Chapter I General Provisions

(Purpose) Article 1. The purpose of this Law is to regulate the conduct of an insurance business in Japan by foreign insurers on an equitable basis with the Japanese insurers.

(Definitions) Article 2. A "foreign insurer" as used in this Law shall mean any individual or any juridical person authorised under the laws of a nation other than Japan to carry on an insurance business chiefly outside of Japan, and shall be either a foreign life insurer or a foreign non-life insurer. 2 A "country of domicile" as used in this Law shall mean the country under whose laws and orders a foreign insurer was formed or commenced its business. 3 A "principal office" as used in this Law shall mean an office designated by a foreign insurer as its principal place of business among its branch offices, subordinate offices or other offices of such insurer or offices of persons engaged in soliciting. 4 The "soliciting" as used in this Law shall mean the soliciting provided for in Article 2 paragraph 3 of the Law concerning the Control of Insurance Soliciting (Law No.171 of 1948).

Chapter II License and Commencement of Business

(License) Article 3. No foreign insurer shall carry on insurance business in Japan unless a license is first obtained from the Minister of Finance. 2 No person shall aid in transacting insurance business in Japan with, or on behalf of, a foreign insurer which is not licensed in Japan.

(Application for License and Documents to Be Attached Thereto) Article 4. To apply for a license a foreign insurer shall file with the Minister of Finance an application showing: (1) The name of the country of its domicile, its name or trade name, location of its head office or principal office, and date of its formation or of the commencement of business (In case of a juridical person, the name and address of its representative shall be added); (2) The kinds of life insurance business or of non-life insurance business it proposes to carry on in Japan; (3) The name and address of its representative in Japan; (4) The name and address of its principal office in Japan. 2 To the application of the preceding paragraph shall be attached a certificate issued by the competent authorities of the country of its domicile certifying that such foreign insurer was duly incorporated or has duly commenced business, and that it is duly carrying on in its country of domicile the same kinds of insurance business as the kinds of life insurance business or non-life insurance business which it proposes to carry on in Japan. 3 To the application of the first paragraph shall be attached a certified copy of appointment and authority of its representative in Japan. 4 In addition to the documents provided for in the preceding two paragraphs, the following documents shall be attached to the application of the first paragraph: (1) Articles of Incorporation or documents of the like kind; (2) Documents showing the method of business to be conducted in Japan; (3) General policy conditions of insurance to be used for insurance contracts to be concluded in Japan; (4) In case of a life insurer, documents showing the methods of calculating premiums and reserve liabilities for insurance contracts to be concluded in Japan; (5) In case of a non-life insurer, documents showing the schedule of premium rates and the method of calculating unearned premium reserve for insurance contracts to be concluded in Japan; (6) The latest inventory, balance sheet and profit and loss account; (7) Other documents deemed necessary by the Minister of Finance. 5 Matters to be stated in the documents mentioned in items (2) to (5) inclusive of the preceding paragraph may be specified by the Ministry of Finance Ordinance. 6 The Minister of Finance may grant a license of Article 3 paragraph 1 in a case where a foreign insurer adopts the method of calculating reserve liabilities mentioned in item (4) and unearned premium reserve mentioned in paragraph 4 item (5) in accordance with the laws and regulations of the country of its domicile.

(Approval of Alterations in the Kind of Insurance Business) Article 5. In case a foreign insurer intends to make alterations in the kinds of business in regard to the life insurance or non-life insurance or to carry on a new kind of life or non-life insurance business, it shall obtain approval from the Minister of Finance in accordance with the provisions of the Ministry of Finance Ordinance.

(Public Notice) Article 6. In case the Minister of Finance has granted a license of Article 3 paragraph 1, he shall, without delay, make a public notice by official notification to that effect and of the items mentioned in Article 4 paragraph 1, and in case where he has granted an approval of the preceding Article, to that effect only.

(Report and Public Notice of Alteration in Matters Mentioned in Application) Article 7. In case any change has taken place in regard to the matters mentioned in Article 4 paragraph 1, except the case coming under Article 5, a foreign insurer shall, without delay, report the Minister of Finance to that effect and make public notice thereof. 2 The provisions of Article 4 paragraph 2 and 3 shall, correspondingly apply to the reporting of the preceding paragraph. 3 The provisions of Article 144 (Method of public notice) of the Law concerning the Proceedings for Non-Contentious Matters (Law No.14 of 1898) shall correspondingly apply to the public notice of paragraph 1.

(Deposit) Article 8. No foreign insurer shall commence its business in Japan until and unless it has made a deposit of ten million yen. 2 The Minister of Finance may, when he deems it necessary, order a foreign insurer prior to its commencement of business, to make a deposit of an amount which he deems reasonable, in addition to the amount of deposit mentioned in the preceding paragraph. 3 A foreign insurer may substitute for the deposit of the preceding two paragraphs, Government bonds or other securities approved by the Minister of Finance.

(Priority Right on the Deposit) Article 9. Persons effecting the insurance, insureds or beneficiaries, in Japan, or members in Japan of a foreign mutual company (including foreign juridical persons of the like kind;hereinafter the same) shall be entitled to a priority right to the deposit mentioned in paragraph 1 or 2 of the preceding Article, in Article 9 of the Insurance Business Law (Law No.41 of 1939) correspondingly applicable under Article 19 of this Law and in Article 136 of the same Law correspondingly applicable under Article 27 of this Law. 2 General creditors in Japan of a foreign mutual company shall be entitled to a priority right to the deposit mentioned in the preceding paragraph over members, insurers and beneficiaries, in Japan, of such foreign mutual company.

(Representative in Japan) Article 10. The provisions of Article 78 (power of representative) of the Commercial Code (Law No.48 of 1899) shall correspondingly apply to a representative in Japan of a foreign insurer. 2 A representative in Japan shall, even after the retirement from his post, have the rights and duties as such until after the registration of Article 479 paragraph 2 of the Commercial Code and the filing and public notice of Article 7 paragraph 1 in respect to the name and address of a representative who is to take his place.

Chapter III Business

(Business Report) Article 11. A foreign insurer shall prepare each year a report of its business in Japan and file the same with the Minister of Finance. 2 The form and the time of filing of the report of the preceding paragraph shall be designated by the Minister of Finance Ordinance.

(Filing of the Documents Regarding Statement of Account of Head Office) Article 12. A foreign insurer shall file with the Minister of Finance, within a reasonable time after the close of each business year, an inventory, balance sheet, business report and profit and loss account prepared annually by its head office.

(Calculation of Liability Reserves, etc.) Article 13. A representative in Japan of a foreign insurer shall, at a time designated by the Ministry of Finance Ordinance mentioned in Article 11, paragraph 2, calculate and record reserve liabilities (including unearned premium reserve and reserve for outstanding claims) according to the kinds of risks with regard to the insurance contracts in Japan.

(Assets of a Foreign Life Insurer) Article 14. A foreign life insurer shall hold in Japan, in the form of assets an amount to be expressed in Japanese yen, a sum corresponding to reserve liabilities in respect to those life insurance contracts in Japanese currency arising out of its life insurance contracts written in Japan.

(Assets of a Foreign Non-life Insurer) Article 15. A foreign non-life insurer shall hold in Japan, in the form of assets an amount to be expressed in Japanese yen, a sum corresponding to the unearned portion of premiums, less reinsurance premiums, in respect to those non-life insurance contracts in Japanese currency arising out of its non-life insurance contracts written in Japan. 2 The reinsurance premiums mentioned in the preceding paragraph shall be only those premiums paid in Japanese currency to the insurer licensed under the Insurance Business Law or this Law.

(Insurance Contracts in Foreign Currencies) Article 16. In case where a foreign insurer intends to write insurance contracts for amounts in foreign currencies, it shall obtain an approval of the Minister of Finance.

(Articles of Incorporation, etc. to be kept) Article 17. A representative in Japan of a foreign insurer shall keep at its principal office in Japan its Articles of Incorporation or documents of the like kind, a list of members in Japan and the documents mentioned in Article 11 paragraph 1 and Article 12. 2 The provisions in Article 83 (Perusal of account documents, etc.) of the Insurance Business Law shall correspondingly apply to the documents mentioned in the preceding paragraph.

(Corresponding Application of Provisions of the Commercial Code) Article 18. The following provisions of the Commercial Code shall correspondingly apply to a foreign mutual company: Articles 19 to 21 inclusive (registration and protection of trade name), Articles 30 and 31 (cessation of use of trade name), and Chapter V (trade books), Chapter VI (Trade employees)(excluding Article 44 (power of an employee at a shop which has for its object the sale of goods)), and Chapter VII (commercial agent)(excluding Article 49 (power of a commercial agent entrusted with the sale of goods or with acting as intermediary in respect thereof)).

(Corresponding Application of Provisions of the Insurance Business Law) Article 19. The following provisions of the Insurance Business Law shall correspondingly apply to the insurance business carried on by a foreign insurer: The main body of Article 5 paragraph 1 (prohibition of carrying on any other business) and Articles 6 to 10 inclusive (principle for an executive officer to attend solely to his company's business;prohibition of carrying on concurrently life and non-life insurance business;report and examination;supervisory order;and alterations in the fundamental documents) and Article 127 (prohibition of transfer of business).

Chapter IV Revocation of License and Discontinuance of Business

(Filing of Dissolution and Discontinuance of Business) Article 20. In case a foreign insurer has discontinued its business or has been dissolved or has ceased to continue its business in Japan, it shall, without delay, file with the Minister of Finance the report thereof. 2 On the day of such filing, the license issued by the Minister of Finance to such foreign insurer shall become invalid. 3 In case a foreign insurer has ceased to continue a kind of its business in Japan, it shall, without delay, file with the Minister of Finance the report thereof.

(Transfer of Insurance Contracts En Bloc) Article 21. A foreign insurer may, by contract, transfer en bloc all insurance contracts in Japan which have the same basis of calculating liability reserve, to another insurer transacting business in Japan. 2 The provisions of Article 110 (only such part thereof as relating to the transfer of insurance contract), Article 111 paragraph 2, Article 112 paragraphs 1 to 3 inclusive and Articles 113 to 118 inclusive (concerning transfer of insurance contracts) of the Insurance Business Law shall correspondingly apply to the case of the preceding paragraph. In this case the "date of the resolution set forth in Article 109" appearing in Article 112 paragraph 1 of the said Law shall read the "date of the execution of the contract of transfer" , the "time of the resolution of a general meeting of shareholders or members" appearing in Article 113 and Article 115 paragraph 1 of the said Law shall read the "time of the execution of the contract of transfer" and likewise "after the resolution of a transfer of insurance contracts" appearing in Article 117 paragraph 2 of the said Law shall read "after the execution of the contract of transfer" . 3 Of those provisions referred to in the preceding paragraph, the provisions regarding the resolution of a general meeting shall not correspondingly apply to a foreign insurer. 4 In case a foreign insurer has transferred all its insurance contracts in Japan, it shall be deemed to have discontinued its business in Japan.

(Suspension of Business, Order of Dismissal of Representative and Revocation of License) Article 22. In case a foreign insurer has violated any law or regulation or any order of the Minister of Finance, the Minister of Finance may order to suspend its business in Japan or to dismiss its representative, or revoke the license or the approval of Article 5. 2 In case of making disposal in compliance with the provisions of the preceding paragraph, the Minister of Finance shall have the open hearing. 3 As to the open hearing under the preceding paragraph, the Minister of Finance shall inform the foreign insurer concerned of the reason for making disposal under the paragraph 1, as well as the date and the place of the open hearing, not later than two weeks prior to that date and make public the date and the place of the open hearing. 4 At the open hearing, the foreign insurer concerned or his proxy may present himself, give explanations for his sake and submit advantageous proofs. 5 When the Minister of Finance has revoked the license, he shall, without delay after such disposition has become final, notify to the registration office at the place where its branch office or subordinate office is located. 6 When the registration office has received the notice of the preceding paragraph, it shall expunge the registration of such branch office or subordinate office.

(Order of Suspension of Business, Management, and Transfer of Insurance Contracts) Article 23. In case the Minister of Finance finds, in view of the conditions of business or assets of a foreign insurer, that it is difficult or improper for its business in Japan to be continued, he may order suspension of its business in Japan, management of its business and assets in Japan or transfer of its insurance contracts in Japan. 2 The provisions of the paragraphs 2 to 4 inclusive of the preceding Article shall apply mutatis mutandis to the disposal under the preceding paragraph. 3 The provisions of Articles 101 to 103 inclusive, paragraph 1 and the former part of paragraph 3 of Article 104, Article 105 (only such part thereof as relating to the transfer of insurance contracts) and Article 106 (Management of business and assets) of the Insurance Business Law shall correspondingly apply to the case where the order of the management of business and assets under the preceding paragraph was made, and the provisions of Article 103, paragraph 1 and the former part of paragraph 3 of Article 104, Article 117, Article 118 and Articles 121 to 125 inclusive of the same Law and of Articles 12 to 14 inclusive (concerning transfer of insurance contracts by order) of the Ordinance concerning the Enforcement of the Insurance Business Law (Imperial Ordinance No.904 of 1939) shall correspondingly apply to the case where the order of the transfer of insurance contracts under the preceding paragraph was made. In this case "after the resolution of a transfer of insurance contracts" appearing in Article 117 paragraph 2 of the Insurance Business Law shall read "after the execution of the contract of transfer of insurance contracts" , and likewise "each company" appearing in Article 121 paragraph 3 of the same Law shall read "a Japanese company which is the other contracting party" and "the time of the resolution of a general meeting of shareholders of members" appearing in Article 115 paragraph 1 of the same Law, correspondingly applicable under Article 122 paragraph 3 of the same Law, shall read "the time of execution of the contract of transfer" . 4 Among those provisions referred to in the preceding paragraph, the provisions relative to the resolution of a general meeting shall not correspondingly apply to a foreign company.

(Public Notice of Discontinuance of Business and of Revocation of License) Article 24. In case a foreign insurer has discontinued its business or has been dissolved or has discontinued the whole or a kind of its business in Japan or has had its license or the approval of Article 5 revoked, the Minister of Finance shall make public notice by official notification to that effective without delay.

(Claim for Return of Deposit) Article 25. In case a foreign insurer has discontinued its business or has been dissolved or has discontinued its business in Japan or has had its license revoked, it shall not be entitled to claim for return of the deposit until and unless it has made full payment to the persons having priority rights under the provisions of Article 9 or has offered a security.

(Persons to Conduct Remaining Business) Article 26. In case a foreign insurer has discontinued its business or has been dissolved or has discontinued its business in Japan or has had its license revoked, the Minister of Finance shall, if he deems it necessary, appoint or dismiss the person who conducts the remaining business. 2 The provisions of Article 10 paragraph 1 of this Law and of Article 133 (remuneration to the liquidators appointed by the competent minister) of the Insurance Business Law shall correspondingly apply to the person who conducts the remaining business of the preceding paragraph.

(Corresponding Application of Article 136 of the Insurance Business Law) Article 27. The provisions of Article 136 (supervisory order on liquidation) of the Insurance Business Law shall correspondingly apply to the case where a foreign insurer, which has discontinued its business or has been dissolved or has discontinued its business in Japan or has had its license revoked, conducts the remaining business.

(Corresponding Application of Article 134 of the Insurance Business Law) Article 28. The provisions of Article 134 (payment of claims, etc. after dissolution) of the Insurance Business Law shall correspondingly apply to the case where a foreign insurer has discontinued its business or has been dissolved or has discontinued its business in Japan or has had its license revoked.

(Corresponding Application of Articles 484 and 485 of the Commercial Code) Article 29. The provisions of Article 484 (order to close a branch office) and Article 485 paragraphs 1 and 2 (liquidation of assets in Japan) of the Commercial Code shall correspondingly apply to the case where a foreign insurer has established its subordinate office or other office in Japan or where a person who makes the soliciting solely on behalf of a foreign insurer has established its business office.

Chapter V Registration

(Corresponding Application of Provisions of the Commercial Code) Article 30. The provisions of Article 9 (Commercial register), Articles 11 to 15 inclusive (public notice and its effect of matters entered in commercial register) and Article 61 (time of commencement of the period for registration) of the Commercial Code shall correspondingly apply to a foreign mutual company.

(Register) Article 31. Each registration office shall maintain a register for a foreign mutual company.

(Application for Registration) Article 32. In case a foreign mutual company, which has established an office in Japan, applies for registration thereof, its representative in Japan must state in the application its principal office and the name and address of its representative in Japan, and appending thereto the documents mentioned below: (1) A document by which the existence of a principal office is sufficiently made recognizabe; (2) A document showing the qualifications of the representative as such: (3) Articles of Incorporation or document sufficient to render the nature of the company congnizable. 2 The documents mentioned in items (1) to (3) inclusive of the preceding paragraph must be certified by the competent authorities of the country to which the company belongs.

(Corresponding Application of Provisions of the Law concerning the Proceedings for Non-Contentious Matters) Article 33. The provisions (concerning registration of non-contentious commercial matters) of Article 126 paragraph 3, Article 135-(9) paragraph 3, Article 138-(16), Article 139, Article 139-(2), Articles 142 to 149 inclusive, Article 150-(2), Article 150-(4), Article 150-(5), Articles 151 to 151-(4), inclusive Article 151-(6), Articles 154 to 158 inclusive, Articles 172 to 175 inclusive, Article 176, Article 177, Article 178 and Articles 203 to 205 inclusive of the Law concerning the Proceedings for Non-Contentious Matters shall correspondingly apply to foreign mutual company.

Chapter VI Penal Provisions

Article 34. Persons coming under any one of the following items shall be liable to a fine not exceeding five thousand yen: (1) Those who have violated the provisions of Article 3 paragraph 1 or 2; (2) Those who have violated the provisions of Article 5; (3) Those who have violated the provisions of Article 14; (4) Those who have violated the provisions of Article 15 paragraph 1.

Article 35. In case a representative of a juridical person (inclusive of any unincorporated "Shadan (Associational entity)" or "Zaidan (Foundation)" having its representative or administrator;hereinafter the same in this paragraph) or any agent, employee or other persons engaged in business of a juridical person or a person has committed any of the offences mentioned in the preceding Article, in connection with the business of such juridical person or person, such juridical person or person shall be liable to a penalty provided for in the same Article applicable thereto, in addition to punishment imposed upon the person who has committed such offence. 2 In case an unincorporated "Shadan" or "Zaidan" is punishable under the provisions of the preceding paragraph, its representative or administrator shall represent such "Shadan" or "Zaidan" in respect of its legal proceedings and also the law relating to criminal procedures in which such juridical person is defendant shall correspondingly apply thereto.

Article 36. In case a representative, manager, insurance administrator, liquidator or person who conducts the remaining business of a foreign insurer has committed an act coming under any one of the following items shall be liable to a fine not exceeding five thousand yen;this shall not, however, apply in the case where such act is subject to a criminal punishment: (1) When he has violated the provisions of Article 5 paragraph 1 of the Insurance Business Law correspondingly applicable under Article 19; (2) When he has failed to make a report, or has made false statements or has refused, interrupted or evaded a perusal or examination provided for in the provisions of Article 8 of the Insurance Business Law correspondingly applicable under Article 19; (3) When he has failed to make calculation of reserve liabilities, unearned premium reserve or reserve for outstanding claim in contravention of the provisions of Article 13; (4) When he has violated the order of the court provided for in Article 484 or Article 485 paragraph 1 of the Commercial Code correspondingly applicable under Article 29; (5) When he has violated the provisions of Article 8 paragraph 1; (6) When he has violated the order of the Minister of Finance provided for in Article 101 paragraph 4 of the Insurance Business Law correspondingly applicable under Article 8 paragraph 2, Article 22 paragraph 1, Article 23 paragraph 1, Article 23 paragraph 3, or in Article 136 of the Insurance Business Law correspondingly applicable under Article 27 of this Law; (7) When he has failed to make a registration or made a false registration provided for in Chapter V; (8) When he has failed to make public notice or filing or has made false public notice or filing provided for in Article 7 paragraph 1, Article 20 paragraph 1 or 3 of this Law, or in Article 10 paragraph 4 of the Insurance Business Law correspondingly applicable under Article 19 of this Law; (9) When he has failed to file a report mentioned in Article 11 paragraph 1 or filed a report with false statements therein; (10) When he has failed to file an inventory, balance sheet, business report and profit and loss account mentioned in Article 12 or filed these documents with false statements therein; (11) When he has failed to keep the documents mentioned in Article 17 paragraph 1, or to state matters to be stated therein or made false statements therein; (12) When he refused, without just cause, the perusal of the documents mentioned in Article 17 paragraph 1 or the delivery of the certified copy or extract thereof; (13) When he has violated the provisions of Article 16 of this Law, or Article 10 paragraph 1 of the Insurance Business Law correspondingly applicable under Article 16 or Article 19; (14) When, in contravention of the provision of Article 101 paragraph 2 of the Insurance Business Law correspondingly applicable under Article 23 paragraph 3, he refused without just cause, to become an insurance administrator; (15) When he has failed to hand over the business to an insurance administrator appointed by the Minister of Finance provided for in Article 101 paragraph 1 of the Insurance Business Law correspondingly applicable under the Article 23 paragraph 3; (16) When, in contravention of the provisions of Article 111 paragraph 2, Article 112 paragraphs 1 to 3 inclusive, Article 113, Article 115 or Article 116 of the Insurance Business Law which are correspondingly applicable under Article 21 paragraph 2, he has proceeded to transfer its insurance contracts or disposed of its insurance contracts and assets or assumed an obligation; (17) When he has transacted the business in contravention of the provisions of Article 103 of the Insurance Business Law correspondingly applicable under Article 23 paragraph 3; (18) When he has violated the provisions of Article 127 of the Insurance Business Law correspondingly applicable under Article 19; (19) When he has violated the provisions of Articles 421 to 424 inclusive and Articles 430 to 456 inclusive of the Commercial Code, correspondingly applicable under Article 485 paragraph 2 of the same Code, correspondingly applicable under Article 29.