Japan Insurance Industry – Governance, Risk and Compliance
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Japan Insurance Industry Regulation Overview
The insurance industry in Japan is regulated by the Financial Services Agency (FSA). The other bodies that oversee the market are the International Association of Insurance Supervisors (IAIS), the Local Finance Bureau(LFB), and the General Insurance Association of Japan (GIAJ) among others.
The Japan Insurance Industry Governance Regulation research report provides a detailed analysis of the regulations for several insurance types including life, property, motor, and liability. The report also gives insights into recent and upcoming changes in non-admitted insurance regulations, taxation, and the legal system. Also, leverage our elaborate procedural review of new company registrations and operations based on key parameters such as license, FDI, minimum capital requirements, and solvency to better understand market avenues.
Key Regulators | · Financial Services Agency (FSA)
· International Association of Insurance Supervisors (IAIS) · Local Finance Bureau(LFB) · General Insurance Association of Japan (GIAJ) |
Compulsory Insurances | · Motor third-party Liability Insurance
· Marine Liability Insurance · Social Security Insurance · Liability Insurance |
Key Taxes | · Tax on Insurance Premium
· Corporate Income Tax · Corporate Capital Gains Tax · Value Added Tax |
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Japan Insurance Industry – Key Regulators and Legislation
Financial Services Agency (FSA): The Prime Minister of Japan assigns most of the insurance regulatory responsibilities to the FSA. It was established by the Financial Reconstruction Commission of Japan (FRC) in July 2000, to maintain stability in the industry and provide protection to policyholders. The FSA is responsible for the supervision of any kind of insurance operation, but not the issuance of licenses. The Prime Minister of Japan is accountable for issuing or revoking licenses of insurance or reinsurance companies. The primary responsibilities of the FSA include policymaking and supervising private financial organizations among others.
International Association of Insurance Supervisors (IAIS): The IAIS is a membership-driven global organization that represents insurance regulators and supervisors. It formulates and issues various global insurance principles, standards, and guidance, provides training and support on issues related to insurance supervision and organizes meetings and seminars for insurance supervisors. The IAIS works closely with other financial sector standard-setting bodies and international organizations to promote financial stability.
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Japan Insurance Industry - Compulsory Insurance
Some of the key compulsory insurance required within the Japan insurance industry are:
- Motor third-party Liability Insurance
- Marine Liability Insurance
- Social Security Insurance
- Liability insurance
Japan Insurance Industry Analysis by Compulsory Insurances
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Japan Insurance Industry - Company Registration and Operation
Insurers are required to obtain a license to operate in the country. According to Article 3 of the Act, any individual or entity intending to provide insurance policies may only conduct business after obtaining a license from the Prime Minister of Japan. Similarly, reinsurers are required to obtain a license to carry out onshore business. The Insurance Business Act permits direct life and non-life insurers to underwrite respective reinsurance businesses. In addition, intermediaries are required to obtain a license from the LFB to mediate insurance products in the country.
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Japan Insurance Industry – Taxation
Tax is imposed upon insurance premiums within the insurance industry in Japan. The other taxes imposed are Corporate Income Tax, Corporate Capital Gains Tax, and Value Added Tax.
Corporate Income Tax: Any company that has its principal office in Japan is considered a resident company, which is subject to tax on its global income. Whereas, non-resident companies are taxed only on income sourced in Japan. A foreign company with a permanent establishment is taxed only on income derived from that establishment in Japan. Distributions of profits within domestic companies are not considered taxable income.
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Scope
This report provides:
- Details of the insurance regulatory framework in Japan.
- Details of the rules and regulations governing insurance products and insurance entities.
- Lists and analysis of key trends and developments in the country’s insurance regulatory framework.
- Analysis of the rules and regulations on the establishment and operation of insurance businesses in the country.
- Details of the taxation imposed on insurance products and insurance companies.
Key Highlights
- The Financial Services Agency and the Local Finance Bureau of the Ministry of Finance regulate the Japanese insurance industry.
- 100% FDI is permitted in the Japanese insurance industry.
- Composite insurance is not permitted in Japan, however, both life and non-life insurers are permitted to operate accident and health insurance businesses.
- Non-admitted insurance is not permitted in the Japanese insurance industry, with a few exceptions.
- Automobile liability, workers’ accident compensation, and nuclear risk liability are compulsory classes of insurance.
Reasons to Buy
- Insights into the insurance regulatory framework in Japan.
- Provides FAQ-style analytical insights comprising 129 knowledge elements on insurance compliance applicable to the country.
- Track the latest regulatory changes and expected changes impacting the Japan insurance industry.
- Gain detailed information about the key regulations governing the country’s establishment and operation of insurance entities.
- Understand key regulations and market practices on various types of insurance products.
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Frequently asked questions
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Which is the key regulator of the Japan insurance industry?
The Financial Services Agency (FSA) is the key regulator of the Japan insurance industry.
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Which are the other bodies that oversee operations in the Japan insurance industry?
The International Association of Insurance Supervisors (IAIS), the Local Finance Bureau (LFB), and the General Insurance Association of Japan (GIAJ) among others oversee the Japan insurance industry.
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Which are the compulsory insurances required within the Japan insurance industry?
Some of the compulsory insurances required within the Japan insurance industry are motor third-party liability insurance, marine liability insurance, liability insurance, and social security insurance among others.
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What are the types of taxes imposed upon the Japan insurance industry?
Tax is imposed upon insurance premiums within the insurance industry in Japan. The other taxes imposed are Corporate Income Tax, Corporate Capital Gains Tax, and Value Added Tax.
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