As financial institutions are consolidated increasingly and services provided by them became more diverse, there is a growing risk of conflicts of interest arising due to the existence of numerous opposing and competing interests within these financial institutions and financial groups. The Company has established the “MS&AD Insurance Group Basic Policy for Management of Conflicts of Interest” to manage conflict of interest transactions and conduct operations appropriately in order to avoid any unfair disadvantages to customers.
Based on this policy, the Company and the Company's domestic insurance subsidiaries will establish corporate systems and take other appropriate steps, including the formulation of internal regulations and rules regarding the management of conflicts of interest and the establishment of departments to oversee management of such conflicts.
MS&AD Insurance Group Basic Policy for Management of Conflicts of Interest
The Company and its subsidiary domestic insurance companies (hereinafter referred to as the “domestic Group insurance companies”) shall manage transactions conducted by financial institutions of the MS&AD Insurance Group (hereinafter referred to as the “Group financial institutions”) that may pose a conflict of interest and conduct business properly based on the following policies to avoid any unfair disadvantage to customers.
(1) Subject Transactions
As used herein, “transaction with a potential conflict of interest” (hereinafter referred to as a “subject transaction”) shall refer to a transaction conducted by a Group financial institution that has the potential to be unfairly disadvantageous to customers.
(2) Types of Subject Transactions
The Company and domestic Group insurance companies shall manage subject transactions based on their type as follows:
(i) Transactions where the best interests of customers are in potential conflict with the best interests of Group financial institutions.
(ii) Transactions where the best interests of customers are in potential conflict with the best interests of other customers of Group financial institutions.
The domestic Group insurance companies shall choose either the following methods or other methods, or a combination thereof, for the proper management of subject transactions:
(i) A method entailing the separation of the business unit conducting the subject transaction from another business unit conducting transactions for customers that might be affected by the subject transaction.
(ii) A method that involves making appropriate disclosure to customers regarding the potential the subject transaction might have in causing unfair disadvantage to the customers.
(iii) A method providing for a change of conditions or methodology of the subject transaction or other transactions with customers that might be affected by the subject transaction.
(iv) A method that involves discontinuing the subject transaction or other transactions with customers that might be affected by the subject transaction.
To conduct management of conflicts of interest, the company and domestic Group insurance companies shall establish a department or specific person to be responsible for overall management thereof. Subject transactions shall be managed in a uniform manner by means of compiling information pertaining to conflicts of interest. Necessary education and training shall also be provided to officers and employees so that management is conducted properly, and effort shall be made to prevent customers from experiencing any unfair disadvantages.
The companies subject to management of conflicts of interest at the Company shall be the following financial institutions of the MS&AD Insurance Group:
(i) Domestic Group insurance companies.
(ii) Subsidiary financial institutions of the Company, etc.
This shall refer to Group companies of the MS&AD Insurance Group that engage in insurance or other financial business other than the domestic Group insurance companies.