Sompo Japan President Shirakawa Giichi will step down to take responsibility for the insurance giant's links with a used car dealership that's been accused of fraud.

Sompo Japan and its parent company Sompo Holdings made the announcement at a news conference on Friday.

"I deeply regret that our company has significantly undermined trust in its non-life insurance business from customers and society," said Shirakawa.

Bigmotor was a Sompo client that allegedly inflated customer bills by damaging cars brought in for repair. Sompo had worked with the dealer as one of its biggest sellers of auto insurance and later cut ties after the scandal emerged.

The Financial Services Agency has been investigating how Shirakawa responded to the Bigmotor scandal.

The executive has said he sought to resume a partnership with Bigmotor even after learning about the possible fraud.