The CEO of one of Japan's major non-life insurance groups will step down at the end of March.

His decision comes after the country's financial watchdog issued business-improvement orders to two group companies, Sompo Japan and its parent, Sompo Holdings.

Both firms are implicated in fraudulent claims by used-car dealer Bigmotor.

Sompo Holdings' Group CEO Sakurada Kengo says, "We should have realized that our insurance business was built on public trust. We were just too busy thinking about our insurance agents and did not care very much about our customers. We simply had no ability to prevent this."

Sakurada also pointed to internal risk-control problems, and that the system was simply not working.

He blamed the parent company for failing to provide its subsidiary with guidance and proper management.

Sakurada has led Sompo Holdings Group for over a decade. He will also step down from the chairman's position.

He had served as chairman of Japan Association of Corporate Executives for four years to April last year.

Sompo Japan President Shirakawa Giichi will step down at the end of this month.

Bigmotor was a Sompo client. The car dealer allegedly inflated customer bills by damaging cars brought in for repair.

The allegations had prompted some insurers to cut ties with Bigmotor.

But Sompo Japan resumed business with the chain, even though management was apparently aware of the systemic fraudulent practices.