Chairman's Statement (Translation)
released on September 1, 2006
(Oct. 6, 2006

"For the restoration of consumer confidence"
with consistent and intensified focus on consumers' views and voice

Tokyo, September 1, 2006 - The General Insurance Association of Japan (GIAJ) announced that Mr. Kunio Ishihara, President of Tokio Marine & Nichido Fire Insurance Co. Ltd., was appointed the Chairman of the GIAJ at its Extraordinary General Meeting on September 1, 2006. The following is his inaugural address.
Mr. Kunio Ishihara, Chairman
Mr. Kunio Ishihara, Chairman

1. Introduction

General insurance covers all kinds of risks in society and pays for claims duly and properly once an accident happens, thus contributing to social stability and economic growth. It follows from this that the industry has a highly public nature.

I am confident that the general insurance industry has been contributing to society by fulfilling such functions. Nevertheless, it is unfortunate to see the issue of inadvertent non-payment of claims which were found primarily in additional coverages. The issue initially drew public attention last year, and the industry has been working diligently to cope with it ever since.

I believe that consumers' confidence in insurance companies is most important as general insurance products are invisible and provide policyholders with security and safety by paying claims in case accidents should happen. Sustaining rightful business conduct is considered the foundation of confidence, which should help the industry keep playing a social role. With the implementation of reinforced standard on applying adequate business conduct on every daily business process, we intend to carry out the following actions to assist our member companies in regaining the consumers' confidence sooner than later.

2. Basic vision and action plan as the Chairman

To regain consumers' and society's confidence, I believe that it is the most important for our industry to revisit the fundamental of our industry where we are expected to "pay respect and listen carefully to consumers' voice and then respond to them quickly and effectively".

It is also essential to design a system in which each member company sorts out and addresses their issues by themselves and solves them pro-actively. In other words, it is essential for each company to enforce rightful business conduct by exercising their remedial measures based on principles of self-responsibility.

Our top priority is to regain consumers' confidence. The GIAJ will actively lead and support the whole industry "through reviewing business process with constant focus on consumers' voice" and "strengthening the efforts towards achieving high level of business conduct". To this end, I am committed to exercising strong leadership as the Chairman of the GIAJ.

3. Measures and actions

Based on the resolution of the Extraordinary Board Meeting and General Meeting of Members, both held on June 30, 2006, we will carry out the following actions:

Review the industry operation with consistent focus on consumers' voice and opinion.

i. Establishment of the "Advisory Panel to Listen to Consumers' Voice", with third party experts maintaining the plurality

We have newly established the "Advisory Panel to Listen to Consumers' Voice" to incorporate consumers' opinions into the industry operation.

Majority of the Panel consists of representatives from consumers and academic experts. The Panel stands independent from the GIAJ's existing organs such as committees and sub-committees.

Specifically, the Panel is expected to offer proposals to the Board Meeting following discussions on specific industry-wide issues based on consumers' suggestions and complaints which flow in through various sources. The Board Meeting holds discussion on measures to respond to the proposals from the Panel, and reports back to the Panel on a regular basis. The Panel may make further proposals to the Board Meeting based on review on the GIAJ's implementation of such measures and the latest consumers opinions.

We will aim at establishing a cycle of "proposals" - "response" - "report", which may give rise to another set of "proposals", originating from "consumers' voice".

ii. Establishment of a system to aggregate, analyze and assess consumers' opinions

In order to make the Panel's discussions and suggestions genuinely focused on consumers' voice, we will aggregate and evaluate various inquiries and complaints which the GIAJ has received from consumers as well as opinions given regularly by consumer-advisors and consumer-group representatives all over the nation.

To this end, we have set up a secretarial office of the "Advisory Panel to Listen to Consumers' Voice".

iii. Establishment of a system to listen to consumers' opinions more proactively

We will increase the number of staff members and the scope of activities of the "General Insurance Counseling Office" in the GIAJ, to facilitate consumers in their filing inquiries or complaints.

In addition to receiving consumers' inquiries or complaints at the counseling office, we will proactively collect consumers' opinions with due regard to the discussion by the Advisory Panel, and carry out the resolution accordingly.

(2) Reinforcing the business conduct

i. Strengthening the functions of the Compliance Committee

In order to strengthen the functions of the Compliance Committee which have mainly played the role of checking the fairness in the operations of the GIAJ as a whole, the Compliance Committee has been restructured from a special committee, which consists of representatives from the committees and sub-committees of the GIAJ, into a standing committee, which consists of directors from all member companies responsible for various compliance issues.

The key initiative of this renewed Compliance Committee is to assist each member company's efforts towards upgrading compliance standards by sharing best practices among the industry, and by importing effective measures taken by other industries'.

These measures, to be carried out by the GIAJ, will also be reported to the "Advisory Panel to Listen to Consumers' Voice" on a regular basis.

ii. Outlining the Self-Imposed Guideline on Payment for Insurance Claims

Payment for insurance claims is the most essential function of insurance companies. We will outline the "Self-Imposed Guideline on Payment for Insurance Claims" which is expected to cover specific check-points which insurance companies should adhere to, while prompt and proper payment for insurance claims should be realized in each company's process following the principle of self-responsibility. This is to establish a more appropriate claims payment management system, in the wake of inadvertent non-payment of additional coverages which have been observed since last year.

(3) Others

i. Promoting publicity of the General Insurance Buyers' Guide

From the viewpoint of providing consumers with information on general insurance in a more plain language, we published a "General Insurance Buyers' Guide" this January, to assist consumers' understanding coverages under general insurance policies. To make it more accessible to consumers, we will actively hold seminars for consumer-advisers throughout the nation.

Besides the above, we will review the Guide as necessity arises in order to make it easier for consumers to understand its contents.

ii. Publishing the Policyholders' Guide for Filing Claims with General Insurers

Furthermore, we are compiling the "Policyholders' Guide for Filing Claims with General Insurers" so that policyholders can use it when they file claims with general insurers. We will publish the Guide as soon as it comes to completion.

4. Closing

I have expressed my policy as the Chairman of the GIAJ regarding the pressing issue of regaining the consumers' confidence in our industry.

Aside from the key initiatives illustrated above, the GIAJ's activities throughout the year will continue to cover automobile theft prevention, requesting for tax reform and further deregulation, to name a few. We will strive to address these important agenda at the same time.