Japan's Financial Services Agency has launched interviews with insurers that had business dealings with insurance agency Advance Create, following allegations that insurers may have assisted in concealing improper accounting practices, according to a report by Toyo Keizai.
The investigation centres on Advance Create’s accounting for advertising fees paid by insurers for listings on its insurance information website, Hoken Ichiba.
A third-party committee established by Advance Create found that the company had allegedly recorded advertising revenue before the relevant advertisements were published, with the practice dating back to at least December 2018.
Concerns were raised in 2020 by Sakura Bridge Audit Corporation, which questioned the timing of the advertising revenue recognition. The subsequent investigation found that Advance Create executives allegedly sought to coordinate responses with insurers to avoid the accounting irregularities being uncovered by auditors.
According to the report, some insurers were provided with draft responses to auditors, including statements indicating that their understanding of the transactions matched Advance Create’s records.
The FSA is now seeking to establish the extent to which insurers were aware of, or participated in, the alleged efforts to conceal the accounting issues.
The case highlights wider concerns around governance and oversight in insurer-distributor relationships, particularly where insurers engage intermediaries for advertising and customer acquisition.
The developments come as Japanese regulators continue to place greater emphasis on governance, compliance and transparency across the insurance sector.