--- title: "Insurance Business Act: Licenses and Solicitation" description: "Explains Japan's Insurance Business Act rules on insurance licenses, insurance companies, mutual companies, solicitation, foreign insurers, and supervision." date: 2026-05-31 category: Law Commentary tags: [Finance, Insurance] draft: false --- The [Insurance Business Act](https://elaws.jp/view/407AC0000000105) regulates insurance business, insurance companies, mutual companies, insurance solicitation, foreign insurers, policyholder protection, and supervision. Insurers, intermediaries, insurtech businesses, foreign insurers, compliance teams, and researchers consult it when checking whether a license or registration is needed and which rules apply to insurance companies and solicitation. This article covers selected core provisions of the Act and does not cover actuarial standards, product approval practice, tax, or advice on a particular insurance product. ## Purpose, License, and Insurance Company Form The Act begins with a licensing system for insurance business and statutory limits on who may conduct it. Articles 1, 2, 3, 4, 5, 5-2, 6, 7, 7-2, and 8 are the first provisions to check. Article 1 states that the Act aims to protect policyholders and others by ensuring sound and appropriate operation of persons conducting insurance business and fairness of insurance solicitation, while contributing to stability of national life and sound development of the national economy. Article 2 defines terms including Insurance Business, Insurance Company, Foreign Insurance Company, etc., Life Insurance Company, Non-Life Insurance Company, and insurance solicitation-related terms used later in the statute. Article 3 states that insurance business may not be conducted without a license from the Prime Minister. Article 3(2) provides two license categories: Life Insurance Business License and Non-Life Insurance Business License. Article 3(3) states that the same person may not hold both a Life Insurance Business License and a Non-Life Insurance Business License. Article 4 requires a person seeking a license to submit a license application to the Prime Minister with prescribed matters and attached documents. Article 5 sets license examination standards, and Article 5-2 requires an Insurance Company to be a Stock Company or Mutual Company with the organs listed there. Article 6 requires the capital amount or total fund amount of an Insurance Company to be at least the amount prescribed by Cabinet Order, and states that the Cabinet Order amount may not be below one billion yen. Article 7 requires an Insurance Company to use wording indicating whether it is a Life Insurance Company or Non-Life Insurance Company in its trade name or name, and Article 7-2 prohibits lending the Insurance Company's name to another person for conducting insurance business. ## Stock Company and Mutual Company Rules The Act modifies ordinary company-law rules for insurers and creates special rules for Mutual Companies. Articles 9, 14, 15, 17, 18, 19, 20, 22, 24, 30, 35, 55, and 56 show how corporate form is adjusted for insurance. Article 9 requires a Stock Company conducting insurance business to state in its Articles of Incorporation one of the permitted public notice methods, including newspaper publication or electronic public notice. Article 14 excludes application of the Companies Act shareholder right to inspect accounting books and materials for accounting books of such a Stock Company, while adjusting inspection rights for financial statements so that policyholders and other insurance creditors are included. Article 15 requires reserve accounting when Dividends of Surplus are made. Article 17 gives policyholders and other creditors objection rights when an insurer that is a Stock Company reduces capital or reserves, subject to the detailed procedure and thresholds in that article. Article 18 requires a Stock Company conducting insurance business to obtain Prime Minister approval for dissolution resolutions and for merger, company split, business transfer, and other specified restructuring matters. Article 19 states that an Insurance Company may be a Mutual Company. Article 20 gives a Mutual Company juridical personality. Article 22 requires articles of incorporation for a Mutual Company, and Article 24 provides that policyholders become members of the Mutual Company by entering into insurance contracts, except in the cases stated there. Article 30 requires a Mutual Company to have at least the minimum fund amount prescribed by Cabinet Order. Article 35 concerns member meetings or meetings of representatives, and Articles 55 and 56 provide fund and fund-redemption reserve rules. ## Business, Accounting, and Policyholder Protection The Act regulates the business scope and prudential conduct of Insurance Companies. Articles 97, 98, 99, 100-2, 110, 111, 113, 116, 117, and 118 are important landmarks for operations, disclosure, and reserves. Article 97 states the business that an Insurance Company may conduct according to its license, including underwriting insurance and management of assets. Article 98 allows an Insurance Company to conduct business incidental to insurance business and other business listed there. Article 99 restricts other business unless permitted by the Act or another law. Article 100-2 requires an Insurance Company to take measures necessary to ensure sound and appropriate operation of its business and protection of policyholders and others, including measures prescribed by Cabinet Office Order. Article 110 requires an Insurance Company to prepare business reports and submit them to the Prime Minister, and Article 111 requires public disclosure of explanatory documents concerning business and property status. Article 113 contains rules on policyholder dividends and related accounting for Mutual Companies and other insurers under the article's categories. Article 116 requires an Insurance Company to set aside policy reserves according to Cabinet Office Order. Article 117 requires an Insurance Company to set aside outstanding loss reserves for insurance claims and other payments whose obligation has arisen but payment has not yet been made. Article 118 concerns price fluctuation reserves for assets specified by Cabinet Office Order. These provisions show that insurance regulation is not limited to licensing; it also controls ongoing financial soundness. ## Insurance Solicitation and Intermediaries The Act separately regulates insurance solicitation and intermediaries. Articles 275, 276, 277, 294, 294-2, 295, 300, 305, 306, and 307 are core provisions for sales and distribution. Article 275 limits persons who may conduct Insurance Solicitation, including officers and employees of Insurance Companies, Life Insurance Solicitors, Non-Life Insurance Agents, and Insurance Brokers, according to the categories stated there. Article 276 requires registration for Life Insurance Solicitors and Non-Life Insurance Agents, and Article 277 requires registration for Insurance Brokers. These provisions are separate from the insurer license in Article 3. Article 294 requires specified persons conducting Insurance Solicitation to provide customers with information concerning the insurance contract before conclusion, according to Cabinet Office Order. Article 294-2 requires confirmation of customer intention in specified cases. Article 295 restricts self-contracting and related conduct by Insurance Brokers. Article 300 prohibits listed improper solicitation acts, including false statements, failure to state important matters, acts impairing customer judgment, and other conduct stated there. Article 305 authorizes the Prime Minister to order reports or materials from insurance solicitors and related persons where necessary. Article 306 authorizes on-site inspections of insurance solicitors and related persons. Article 307 allows cancellation of registration or other supervisory measures for specified violations by Life Insurance Solicitors, Non-Life Insurance Agents, and Insurance Brokers. ## Foreign Insurers and Supervision Foreign insurers and supervisory measures appear in later parts of the Act. Articles 185, 186, 187, 190, 200, 204, 305, 311, 312, and 313 are useful entry points. Article 185 prohibits a Foreign Insurance Company, etc. from conducting insurance business in Japan without a license from the Prime Minister. Article 186 requires a license application for a Foreign Insurance Company, etc., and Article 187 sets license examination standards. Article 190 requires a Foreign Insurance Company, etc. to deposit assets as prescribed by Cabinet Order. Article 200 applies or adapts many Insurance Company provisions to Foreign Insurance Companies, etc. Article 204 concerns notification and approval for changes affecting a Foreign Insurance Company, etc. Article 311 authorizes the Prime Minister to order an Insurance Company or related person to submit reports or materials where necessary for supervision. Article 312 authorizes on-site inspections, and Article 313 allows business improvement orders, suspension orders, or license cancellation where statutory grounds exist. The Act therefore has several regulatory gates: an insurance-business license for insurers, special corporate-form and solvency rules, registration and conduct rules for solicitation, and separate licensing and deposit rules for Foreign Insurance Companies, etc.