As a former insurance agent, I will explain some common misconceptions surrounding NISA.

Insurance Agent Duties and Needs Analysis in Accordance with Japanese Financial Services Agency Regulations

Insurance Agent Responsibilities Under Japanese Law

Insurance agents serve as intermediaries between insurance companies and policyholders, handling premium collection and providing essential product information in accordance with the Insurance Business Act (保険業法). Insurance agents do not bear responsibility for claim payments—this responsibility lies solely with licensed insurance companies as stipulated under Article 3 of the Insurance Business Act.

When recommending insurance products, agents must recognize that policyholders may not fully comprehend complex policy terms and conditions. Under Article 300 of the Insurance Business Act and related Financial Services Agency (FSA) supervisory guidelines, insurance agents have a legal obligation to provide clear, accurate explanations of insurance products.

Duty of Explanation (説明義務)

In compliance with FSA regulations, insurance agents must:

• Provide comprehensive explanations of policy terms, coverage, exclusions, and premium calculations
• Ensure policyholders understand cancellation procedures, surrender values, and associated fees
• Use clear, understandable language appropriate to the customer's level of financial literacy
• Document that proper explanations have been provided

When policy cancellations occur, agents must clearly explain surrender value calculations and applicable fees as required under the Insurance Business Act. Failure to provide adequate explanations may result in regulatory sanctions under FSA supervisory guidelines.

Needs Analysis in Compliance with Japanese Financial Regulations

Definition and Legal Framework

Needs Analysis, commonly referred to as "Needs Analysis" in Japanese insurance practice, is a customer assessment methodology mandated under FSA guidelines for insurance solicitation. This approach ensures compliance with the suitability principle (適合性の原則) established in Japanese financial services law.

Regulatory-Compliant Features of Needs Analysis

Customer Suitability Assessment (適合性確認) In accordance with Article 294-2 of the Insurance Business Act, agents must assess customer needs and recommend only suitable products. Needs Analysis provides individualized recommendations based on comprehensive customer assessment, ensuring compliance with suitability requirements.

Comprehensive Risk Assessment (包括的リスク評価) Following FSA supervisory guidelines, agents must thoroughly analyze customers' current financial situations, future objectives, and risk tolerance levels. This analysis forms the basis for appropriate product recommendations as required under the duty of care provisions.

Customer-First Principle (顧客本位の業務運営) In line with the FSA's "Principles for Customer-Oriented Business Conduct," Needs Analysis prioritizes customer interests above sales targets, ensuring recommendations align with customer needs rather than commission structures.

Life Stage Responsiveness (ライフステージ対応) Agents must adjust recommendations based on changing customer circumstances, as required under ongoing suitability assessment obligations. This includes regular policy reviews following major life events.

Regulatory-Compliant Implementation Process

Information Gathering and Documentation (情報収集・記録保持) Under Article 300-2 of the Insurance Business Act, agents must:

• Collect and document customer financial information, family composition, and insurance objectives
• Maintain records of customer interactions for regulatory inspection purposes
• Ensure data protection compliance under applicable privacy laws

Analysis and Suitability Determination (分析・適合性判定) Agents must:

• Evaluate customer information against product characteristics
• Document the rationale for product recommendations
• Ensure recommendations meet regulatory suitability standards

Disclosure and Explanation Obligations (開示・説明義務) In compliance with mandatory disclosure requirements:

• Provide detailed product explanations including risks, costs, and benefits
• Deliver standardized disclosure documents as required by FSA regulations
• Obtain customer acknowledgment of understanding

Customization Within Regulatory Parameters (規制範囲内でのカスタマイゼーション) Product modifications must:

• Comply with insurance company approval processes
• Meet regulatory requirements for policy variations
• Be properly documented and disclosed

Ongoing Monitoring and Support (継続的モニタリング・サポート) Under continuing suitability obligations:

• Conduct regular policy reviews as required by company procedures
• Adjust recommendations based on changing customer circumstances
• Maintain ongoing documentation of customer relationships

Regulatory Drivers for Needs Analysis Implementation

Enhanced Consumer Protection Requirements Recent FSA initiatives emphasizing consumer protection have increased demand for systematic needs assessment approaches. The "Principles for Customer-Oriented Business Conduct" specifically require financial institutions to prioritize customer interests.

Risk Management and Compliance Proper needs analysis helps ensure compliance with suitability requirements, reducing regulatory risk for both agents and insurance companies. This approach supports the FSA's emphasis on appropriate product sales.

Regulatory Adaptation As FSA supervisory guidelines continue to evolve, needs analysis provides a framework for adapting to new regulatory requirements while maintaining customer service standards.

Market Conduct Standards With increased FSA focus on market conduct supervision, systematic needs analysis demonstrates commitment to proper sales practices and regulatory compliance.

Customer Protection and Trust The customer-first approach mandated by FSA regulations aligns with needs analysis methodology, supporting long-term customer relationships while meeting regulatory expectations.

Compliance Conclusion

Needs analysis, when properly implemented in accordance with Japanese financial regulations, serves as an essential tool for insurance agents to meet their legal obligations under the Insurance Business Act and FSA supervisory guidelines. This methodology supports both regulatory compliance and customer service excellence in Japan's regulated insurance market.

---

This document reflects regulations current as of January 2025. Insurance agents should consult current FSA guidance and legal counsel for the most up-to-date regulatory requirements.