Insurance Business Act (Hoken Gyōmu Hō)
The Insurance Business Act (Hoken Gyōmu Hō) governs the regulation of insurance companies in Japan. Enacted in 1995, the Act consolidates the regulation of life insurance and non-life insurance businesses. The Act establishes licensing requirements, solvency margin requirements, and the supervision of insurance businesses by the Financial Services Agency. It also regulates insurance agents and brokers.
Legal area: Law governing the regulation of insurance businesses and policyholder protection.
Year enacted: 1995
Full text: https://elaws.e-gov.go.jp/document?lawid=japan-insurance-business-act
Key Provisions
- Chapter I: General provisions (insurance business categories)
- Chapter II: Licensing (capital, governance, business plan)
- Chapter III: Business conduct (policyholder protection, disclosure)
- Chapter IV: Solvency and financial soundness
- Chapter V: Supervision (inspections, corrective orders)
- Chapter VI: Mutual insurance societies and foreign insurers
Significance
The Insurance Business Act provides a comprehensive regulatory framework for Japan’s insurance industry. Japan has a large insurance market, and the Act’s solvency requirements ensure financial stability. The Act has been amended to strengthen consumer protection, including the introduction of a policyholder protection fund. Japan’s insurance sector has been consolidated through mergers following the financial difficulties of the 1990s and 2000s.