Insurance brokers have long played a pivotal role in the reinsurance market. Foreign insurers without branch offices in Japan are generally prohibited from concluding insurance contracts covering persons domiciled or resident in Japan, property located in Japan, or vessels or aircraft of Japanese nationality¹. Reinsurance contracts, however, are expressly excepted from this prohibition, and only insurance brokers are permitted to solicit reinsurance contracts to be concluded by such foreign insurers. Consequently, insurance brokers have developed a particular expertise in reinsurance.

A cartel incident arising from an unsound competitive environment in the corporate insurance market prompted the Financial Services Agency of Japan (FSA) to implement a series of regulatory reforms concerning insurance brokers. In the corporate insurance market, factors such as preferential treatment afforded to policyholders, rather than the substance of insurance products and premium levels, had influenced the allocation of contracts. This tendency eroded sales representatives’ willingness to compete fairly, thereby impeding sound competition². Moreover, the prohibition on cooperation between insurance brokers and insurance agents had effectively excluded insurance brokers from the corporate insurance market. This was because "in-house agents" (that is, insurance agents affiliated with corporate groups that were themselves policyholders) handled a very large proportion of insurance contracts for their own groups. As one measure to remedy this unhealthy environment, the FSA sought to revitalize insurance brokers, viewing their enhanced participation as a means of diversifying sales channels, stimulating competition, and steering Japan’s insurance market toward a sounder competitive landscape³.

The amendments to the insurance broker regime are wide-ranging. Among the most significant is the lifting of the above-mentioned prohibition on cooperation between insurance brokers and insurance agents. The revision of the "Comprehensive Guidelines for Insurance Companies" (the "Guidelines")⁴ removed this prohibition, enabling insurance brokers to coordinate with insurance agents with effect from June 1, 2026. In lieu of the former prohibition, insurance brokers are now required to explain the distinction between the respective roles of insurance brokers and insurance agents as well as the division of business responsibilities agreed between them (encompassing the anticipated volume of work and the allocation ratio of responsibilities), and to obtain, before engaging in insurance intermediary services, the consent of the customer. In addition, insurance agents are required to explain the division of business responsibilities between them and the insurance broker, and to obtain the consent of the insurance companies⁵.

With respect to reinsurance, the rules governing the method of claiming commissions, fees, and other consideration (collectively, "Consideration") for the brokerage of reinsurance contracts have also been amended⁶. Prior to the amendment, insurance brokers were not permitted to charge Consideration directly to customers. Under the revised Guidelines that took effect on August 28, 2025, the FSA elected not to prescribe specific rules on the method of claiming Consideration in connection with the brokerage of reinsurance contracts. This approach reflects the view that it is sufficient for brokers to conduct their business in a manner consistent with market trading customs and norms, applicable laws and regulations, and public order and morals. The rationale is that the brokerage of reinsurance contracts may involve contracts with foreign reinsurance companies, and insurance business practices differ from jurisdiction to jurisdiction⁷.

Beyond the recent reforms, further discussions are anticipated regarding the revitalization of insurance brokers and the establishment of a regulatory framework for reinsurance captives. The FSA has indicated that, should further review of the insurance broker regime be deemed necessary⁸, it will proceed with additional regulatory examination⁹. In addition, a reinsurance captive regime is expected to be established through legislative reforms in the following year, driven by strong domestic demand for the establishment of captives in Japan amid concerns over foreign exchange fluctuations and regulatory change risks¹⁰. The Financial System Council of the FSA is expected to convene several meetings later this year in preparation for the relevant reforms.

¹ Article 186, Paragraph 1 of the Insurance Business Act of Japan (Act 105 of 1995, as amended; the "IBA").

² FSA, the Report of the "Expert Panel on Structural Issues in the Non-Life Insurance Industry and the Future of Competition – Toward the Sound Development of Japan’s Insurance Market", pp.17-19
(https://www.fsa.go.jp/singi/sonpo/houkokusyo.pdf (In Japanese))

³ FSA, the Report of the "Working Group on Systems and Other Matters Related to the Non-Life Insurance Industry, etc." pp.11-12.
(https://www.fsa.go.jp/singi/singi_kinyu/tosin/20241225/1.pdf (In Japanese))

⁴ https://www.fsa.go.jp/common/law/guide/ins.pdf (In Japanese)

⁵ V-4-1(2) of the Guidelines.

⁶ The method of claiming Consideration with respect to insurance contracts (other than reinsurance contracts) in the corporate insurance market has also been amended to permit insurance brokers to claim directly from their own clients (V-4-4(1) of the Guidelines).

⁷ Nos. 389 and 390 of the responses to public comments (August 28, 2025)
(https://www.fsa.go.jp/news/r7/hoken/20250828/01.pdf (In Japanese))

⁸ The amendment act of the IBA was submitted to the Diet on March 7, 2025
(https://www.fsa.go.jp/en/newsletter/weekly2025/628.html), and approved on May 30, 2025. This amendment and other amendments to laws and regulations related thereto also include some rules to promote the active use of insurance brokers. They were implemented on June 1, 2026.

⁹ FSA, the Report of the "Study Group on Advancing Corporate Risk Management" (April 17, 2026), p.43
(https://www.fsa.go.jp/singi/riskmanagement/houkokusyo.pdf (In Japanese))

¹⁰ Cabinet Secretariat (Headquarters for Japan’s Growth Strategy), "Financial Strategy for Promoting Growth Investment – Upgrading 'Promoting Japan as a Leading Asset Management Center'"
(https://www.cas.go.jp/jp/seisaku/nipponseichosenryaku/kinyu/pdf/financialservicesstrategy2026.pdf (In Japanese))