Distribution practices under fiduciary duties

Emphasising that tax-saving is not core values of insurance, the FSA is further promoting customer-oriented business operations and collaboration with the National Tax Authority. We recognise that the FSA encourages insurers including brokers to conduct its fiduciary duties. Along with promoting fiduciary duties, the FSA has been investigating the brokers’ fee system. The EBC, furthermore, appreciates the focus on the benefit of the customers, and also the possibility for industry, including European insurers, to leave comments. A statutory obligation to look out for the best interests of customers is planned. The EBC agrees with the purpose of clarifying the obligation, but would like to remind insurers that their actions should not be unnecessarily constrained. On the other hand, we believe that the current rule could be a barrier for new entrants and may not be beneficial to Japanese consumers, unbalancing with the potential risk of mis-selling. For example, insurance sales by an incorporated insurance agency to members of its parent and affiliated companies are restricted to so-called “third sector” products (“koseiin-kisei”).


  • The EBC recommends that the FSA continue to work closely with industry without drastic changes that may badly affect consumers.
  • The FSA should carefully make certain that sales of innovative products are not hampered, for instance under a low-interest rate environment, while ensuring that fiduciary duties are fulfilled.
  • The FSA should consider relaxing the restriction of abovementioned “koseiin kisei”, beyond “third sector” products.
  • Taking into account emerging new technology and evolving insurance distribution, the FSA should review the related regulations, and present a roadmap for further deregulation for the benefit of Japanese consumers.
  • When looking into distribution practices, the FSA should put more emphasis on enabling the customer to choose from a wider product portfolio.