Sompo Japan, a major liability insurer, has been found to be involved in the fraudulent auto repair shop, BigMotor. Reportedly, BigMotor maipulated or even damaged the cars brough in to their shops, in order to inflate the repair revenue. One would wonder why Sompo Japan would in any way be involved in plain insurance frauds; isn’t the company damaging itself?
The answer is deep rooted and invovles the Japanese judiciary as well It is in fact easy for the insurers to recover the excess repair payments under the insurance coverage by inflating insurance premiums that car owners must pay in the future. Sompo Japan thus enjoys a huge prohite opportubity through BigMotor’s fraudulent repair works.
Of course, the Financial Servics Agency is responsible for supervising the insurance practice, but recovery of individual damanges has to involve the courts. Unfortunately, Japanese consumer class action is virtually limited to organizations authlorized by the government. Whether or not the consumer bodies are fair, they are not innovative or aggressive in remedying damages consumers suffer. We have to wait and see how the bodies will aggressively prosecute these car insurance fraud cases.