GIAJ Chairman's Statement released on March 18, 2010（March 24, 2010）
2. Enforcement of the Insurance Contract Law
From April 1 this year, the "Insurance Contract Law", which has been revised for the first time in about 110 years, is slated to be enforced in Japan.
This drastic revision has been made mainly from the viewpoints of consumer protection, as well as modernization of legal provisions such as the establishment of provisions on accident and sickness insurance contracts, and adoption of a colloquial style of writing using easy-to-understand expressions.
For example, the "semi-mandatory provisions" have been introduced in the new Insurance Contract Law, where any policy terms would be invalid if such terms work against the provisions set out in the Law in favor of policyholders, the insured, or beneficiaries. In addition, the new Insurance Contract Law has clarified the rules on duty of disclosure at the time of the contract signing, where the policyholder no longer needs to disclose all matters concerning his/her risks voluntarily but only needs to disclose such matters which the insurance company asks him/her to disclose. Furthermore, the Insurance Contract Law has newly adopted the provisions on the "specific period of time to make claims payments", where insurance companies are required to specify a reasonable period for claims payments in their policy terms.
Each general insurance company has been making efforts to revise their policy terms and review their business procedures in light of the enforcement of the new Insurance Contract Law, and they are expected to complete such preparations by the end of this month.
We, the GIAJ, have supported our member companies in responding to the new Insurance Contract Law by revising industry guidelines for underwriting and claims payments. We have also strived to obtain a better understanding of the new Insurance Contract Law through the revision of information tools for consumers such as the "General Insurance Buyers' Guide" as well as relevant information uploaded on the GIAJ's website.
3. Review of Examination System for General Insurance Solicitors
In the mid-term fundamental business plan of the GIAJ, we focus on the improvement in the quality of business processes. Especially, our important issues have been to "restructure an examination and education system common to the industry" and to "establish a system for general insurance solicitors to move up".
We, the GIAJ, have been deliberating on the review of the education and examination system for general insurance solicitors based on the recommendation from the "Advisory Panel to Listen to Consumers' Voices" last June, and as a result, we have been determined to newly launch a "general examination for general insurance solicitors" from October 2011.
Currently, the GIAJ implements a "qualification renewal system" and an "insurance product learning system" as an education and examination system for general insurance solicitors. A new examination system will unify the two kinds of systems mentioned above, and become common to all member companies, subject to renewal every five years.
All general insurance solicitors are required to take the new examination and be qualified by the GIAJ, so that they can equip themselves with expertise on insurance products and provide customers with information on insurance products in an easy-to-understand manner in response to their needs.
We are also now deliberating on the establishment of a system for general insurance solicitors who have passed the "general examination for general insurance solicitors" to move up, where such successful solicitors can be approved by the GIAJ if they are equipped with a wider range of expertise and experience.
We would also like to increase the number of general insurance solicitors who can conduct high-quality insurance soliciting for customers, thus enhancing the quality of the insurance soliciting business on an industry-wide basis.
4. Further Enhancement of Communications with Consumers
(1) Strengthening of the GIAJ's capacity to resolve consumer consultations and complaints
The GIAJ is planning to revise the database of consultations and complaints received by the GIAJ this April, and connect it on-line with each member company in stages.
This new database facilitates the divisions in charge at the headquarters of the GIAJ and its member companies to share information on complaints received in a timely manner, so as to ensure a more collaborative response to such complaints.
We will ask our member companies to resolve the complaints through this on-line connection. Thus, we aim to respond to complaints received at an early stage by ensuring more expeditious and appropriate response than ever.
In relation to this, the GIAJ newly set up an "ADR Promotion Office" on March 1 this year, and we are now making preparations to obtain approval as a designated ADR organization under the Insurance Business Law.
(2) Advisory Panel to Listen to Consumers' Voices
On March 3 this year, the 15th session of the "Advisory Panel to Listen to Consumers' Voices" was held to follow up on the GIAJ's various initiatives such as the establishment of a "website page for comparative information on automobile insurance products" last November, and the introduction of a new examination system for general insurance solicitors mentioned above.
We had a lot of comments and views from the panel members including "Further review on effective public relations measures may be helpful in order to increase the use of the above-mentioned website" and "As for the evaluation of the capability of approved general insurance solicitors, the GIAJ should examine not only insurance expertise but also advanced insurance explanation skills".
We, the GIAJ, will continue to conduct and improve our various initiatives, taking into account the panel's views and recommendations.
(1) Promotion of the use of recycled automobile parts
As part of measures to address environmental issues, the GIAJ has been promoting an initiative to utilize recycled automobile parts.
This initiative aims at contributing to a zero-waste economy and society and low-carbon society by making use of "recycled automobile parts" taken from used automobiles for automobile repairs.
From the viewpoint of accelerating this initiative, we launched an exclusive page for the promotion of the use of recycled automobile parts on the GIAJ's website on March 17 this year. On this website page, a simulation is available where people can see the effects of the use of recycled automobile parts for the mitigation of our environmental burden, such as emissions cuts to be achieved by the use of recycled automobile parts.
(2) Initiatives utilizing investment income from accumulated CALI funds
At the meeting of the Board of Directors held on February 18 this year, the GIAJ decided the details of its initiatives utilizing investment income from accumulated CALI (Compulsory Automobile Liability Insurance) funds for fiscal 2010.
In light of the opinions from the Committee concerning Utilization of CALI Investment Income, the advisory body to Chairman of the GIAJ, as well as the CALI Council, the GIAJ plans to utilize the investment income for a total of 37 activities for fiscal 2010, to support legal counseling on traffic accidents and deployment of medical doctor helicopters.
(3) CALI pubic relations campaign for fiscal 2009
The GIAJ is now conducting the "CALI Public Relations Campaign" during the period of March 1 through 31 this year, with Ms. Kana Kurashina, a popular actress, as a spokesperson for the campaign.
Through newspaper advertisements and other advertising media, we are now addressing the public that CALI contributes to the relief of victims of traffic accidents, the number of which is now 2,000 per day, and that all automobiles and motorbikes should be insured by CALI.
(4) International Exchange
Following the Cooperation Memorandum with the Association of Vietnamese Insurers concluded last September, the GIAJ signed a Cooperation Memorandum with the General Insurance Association of Indonesia on January 14 this year, and we would like to take this opportunity to promote an exchange of views and information and personnel exchanges, thus deepening mutual understanding and cooperative relationships.
(5) Review of solvency regulations
Last December, a Cabinet Ordinance to partially revise the Enforcement Regulation of the Insurance Business Law was published, which included a review of risk factors of solvency margin ratios. On March 9 this year, a bill to partially revise the Financial Instruments and Exchange Law was submitted to the ordinary session of the Diet, and this bill included the introduction of regulations on consolidated financial statements of insurance companies.
Taking into account the financial crisis of the year before last, we acknowledge that the improved and strengthened regulation to supervise insurance companies is beneficial for the sound development of the general insurance industry. However, we think that such regulation should be beneficial and rational for policyholders, too.
As for the review of solvency regulations, we intend to keep our eyes closely on its progress including international trends, and express our views representing the Japanese general insurance industry as the necessity arises.
Risks surrounding society change with the times. In addition, people's needs for general insurance are also increasingly diversified following the changes in lifestyles such as a low birthrate and an aging population and the increase in the number of single-person households.
Under the circumstances, in order to obtain consumers' better understanding of general insurance and raise their satisfaction level, I think it quite important to continue to work on our priority issues such as enhancement of communication with consumers, improvement in the quality of business processes, and response to environmental issues.
As my tenure of office as Chairman of the GIAJ will expire in about three months, I will make my best efforts to ensure that the general insurance industry will make sustainable development together with society in response to the expectations of consumers.