The Fair Trade Commission plans to issue cease-and-desist orders to four major nonlife insurers for forming a cartel over premiums for joint insurance contracts for Keisei Electric Railway, in violation of the antimonopoly law, informed sources have said.
The antimonopoly watchdog will make a decision on the orders, including requiring the compilation of measures to prevent a recurrence, after collecting opinions from the four firms — Tokio Marine & Nichido Fire Insurance, Sompo Japan Insurance, Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance. The FTC has already informed them of the planned orders, according to the sources.
The commission notified the four insurers last month of its plan to impose cease-and-desist orders on them for prearranging premiums for joint insurance contracts for the Tokyu group and Sendai International Airport.
According to the sources, the four insurers started to prearrange premiums for the joint contracts for Keisei Electric Railway, in which they shared the risk of covering insurance payments, in December 2019 or earlier.
The FTC plans to fine Tokio Marine & Nichido Fire, Mitsui Sumitomo and Aioi Nissay Dowa a total of ¥120 million. Sompo Japan is expected to avoid the penalty as it voluntarily reported the malpractice under a leniency program, according to the sources.
The commission is also investigating the insurers over contracts for other clients such as Cosmo Oil.
Regarding standalone insurance contracts, the three insurers other than Aioi Nissay Dowa preset successful bidders and bidding prices for tenders held by the Tokyo Metropolitan Government regarding automobile insurance for its official vehicles.
The FTC plans to issue cease-and-desist orders to the three, and Sompo Japan will likely be ordered to pay some ¥35 million in fines.