Giichi Shirakawa, president of Sompo Japan Insurance, has announced his resignation in response to the firm's handling of potentially false insurance claims made by major auto dealer Bigmotor.

The company stated that a decision will be made about the resignation's timing in the future.

The chairman of the parent company, Kengo Sakurada, provided an update on the situation with Bigmotor at a news conference held by Sompo Holdings and Sompo Japan on Friday.

The insurance company has come under fire for continuing business with Bigmotor in spite of knowledge that the car dealer might have committed fraud. At a board meeting in July 2022, Sompo Japan considered whether to resume business with Bigmotor. Shirakawa pushed for the restart despite acknowledging that there were serious suspicions of fraud.

Shirakawa stated at the press conference that they have made the decision to work with Bigmotor once more, provided that precautions are taken to avoid a repeat of the incident. He expressed regret for making such a hasty judgment and apologized.

Sakurada from Sompo Holdings also expressed their sincere regret for any inconvenience and worry this may have caused.

Allegations included that the used car chain overcharged customers after purposefully causing damage to their vehicles and filing false insurance claims.

In April 2022, Shirakawa was chosen to lead Sompo Japan. He was the youngest leader of a significant financial organization in Japan at the time, at the age of 51.

The financial watchdog in Japan, the Financial Service Agency, is closely observing Sompo Japan's response to the situation. Bigmotor and Sompo Japan have been informed by the agency of a forthcoming on-site inspection. Shunichi Suzuki, the finance minister, stated on Tuesday that they needed to examine their internal control and business management systems.