Japan: the insurance concept in the Insurance Act and the Insurance Business Act

In Japan, there are primarily two acts that govern the laws and regulation of insurance; the Insurance Act, which regulates insurance contractual relationships, and the Insurance Business Act, which regulates insurance business operators. The Insurance Business Act provides for penalties, including imprisonment, for those who engage in the insurance business without a license and so on. However, it is not always clear under either law what constitutes an insurance business. Therefore, it continues to be debated whether new services similar to insurance, or schemes that receive a fee in advance of the occurrence of a loss and provide money, repairs, or other services in the event of a loss, constitute insurance. This chapter provides an overview of insurance law and regulation in Japan and discusses the definition of insurance under the Insurance Business Act in light of the relationship between the two laws, as well as the Japanese Financial Services Agency's approach.