Chairman's Statement (Translation)
released on December 21, 2006（Jan. 24, 2007）
Since last year, a number of our member companies have discovered inadvertent non-payment of claims to policyholders and other claimants. The areas of non-payment were found primarily in additional coverage. As the member companies re-examined such cases, additional cases of non-payment of claims were found. In addition, companies found inappropriate non-payments of claims in 3rd sector insurance such as medical expense insurance. We would like to express our deep regret for this situation.
To regain consumers' and society's confidence, the GIAJ recognizes that it is most important for the GIAJ to revisit the fundamentals of the industry. We are determined to listen to consumers' voices carefully and then respond to them quickly and effectively. We requested that our member insurers proactively establish a mechanism to solve such problems by themselves. We have been taking various actions to promote compliance by enforcing appropriate business conduct and by exercising remedial measures based on principles of self-responsibility. We will continue to make further efforts to regain confidence in a diligent manner.
At the Board Meeting of the GIAJ, held on December 21, the Board resolved to implement a self re-examination of fire insurance and other contracts in order to confirm that the contracts were properly underwritten. Each insurance company is required to check that contracts were properly undertaken with a proper insured amount, scope of coverage, application of discount program, etc. At the same time, each insurance company will strengthen and improve its business process in solicitation and underwriting.
2. Measures and actions
(1) Review industry operation with consistent focus on consumers' voices and opinions.
i. Holding an "Advisory Panel to Listen to Consumers' Voices"
We have established the "Advisory Panel to Listen to Consumers' Voices" in September 2006 to incorporate consumers' opinions into our business operation. This panel has met three times and experts from academia and consumer issues have presented various opinions and suggestions.
At the first Panel meeting, the members discussed a "Guideline for General Insurance Claims Payment" and a "General Insurance Buyers' Guide".
At the second meeting, the members discussed "solicitation tools" and a "Policyholders' Guide for Filing Claims with General Insurers." Regarding solicitation tools, the Panel recommended setting out a guideline which illustrates the principles for preparing solicitation tools such as brochures and advertisements for insurance products.
The Panel also discussed an enhancement of agents' / solicitors' quality of service, and recommended that the Association should discuss specific measures of raising the quality of agents' / solicitor's services at the third meeting. Bearing the suggestions in mind, the GIAJ has just started to review a concrete plan developed by our related committee within the GIAJ.
The Panel will continue to meet frequently and discuss issues in the industry from broader view.
ii. Analysis, assessment and feedback of consumer's opinions
We have restructured the "General Insurance Counseling Office" in the GIAJ as an independent organization, reporting directly to a managing director of the Association and strengthened its function of collection and analysis of consumers' opinions. We revised the "Business Report of the General Insurance Counseling Office" as the "Report on Consumers' Voices". The revised report provides the members with a more precise analysis of consumers' voices, which is useful to the management of member companies. This report is published every quarter; the reports for the 1st and 2nd quarters have already been published and are open to the public.
iii. Listening to consumers' voices more proactively
In order to listen to consumers' viewpoints more closely, we have enlarged our General Insurance Counseling Office by increasing the number of counselors and by adding toll-free telephone lines. At the same time, we have held discussion meetings with representatives of consumer groups and local administrators of consumer policies in four regions in the nation. The GIAJ continues to listen proactively to consumers' voices.
iv. Making guidelines for display of solicitation materials
In response to the proposal given at the second Advisory Panel meeting, we set out a "Guideline on description of solicitation materials, etc." with the purpose of setting down basic rules for solicitation tools and advertisements through the media, and we have released it today.
This guideline summarizes the principles and important points in publishing solicitation tools and advertisements to assist consumers' understanding of general insurance products. Referring to this guideline, each member company will improve its supply of information on its products.
(2) Reinforcing Compliance
i. Strengthening the functions of the Compliance Committee
In September, as part of our plans to strengthen compliance functions, the GIAJ reorganized its Compliance Committee from a special committee into a standing committee that consists of directors from all member companies and a sub-committee. This committee has supported compliance activities of the member companies by sharing good practices among members and holding seminars inviting experts from academia and on consumer issues.
ii. Other compliance reinforcement measures
In addition to the restructuring of the Compliance Committee, we are discussing making a "Compliance Guide for Solicitation" (tentative title), which makes clear the critical points in making insurance contracts which are compatible with the need for compliance. We reported this plan to the Advisory Panel members in the last meeting and requested their comments on it. We continue to discuss it considering the opinions submitted by the Panel members.
iii. Outlining a "Self-Imposed Guideline on Payment for Insurance Claims"
While the prompt and proper payment of claims shall be processed by each company based on the principle of self-responsibility, in order to establish a better claims payment management system, the GIAJ outlined the "Self-Imposed Guideline on Payment of Insurance Claims". Insurance companies need to be aware of the check-points in this guideline in the wake of inadvertent non-payment of claims for additional coverage. This guideline has already been shared with the members and is available on our web site (available in Japanese).
The GIAJ shall discuss developing a "Claims Payment Guideline for 3rd Sector Insurance Products", which covers ways to handle notification by insured, payment of claims, etc., in response to the inappropriate non-payment cases in 3rd sector insurance.
i. Promotion publicity of the General Insurance Buyers' Guide
We have held seminars for consumers and consumer-advisors in 43 regions around the nation so that consumers can obtain a better understanding of general insurance by using the "General Insurance Buyers' Guide", which explains general insurance in plain language.
Reflecting opinions from consumers and Panel members, we revised the Guide by adding illustrations to help consumers' understanding of general insurance.
Furthermore, we have compiled and published the "Policyholders' Guide for Filing Claims with General Insurers".
ii. Other implementations
Besides regaining consumers' confidence, we have carried out the following activities:
a. Tax Reform Requests
On December 14, 2006, the ruling party announced the General Principle on Tax Reform for 2007. Among our priority issues are the "Strengthening of catastrophe reserves on fire insurance and others" be adopted and that the present non-taxable rate (4%) is to be extended another three years. In addition, "Creation of new premium tax deduction systems to respond to social needs" was written into the General Principle as a matter for ongoing discussion.
b. Theft Prevention Activities
With respect to automobile theft, which is a significant social issue, the number of cases is on a decrease on a year-over-year basis because of efforts made by both the government and the private sector. Nevertheless, we continue to grapple with the problem as a member of the Joint Automobile Theft Prevention Project Team because the number of automobile thefts is still high in our opinion.
In addition to the above, the GIAJ held a campaign for "Theft Prevention Day" in 66 regions around the nation on October 6, 2006 to raise people's awareness of theft prevention.
c. Drunken Driving Elimination Activities
In response to accidents caused by drunken driving, which is another significant social problem, the GIAJ launched a campaign for the elimination of drunken driving by publishing the "Manual for elimination of drunken driving" last year. This year again, we launched a campaign by publishing a booklet entitled "Appointment of designated drivers" which intends to create circumstances where people do not let the designated drivers drink on an occasion of a group meal or a party. The "Manual for elimination of drunken driving" was well accepted among the public and 480,000 copies have been distributed as of December 15.
Four months have passed since I became the chairman of the GIAJ, and 2006 is about to close. Although we have taken every possible action to restore consumers' confidence, we also understand that our efforts have just started.
As mentioned above, we outlined a "Guideline for General Insurance Claims Payment" with respect to key points on claim payments, and a "Guideline for Displaying Solicitation Documents, etc." providing basic rules on publishing solicitation tools such as brochures and advertisements for insurance products. Furthermore, it is essential that each member company reviews its business process and implements better internal rules and processes with reference to these guidelines. We, as an industry organization, are going to discuss specific ways to support member companies in this respect.
I stated the following two priority points at my inaugural address: - "Paying respect and listening carefully to consumers' voices and then responding to them quickly and effectively"
- "Creation of a system in which each member company sorts out and addresses their issues by themselves and solves them proactively". We continue to make every possible effort to address these issues.