeen implemented with regard to the provision of
information by insurance companies to customers at thetime of sales of insurance products (eﬀective January 21,2021):
1. Explanatory documents related to “variableinsurance” and “foreign currencydenominated insurance” that were notpermitted to be issued by electromagnetic
means can now be provided by electronicmeans after obtaining the customers’
consent.
2. With regard to the obligation to deliver
documents to customers other than the
documents referred to above in item (i), while
the provision of information by electronicmeans had been permitted after obtaining
prior customers’ approval, the method oftransmission was limited to e-mail,downloading, and CD-ROM only. However,with the implementation of this deregulatory
measure, electronic means now include poston customer-only pages (e.g., pages requiring
IDs and password-based authentication) andpublicly-accessible pages (e.g., the company’s
home page).

28. To what extent is insurers' use ofcustomer data subject to rules orregulation?
The Insurance Business Act requires an insurancecompanies to establish an internal management systemfor proper handling of customer data, including
preparation of company rules, training for
employees/oﬃcers, controlling access to customer data.
In addition, the Personal Information Protection Act(“PIPA”) provides a personal data mechanism, which isapplicable to insurers’ use of data in relation toindividual customers. Under the PIPA, customer data canbe utilized within the purpose of use that an insurancecompany notiﬁes upon its acquisition.

29. To what extent are there additional
restrictions or requirements on sharing
customer data overseas/on a cross-borderbasis?
Article 23 of the Personal Information Protection Act(“PIPA”) provides that transfer of personal data to a third
party requires the person’s advance consent. Exceptions

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for this requirement include (i) opt-out scheme, (ii)outsourcing personal data management within the
purpose of use of the data, (iii) transfer of business; and(iv) joint-use scheme.
However, such exceptions are not applicable to overseas
transfers of personal data and, hence, the person’s
consent will be required for it unless the country where
the transferee of the data exists has the same level of
personal data protection regime as Japan or thetransferee has suﬃcient internal system for personal
data protection. In obtaining such consent, certain
information is required to be provided, including theinformation on the personal data protection system of
the foreign country, and on the actions the transferee
takes for the protection of personal data.

30. To what extent are insurers subject to
ESG regulation or oversight? Are there
regulations/requirements speciﬁc toinsurers? If so, brieﬂy describe the range
measures imposed.
In Japan, there are no regulations speciﬁc to insurers inconnection with ESGs.

31. Over the next ﬁve years what type ofbusiness do you see taking a market lead?
Cyberattacks have come to pose a severe and present
risk that Japanese companies have to cope with, as they
are capable of rendering any countermeasuresineﬀective. The Ministry of Economy, Trade and Industryof Japan issued the Cybersecurity Management Guideline
in December 2015, which clariﬁes that cybersecurity is abusiness challenge and that managements of Japanesecompanies have to take appropriate actions to protect
their companies. Cyberattacks have been signiﬁcantly
increasing – it is reported that the number ofcyberattacks have become more than 7 times in 2021
when compared to 2015. To respond to such situations,insurance companies have developed insurance
products to cover the costs of information leakage ordamages caused by a cyberattack.
Increased longevity may aﬀect the strategy of insurancecompanies. Recently, the Institute of Actuaries of Japan
published the Standard Longevity Table 2018 (previously
amended in 2007), indicating signiﬁcant decreases inprojected death rates. With this trend of further
increasing people’s longevity, it is reported that
insurance companies will lower the fees for life insurance
by 5% to 10% for newly entered insurance contracts. It isalso reported that demands are gradually shifting from

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Insurance & Reinsurance: Japaninsureds become unable to work, reﬂecting theincreased longevity.

life insurance to products covering living costs when theContributors
Hironori Nishikino
Partnernishikino_h@clo.gr.jp

Koji Kanazawa
Partnerkanazawa_k@clo.gr.jp

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