GIAJ Chairman's Statement released on June 17, 2010(June 18, 2010

I would like to report on our major initiatives during my tenure of office as Chairman of the GIAJ since June 30, 2009, and express my views thereof as follows:

1. Introduction

Today, our country faces various challenging issues such as a new growth strategy, financial reconstruction, and a more secure social security system. Since I took office as Chairman of the GIAJ last June, the environment surrounding the general insurance industry has significantly changed as characterized by the inauguration of the government led by the Democratic Party of Japan, the establishment of the Consumer Affairs Agency, and the revision of the Insurance Contract Law.

Above all, the Insurance Contract Law has been drastically revised for the first time in 110 years from the viewpoints of modernization of legal provisions related to insurance contracts and the adoption of a colloquial style of writing using easy-to-understand expressions as well as consumer protection. I believe that this revision reflects the current social situation which puts emphasis more on consumers' secure and safe lives.

Mr. Masatoshi Sato, Chairman

Taking into account these environmental changes, I have worked on the three priority issues over the past year, which I set as a target at my inauguration as Chairman of the GIAJ last June, i.e. "enhancement of communication with consumers", "improvement in the quality of business processes", and "response to environmental issues". In response to the enforcement of the Insurance Contract Law, each general insurance company has revised their policy wordings as well as their business procedures. At the same time, the GIAJ has made efforts to promote a better understanding of new insurance products which meet the spirit of the new Insurance Contract Law through the revision of industry guidelines, the GIAJ's website, and information tools for consumers.

I would like to report on the GIAJ's specific measures and actions over the entire year as follows, focusing on the three priority issues:

2. Specific Measures and Actions for the Year

(1)Enhancement of Communication with Consumers

- Establishment of an infrastructure to strengthen the GIAJ's capacity to respond to complaints and disputes -

A. Revision of the database of complaints and consultations
In order for us to respond to consumer complaints and consultations in a more appropriate and prompt way, we revised the GIAJ's database of complaints and consultations, whereby it has become possible for the divisions in charge at the headquarters of the GIAJ and its member companies to share information on the complaints received by the GIAJ in a timely manner since this May.

The GIAJ is now planning to connect the GIAJ's database on-line with each member company in stages, thus aiming at ensuring a more expeditious response to complaints received by the GIAJ than ever.

B. Designation as a financial ADR (Alternative Dispute Resolution) organization
Last September, the GIAJ resolved that it would apply to obtain authorization as a "designated ADR organization" under the Insurance Business Law. We have since conducted serious consideration of practical aspects for such a designation by establishing an ADR Promotion Office within the GIAJ, and have made the necessary preparations such as deliberation on an organizational structure as a designated ADR organization as well as its rules and regulations.

We will start our business as a designated ADR organization this coming October subject to the authorization of the Financial Services Agency (FSA).

Thereby, we intend to further strengthen the GIAJ's capacity to resolve complaints and disputes related to general insurance, and to ensure neutrality and fairness in such resolution process more than ever.

C. Advisory Panel to Listen to Consumers' Voices
On May 11 this year, the 16th session of the "Advisory Panel to Listen to Consumers' Voices" was held to follow up on the GIAJ's various initiatives based on their recommendation, and active discussion took place regarding how to promote consumers' understanding of risks and general insurance.

We held a total of three sessions of the panel over the past year, and we have strived to put the recommendations and opinions received at the panel in force, such as provision of comparative information on automobile insurance and determination to launch a general examination for general insurance solicitors.

D. Provision of comparative information on automobile insurance
Last November, we established a "webpage for comparative information on automobile insurance products" in order to provide consumers with information which will contribute to their right choice of products and assist their decisions by themselves.

On this webpage, consumers are able to choose and compare specific items of each member company's products such as scope of coverage, main endorsements, and discount terms, and this webpage also refers to important points in choosing automobile insurance products.

E. Public relations and consumer education activities
We, the GIAJ, send general insurance lecturers to meetings for high school and university students as well as for the public, and also to a study meeting for consumer consultants. Over the past year, we have sent general insurance lecturers to a total of 367 meetings, where a total of around 37,000 people participated. In addition, we have also held a "General Insurance Public Seminar" in 10 districts throughout the country.

Furthermore, we have conducted public relations activities making the most of radio so as to provide the wider public with information on general insurance.

"Sonpo no Honto", the GIAJ's webpage for consumers designed for their better understanding of risk and insurance, won an award for excellence by the National Institute on Consumer Education at the 7th session of its consumer educational materials contest held in March this year.

(2) Improvement in the quality of business processes

- Establishment of an infrastructure to improve the quality of insurance soliciting activities in which general insurance solicitors contact their customers directly, such as revision of an examination system for general insurance solicitors and creation of their approval system -

A. Restructuring of an examination and education system common to the general insurance industry
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.

B. Establishment of a system for general insurance solicitors to move up
We have established a new 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 plan to implement this system during the second half of 2011.

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.

C. Strengthening of education for general insurance solicitors
Each member company has been making efforts to give their solicitors education and training by promoting e-learning and DVD-based training so that they can obtain expertise and prepare for examinations.

(3) Response to environmental issues 

- Promotion of efforts to reduce the environmental load and dissemination of information and a message for environmental protection -

A. Participation in the Nippon Keidanren's Commitment to a Low Carbon Society
We, the GIAJ, have been working on environmental issues so that we can reduce electricity use at our headquarters by 18% on average during the period between 2008 and 2012, compared to that in 2000, which is an industry target for measures against global warming. Moreover, on April 15 this year, we, the general insurance industry, were determined to participate in the "Nippon Keidanren's Commitment to a Low Carbon Society" which will be put in force in 2013.

B. Eco and Safe Driving Club and the promotion of the use of recycled automobile parts
Last July, we launched an exclusive page for the "Eco and Safe Driving Club" on the GIAJ website, and registered members are expected to implement the "Five Principles of Eco and Safe Driving" and urge their colleagues to drive their cars based on these principles in order to make this initiative popular and increase the number of followers. In addition, there are cases where each GIAJ member company promotes their own eco and safe driving programs in the wake of the GIAJ's initiative.

In March this year, we also established a webpage on the GIAJ's website, where club members can check simulation of CO2 emission reduction by promoting the use of recycled automobile parts.

C. Lecture meeting on environmental issues
On November 6 last year, we held the 50th anniversary session of a "lecture meeting on environmental issues". The session featured a keynote lecture under the theme of the "current situation of global environmental problems and how to address them", where we also provided participants with information on our specific measures on environmental issues and sent a message on environmental protection.

D. "Window of Environment"
We have launched a "Window of Environment", an exclusive webpage for environmental issues on the GIAJ's website, where we uploaded information on the GIAJ's various initiatives for environmental protection as well as information on seminars, lecture meetings, or events related environmental issues to be held by each member company.

(4) Others

A. Requests for Tax Reform
While we have recently seen a large-scale natural disasters occur, a catastrophe reserve system for fire insurance and others is essential in order to ensure the stability of people's lives and management of general insurance companies in cases where a huge natural disaster occurs.

As to the GIAJ's request for fiscal 2010 tax reform, we have requested that the relevant authorities maintain the current 4% of non-taxable accumulation rate of catastrophe reserves for fire insurance and others. As a result, our request was reflected in the government's large package of tax revisions last December with certain conditions.

B. Requests for regulations on consolidated financial statements
On May 12 this year, a bill to partially revise the Financial Instruments and Exchange Law passed in the Diet, and provisions have been stipulated in the Insurance Business Law regarding the introduction of regulations on consolidated financial statements of insurance companies accordingly. In relation to this, we, the GIAJ, expect that due attention should be paid to the effects of such regulations on the practical business procedures, so that general insurance companies can make themselves well prepared for the regulations by the time when they come into force.

C. International exchange and information provision
Last September, the GIAJ concluded a cooperation memorandum with the Association of Vietnamese Insurers, and based on this memorandum, we held a seminar related to construction and erection insurance in Tokyo this June, inviting practitioners from the Vietnamese insurance industry. In January this year, we also concluded a cooperation memorandum with the General Insurance Association of Indonesia.

Furthermore, we, the GIAJ, expressed our views and participated in the panel session at the Annual Conference of the International Association of Insurance Supervisors (IAIS), and also represented the Japanese general insurance industry and further enhanced its presence at other international conferences, too.

D. Disaster and crime prevention, traffic safety
In order to further contribute to the safety and security of society, we have continued to conduct various initiatives such as dissemination of an "Exploration for Disaster Prevention" program, donation of light fire engines to local municipalities and isolated islands, enlightening activities on "traffic accident-prone intersections", publication of study reports such as collective flood-hazard area maps, and distribution of leaflets for the "Theft Prevention Day (October 7)".

3. Conclusion

As our country is moving towards a substantially aging society with a decreasing population, economic growth is essential to maintain the current level of "affluence" in people's lives. Especially, it is expected that not only key industries but also other new industries such as environmental technology and the tourism business will support the growth of the Japanese economy in the future.

General insurance companies are now required to provide solutions for various risks resulting from such new industries more than ever. It can also be said that the roles played by general insurance companies have become increasingly significant in supporting society and people's daily lives as well as developing our country.

The GIAJ and its member companies intend to further enhance the quality of their services while responding to such new risks, and provide general insurance products and services from the viewpoint of customers. I would appreciate it very much, therefore, if you would kindly render us the same support and encouragement as ever.