The GIAJ Chairman's Statement (Translation)
(Dec. 20, 2012

 I am now six months into my tenure as the Chairman of the GIAJ. I would like to report on our activities since my last press conference in September, and our future challenges.

1. Progress on our major initiatives and our challenges

(1) Measures to make general insurance more robust, sound and reliable

i. Enhancing public awareness of general insurance

Yasuyoshi Karasawa, ChairmanYasuyoshi Karasawa, Chairman

(a) Making sales material and solicitation practices more consumer-friendly
 Our new 'Customers Voices and Experts Advisory Council' (CVEAC), made up of experts that include consumer advocates and legal professionals, has come up with design examples for more consumer-friendly sales material and pamphlets and has also identified the legislative changes needed for this. These will be put forward to the Financial System Council's Working Group on Insurance Products and Services for their consideration.

(b) Improving the way we do business in line with customer feedback
 From this year, we are accelerating our efforts on improving the way we do business by taking better account of customer feedback. For instance, based on some of the feedback we received during the first half of this fiscal year, we decided to look into and improve how we disseminate information and how we train our front-line agents and solicitors. This will be done under the supervision of the CVEAC. We will continue to undertake effective measures aimed at the betterment of our services.

(c) Measures on harmonization and standardization
 Our Harmonization and Standardization Project Team is making good progress in its efforts to harmonize application procedures and forms. We are working to deliver on the 130 recommendations that are likely to benefit customers the most if achieved, 30 of which are already in the process of being implemented. These include for instance standardized special measures such as allowing grace-periods for fire insurance premiums in declared disaster areas.

(d) Improving the level of agents and solicitors (General Insurance College Course)
 The 'General Insurance College Course' that was launched jointly last July with the Independent Insurance Agents of Japan Inc. has been a great success, and has to date accredited over 30,000 sales staff as 'General Insurance Planners' proficient in insurance related laws and taxes. Starting next year, we will offer a new 'Consulting Course' as well, for which we have already started to register applicants. These programs will raise the level and quality of our industry's front-line staff dealing with and giving advice to customers.

ii. Minimizing social losses

(a) Visit to the General Insurance Association of Korea (GIAK)
 Following my visit to London in July, I had the opportunity to visit Seoul this October where I held talks with the GIAK and exchanged information on our respective efforts aimed at tackling insurance fraud. Our two associations saw eye to eye on many issues and agreed to cooperate further on this subject going forward. We look forward to accelerating joint efforts on fighting fraud.

(b) Strengthening insurance fraud and fraudulent claims prevention
 The CVEAC has to date been looking into ways to create an industry-wide database targeting insurance fraud, and to enhance vehicle theft prevention measures, etc.

 Based on the ABI (Association of British Insurers) model and also CVEAC recommendations, we did a survey on the level of the general public's ethics and morals and also started to collect industry-wide data to identify the extent of insurance fraud and fraudulent claims. Additionally, next month, we will launch a new 'Insurance Fraud and Fraudulent Claims Prevention Department' that will have the remit to drive and steer our industry-wide fight against insurance fraud. It will analyze information and data collected from insurers and will also operate an insurance fraud hot-line (0120-271-824) to which people can report suspected fraud. We remain adamant that it is absolutely in the public interest to accelerate our efforts to minimize the cost of social losses caused by accidents, disasters and crime.

(c) Raising awareness of disaster prevention
 This year we held our ninth annual "Exploration for Disaster Prevention" event which is an educational program designed to raise risk awareness among school children. Given the heightened awareness of disaster prevention and preparation due to the Great East Japan Earthquake, this year we had a record number of 2,018 entries from 417 elementary schools and children-groups across the country. After a selection process, we have chosen 15 winners, all of whom will be invited to a ceremony on January 26.

(2) Measures to make general insurance companies and businesses more robust, sound and reliable

i. Strengthening the soundness of general insurers

(a) Tax reform petitions for fiscal 2013 (Broadening the pre-event catastrophe loss reserve system)
 We set out our requests for tax reforms for fiscal 2013 in June. We are asking for the existing pre-event catastrophe reserve system (particularly for fire insurance) to be broadened. The recent payouts of numerous catastrophe losses have resulted in a significant reduction in the amount of insurers' pre-event catastrophe reserves and those need to be swiftly restored to ensure the sustainable viability of the cover we provide to customers. We will continue to work hard on advocating our tax reform requests and getting them accepted next year.

(b) Measures that take account of the Residential Earthquake Insurance system review
 The 'Residential Earthquake Insurance (REI) Project Team' that was set up in the Ministry of Finance has published its report. It identifies raising the REI system's resilience and product-appeal as key factors going forward. Increasing the REI's resilience will raise the level of the public's overall confidence and sense of security in the system. Improving its product-appeal entails looking into better and more prompt ways of conducting damage assessments in the event of major disasters and simplifying the application process for premium discounts for earthquake-resilient buildings.

 REI aims to help those affected by earthquakes to get back on their feet as soon as possible. Fully supporting this underlying principle, we will spare no effort in promoting REI.

(c) Financial System Council's Working Group on Banking Regulation that contributes to Financial Stability
 The Financial System Council's Working Group on Banking Regulation that contributes to Financial Stability is currently looking into ways to improve existing resolution frameworks so that all financial firms (including insurers and security brokering firms) can be wound-down in an orderly manner in the event of a failure. We will ensure any discussion takes account of and is reflective of the unique characteristics of general insurance.

(d) Voicing our opinions on international regulatory issues
 Regarding the IAIS's proposed policy measures for G-SIIs (Global Systemically Important Insurers) that was put out for consultation in October, we asked for measures that targeted - and were commensurate with the risks posed by - non-traditional insurance and non-insurance activities.

 At the IAIS Annual Conference in October, we joined a panel session on consumer protection and introduced our ongoing work on making products and material more consumer-friendly.

 In November, we welcomed the Chairman of EIOPA (European Insurance and Occupational Pensions Authority) to our offices and held very productive talks on international insurance regulation.

 These are all important initiatives. We will continue to closely follow discussions on the international front and actively voice our views. We will do this while further promoting the strengths and validity of our own systems, processes, and frameworks in place, and push for more mutual understanding and cooperation between jurisdictions.

ii. Diversifying our business to better meet customer needs

(a) Financial System Council's Working Group on Insurance Products and Services
 We are currently requesting the Financial System Council's Working Group on Insurance Products and Services to ease the conditions for insurers to engage in the concerted activities necessary to provide coverage for new types of risk unknown to insurers. We are arguing that in order to be capable of providing cover to our customers in a timely manner even for new and unknown risks, it is crucial that we be allowed to collect, pool and store necessary data. We are also asking them to allow insurers to offer a broader range of insurance associated services such as trust services regarding the handling of paid out insurance claims and a wider range of ancillary services related to disaster prevention consulting. We will push forward our petitioning efforts on this front.

(b) Collaboration with overseas institutions
 We are always looking into ways to better promote and support the development of sound general insurance markets globally, and to assist our members companies' operations abroad. To this end, we are also increasingly engaging and cooperating with our overseas counterparts and related institutions.

 This October, we joined GFIA (The Global Federation of Insurance Associations) as one of its founding members, an organization that aims to strengthen cooperation between insurance trade associations around the world. In addition, we hosted the ISJ (Insurance School of Japan) Overseas Seminars in Myanmar and Cambodia this year jointly with the Non-Life Insurance Institute of Japan, spoke about the GIAJ's role and value at a conference in India, and also sent a trainee to the ABI. We have also entered into a capacity building agreement with related Indonesian authorities to help them implement certain systems that follows our model here in Japan.

 For the further betterment and development of the insurance industry, we will continue to work on building strong international relations and goodwill.

2. In closing

 During the past six months as the Chairman of the GIAJ, I have pushed forward these and other initiatives.

 All workstreams are ever-evolving and require continuous time, effort and commitment.

 I remain committed to delivering on my promises to make our industry more robust, sound and reliable. I will keep my foot on the pedal and promise to throw my weight behind every piece of work we do. Your continued support and cooperation are greatly appreciated.