The Financial Services Agency (FSA) has drafted changes to its comprehensive supervisory guidelines for insurers that would tighten the limit on in-house insurance agencies, the intermediaries owned by or closely tied to the companies whose policies they sell. The agency released the draft on 11 September 2026, and the public comment period ended at 17:00 on 13 October. The FSA says the guidelines will apply after the comment process and the necessary procedures.
What the draft changes
The FSA describes an in-house agency as one with close personal or capital ties to a non-insurance business. It mainly handles that company's group policies, such as fire and liability cover, plus group employee benefit policies. The agency says such agencies may survive on commission income from non-life insurers on group business even where their practical sales ability is inadequate. It also says the commissions may amount to a de facto premium discount.
The existing guideline already treats an agency as mainly selling to related parties when those "specific contracts" exceed half of the premiums it handles. The draft keeps that test but changes what counts and what is exempt. A transitional measure now limits the calculation to auto, fire and accident lines for agencies registered on or before 31 March 1996 that meet certain conditions. The draft ends it, so all lines count.
The draft would also widen the definition of related parties to the holder of more than 50% of the agency's voting rights, directly or indirectly, and that holder's subsidiaries.
| Measure | Applies from | What changes |
|---|---|---|
| End of transitional measure | April 2030 | Related-party test covers all insurance lines, not only fire, auto and accident |
| Exemption framework | April 2030 | Agencies meeting commission and independence requirements are exempt |
| Wider related-party range | April 2032 | Range extends to holders of more than 50% of voting rights |
An exemption with conditions
The draft adds an exemption for agencies that meet two sets of requirements. The first is that commissions on specific contracts do not produce a substantive discount or rebate of premiums. The second is that the agency has enough practical ability and independence from its parent. That means it can identify, manage and report its own specific contracts, has an antitrust compliance structure, and runs three-lines risk management.
In the draft's mechanism, the agency reports its costs to its lead insurer with supporting financial statements, and the insurer calculates a commission that does not exceed those costs. The insurer then explains the amount and its basis to the agency and checks that it is reasonable. The draft also exempts contracts where an insurance broker is paid its brokerage fee only by the customer.
The FSA would monitor specific-contract handling through off-site monitoring and reporting demands. Where it finds serious problems, the draft provides for administrative action.
The wider package
The FSA links the draft to reports from a June 2024 expert panel and a December 2024 Financial System Council working group. Other changes in the draft include:
- Insurers and agencies must have antitrust compliance controls. The draft cites past premium-adjustment cases, and insurers forming a co-insurance arrangement must first verify why it is needed.
- Non-life insurers must set out a management framework for checking that corporate premium rates are adequate and fair, including discount and loading practices.
- Separate registration of an agency's branches is abolished.
The release gives no date for the final guidelines.