（Original Video in Japanese was published on the FINOLAB CHANNEL on May. 19, 2026 by Makoto Shibata）　https://youtu.be/sHw7NkkiDTg

Japan’s revised Insurance Business Act, which will take effect in June 2026, represents the most significant reform of insurance regulation since 2014. The amendment is designed to address a series of misconduct cases that have undermined trust in the insurance industry and to promote a more customer-centric insurance distribution model. At the same time, the reform is expected to accelerate digital transformation and create substantial opportunities for InsurTech companies.

The regulatory changes were prompted by several high-profile scandals. These included allegations of premium coordination among major non-life insurers, fraudulent insurance claims associated with automobile dealer Big Motor, conflicts of interest within insurance agencies, and incidents involving the unauthorized sharing of customer information by secondees. Collectively, these cases exposed weaknesses in governance, compliance, and customer protection across the insurance sector.

In response, the revised law introduces stronger governance and compliance requirements for large-scale insurance agencies and insurance companies. Major agency groups will be required to appoint compliance officers, establish complaint-handling frameworks, strengthen internal controls, and implement whistleblowing and internal audit systems. Insurance companies will also face enhanced oversight responsibilities when outsourcing sales activities to agencies. Furthermore, the reform prohibits excessive benefits or incentives that could distort fair insurance recommendations.

Perhaps the most important change concerns insurance sales practices. Historically, many agencies recommended products based on their own internal criteria, commission structures, or preferred partnerships with insurers. Under the revised framework, agencies will be expected to recommend products based on customers’ actual needs and interests. They must provide clear explanations of why a particular product was selected, document comparison criteria, and maintain records of the recommendation process. This significantly increases the importance of transparency, accountability, and evidence-based sales practices.

As a result, the insurance industry is likely to undergo several structural shifts. Sales activities will move away from individual salesperson judgment and toward data-driven decision-making. Business models focused primarily on product sales will increasingly evolve into customer-value-centered models. Documentation, auditability, and evidence management will become critical capabilities. In addition, smaller agencies may face increasing compliance burdens, potentially accelerating industry consolidation.

These developments create a favorable environment for InsurTech innovation. Demand is expected to grow for AI-powered comparison and recommendation tools, explainable AI systems, compliance monitoring solutions, and software platforms that manage sales processes and regulatory requirements. Technologies such as eKYC, digital signatures, voice-recording tools, and RegTech solutions will become increasingly important. Embedded insurance models are also expected to expand as insurers seek more efficient and customer-friendly distribution channels.

Several Japanese InsurTech companies are already well positioned to benefit from these trends. Sasuke Financial Lab operates digital insurance comparison services that provide access to products from numerous insurers. Hokan offers SaaS solutions that integrate customer information, policy management, compliance controls, and sales records for insurance agencies. Finatext’s Inspire platform supports digital insurance distribution and embedded insurance services while enabling rapid product deployment and system integration.

In conclusion, the 2026 revision of Japan’s Insurance Business Act is more than a regulatory compliance initiative. It represents a fundamental shift toward customer-centricity, transparency, and operational excellence. As insurers and agencies adapt to these new requirements, digitalization and AI adoption are likely to accelerate. The ability to demonstrate customer benefit and maintain transparent decision-making processes will become a key competitive advantage, creating significant growth opportunities for InsurTech firms and technology providers across the insurance ecosystem.