FALIA Invitational Seminar in Japan “Investment Risk Management Course”

Overview of Life Insurance Industry in Japan

LIAJ ò Profile of the LIAJ

‹ The Life Insurance Association of Japan: V A unique industry body V A voluntary group (not mandated by law) V Non self-regulatory organization V Comprises 41 member companies (as of July 2015) V Receives no government funding V Has history of 106 years V Aims to promote the sound development of the life insurance industry in Japan, to maintain its liability, and thereby to contribute to improving quality of national life.

LIAJ 1 ò Agenda 1. Current life insurance business in Japan 2. Business environment for life insurers A) as providers of complementary security B) as institutional investors 3. Fighting back against adverse circumstances A) Reversing legacy negative spread B) Adapting to super aged society 4. Recent topics and developments A) International business operation B) Emerging distribution channels 5. Role of the LIAJ

LIAJ 2 1. Current life insurance business in Japan ‹ Major companies in global market

Ranking Company name Ranking Company name

1 Axa S.A. 11 Japan Post Insurance Co.Ltd.

2 UnitedHealth Group Inc. 12

3 Allianz SE 13 Zurich Insurance Group Ltd.

4 Assicurazioni Generali S.p.A. 14 Nippon Life Insurance Co.

5 Munich Reinsurance Co. 15 People’s Ins (Group) Co of China Ltd.

6 WellPoint Inc. 16 Dai-ichi Life Insurance Co. Ltd.

7 China Life Insurance (Group) Co. 17 Aetna Inc.

8 State Farm Group 18 Ping An Ins (Group) Co of China Ltd. National Mutual Ins Fed of Agricultural 9 Cooperatives 19 Life Insurance Corporation of India

10 Kaiser Foundation Group of Health Plans 20 Humana Inc.

Source : Best Week (2015 Jan 5), A.M. Best LIAJ 3 1. Current life insurance business in Japan ‹ The second largest market Premium volume Ranking Country Share in World Market (in millions of USD) 1 United States 528,221 19.90% 2 JAPAN 371,588 14.00% 3 United Kingdom 235,321 8.86% 4 France 172,761 6.51% 5 China 176,950 6.67% 6 Italy 145,292 5.47% 7 Germany 118,475 4.46% 8 South Korea 101,572 3.83% 9 Taiwan 79,156 2.98% 10 Australia 56,151 2.12% Source : World insurance in 2014 : back to life (24 June 2015), Swiss Re

LIAJ 4 2. Business environment for life insurers A) as providers of complementary security

• “In order to improve the sustainability of the social security system and foster a society in which future generations can live with peace of mind, it is crucial to optimise the mix of self-help, mutual help and public help. Accordingly, the life insurance industry will be given greater responsibility .” (Policy statement by chairman Yoshinobu Tsutsui, 2015.7) ‹Annual payouts : approx. ¥23 trillion

LIAJ 5 2. Business environment for life insurers ‹ Self-help : household financial assets

Source : Research and Statistics Department , Bank of Japan (March 23, 2015) LIAJ 6 2. Business environment for life insurers ‹ Mutual help : social security system Insurance Products provided by Japanese Public Pension Life insurance Companies Complement ‹Fixed Annuity Old Age Benefit ‹Variable Annuity ‹Whole Life Insurance Survivor Benefit ‹Term Insurance ‹Endowment Insurance

Public ‹ Sickness Hospitalization Insurance Health Insurance ‹Cancer Insurance

Public Long-term care ‹Long-term care Insurance Insurance LIAJ 7 2. Business environment for life insurers • Public Pension (Old Age Benefit)

‹ Cost ò National Government Subsidies ò Premium • self-employed ・・・ ¥15,590/M • employee ・・・ 17.474% of salary V Public Pension can use fund (¥123 trillion) to ensure paying benefit sustainably. Employees’ Pension ‹ Benefit Insurance òStarting age • 65 years old Basic Pension V Some older people can receive it from 60 years old. òAmount • self-employed ・・・ ¥772,800/Y (Self-employed) (Employee) • employee ・・・ income-related amount/Y VAmount is adjusted not only for price fluctuation but also for a decrease in population. òEligibility to receive pension benefit • premium payment for 25 years(10 years after October 2015)

LIAJ 8 2. Business environment for life insurers • Public Pension (Survivor Benefit)

‹ Cost If survivors VSame as Public Pension (Old Age Benefit) have children Widow’s ‹ Benefit Age òSurvivors’ Employees’ Pension 65 • Eligibility ・・・ Employee Widow’s • Amount ・・ ・ 3/4 of Old Age Benefit(Pension) Survivors’ + Survivors’ OR Employees’ Basic Pension òWidow’s Pension 60 Pension Pension • Eligibility ・・・ Self-employed Age of widow is 60-65 • Amount ・・・ 3/4 of Old Age Benefit(Pension) òSurvivors’ Basic Pension • Eligibility ・・・ Employee and Self-employed ( Employee ) ( Self-employed ) Survivors have children • Amount ・・・ ¥772,800/Y + ¥224,000/Y per child

LIAJ 9 2. Business environment for life insurers • Public Health Insurance

‹ Cost ò National and Local Government Subsidies ò Premium Age Elderly Medical Care System • Society-managed Health Insurance fixed % of salary 75 • National Health Insurance/Elderly Medical Care System premium determined by local government Retirement age ‹ Benefit òBenefit in Kind Society- • 70% of Medical Service Cost managed National V70% may increase to 80%or 90% when insured Health Health person is under 6 years old or over 70 years old. Insurance Insurance VOut of pocket expense is limited depending on age and income of insured person. VMedical Service doesn’t include some highly- advanced medical technology. òBenefit in Cash ( Employee ) (Self-employed) • Child birth allowance

LIAJ 10 2. Business environment for life insurers • Public Long-term Care Insurance

‹ Cost ò National and Local Government Subsidies ò Premium • Insured persons who are 40-65 years old Age Public long-term care insurance premium fixed depending on Public Health Insurance • Insured persons who are 65- years old 65 premium determined by local government ‹ Benefit 40 òBenefit in Kind • 90% of Long-term Care Service Cost Insured person who • Insured persons who are 40-65 years old can need care due to Others age-related diseases receive benefit only when they need long- term care due to age-related diseases. VOut of pocket expense is limited depending on age and income of insured person. VLong-term Care Service Cost is fixed depending on care-needs of insured person.

LIAJ 11 2. Business environment for life insurers ‹ Self help : life insurance policies • Penetration rate of life insurance

(Trillion yen) (%) 2500 The amount of insurance policies in force and national income 600 575

485 500 2000 The amount of insurance policies in force (insurance coverage amount) 464 409 National income 386 400 1500 339 Ratio of the amount of policies in force to national income 300 295.2 1000 214.1 200

500 128.5 100 52.7 31.2 91.8 16.3 0 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 LIAJ Source: The Life Insurance Association of Japan 12 2. Business environment for life insurers ‹ Self help : life insurance policies • Purpose of Life Insurance Ownership

56.3% Medical or surgery expense 59.6% 60.5% Survivor 51.7% 12.5% Funeral expense 13.7% Accident 19.4% 8.8% 10.9% Educational and marriage expenses of children 8.6% 8.9% Post-retirement life 8.6% 7.1% Saving 6.7% 2003 2012 4.4% Long-term care expense 3.1% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Source: Japan Institute of Life Insurance: consumer survey LIAJ 13 2. Business environment for life insurers ‹ Self help : life insurance policies • Changes in life insurance ownership rate per households

100 95 93.7 93 92.3 91.3 91.6 91.8 89.4 89.6 90.5 89.6 88 88.5 87.5 90 86 85.8

80 71 70

60

50

40 1965 1968 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 Source: Japan Institute of Life Insurance: Consumer Survey Note: The data includes the total of private life insurance (including Japan Post Insurance), postal insurance and JA cooperative LIAJ 14 2. Business environment for life insurers ‹ Self help : life insurance policies • Number of life insurance policies owned by a household

6

5 4.8 4.9 5 4.6 4.3 4.3 4.1 4.1 4.2 4 3.7 3.6 3.2 3 3 2.7 2.7 2.8

2

1

0 1968 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 Source: Japan Institute of Life Insurance: Consumer Survey LIAJ 15 2. Business environment for life insurers ‹ Self help : life insurance policies • Annual premium payment per household

12.0% Proportion of annual premium to total annual income 800 10.1% 10.0% 9.6% 700 10.0% 9.4% 9.2% 9.2% 8.9% 8.8% 8.4% 8.0% 600 8.0% 7.4% 6.9% 500

6.0% 400 638 676 574 610 300 4.0% 531 526 478 455 400 418 200 331 2.0% 252 100 Annual premium 0.0% 0 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 Source: Japan Institute of Life Insurance: Consumer Survey LIAJ 16 2. Business environment for life insurers ‹ Self help : life insurance policies • Individual insurance share by type

New Policies (2014) Policies in Force (2014)

Variable Others, 4.07 Variable Others, 4.18 Annuity, 1.58 Annuity, 1.53

Fixed Fixed Juvenile, 6.10 Annuity, Juvenile, 3.87 Annuity, 7.86 10.37 Whole Life, Whole Life, 24.49 29.60

Cancer, 10.68 Cancer, 12.76

Term Life, 13.84 Term Life, 11.25 Medical, Medical, 22.96 18.55 Endowment, 8.42 Endowment, Source: The Life Insurance Association of Japan 7.89 LIAJ 17 2. Business environment for life insurers ‹ Self help : life insurance policies • Individual insurance share by type Endowment Term Whole Life Medical Annuties Others 100% 6.47 10.31 7.58 11.38 12.49 14.01 13.12 16.34 18.76 19.06 90% 20.58 20.59 10.05 1.62 4.30 5.13 13.50 1.84 35.20 7.97 80% 1.46 1.27 1.64 8.49 3.86 14.36 13.58 70% 7.70 21.16 33.30 1.49 12.32 35.43 60% 5.51 17.69 14.71 10.79 50% 23.00 87.00 13.52 81.81 83.35 22.45 31.53 40% 77.78 79.36 73.79 27.75 23.02 30% 47.00 12.52 23.79 20% 36.64 16.39 9.80 15.89 10% 17.68 12.51 9.83 12.63 4.58 0% 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 LIAJ Source: The Life Insurance Association of Japan 18 2. Business environment for life insurers B) as institutional investors

‹Total assets : approx. ¥350 trillion ‹ The industry supports economic growth through loans and investments in infrastructure and in growth areas supporting people's living, as well as by facilitating medium to long term growth of enterprises through constructive dialogue. (Policy statement by chairman Yoshinobu Tsutsui, 2015.7)

LIAJ 19 2. Business environment for life insurers

‹ Total Assets : ¥ 350 Trillion (As of the end of March 2014)

Cash & Deposits, 1.04 Tangible Fixed Assets, 1.87 Others, 9.90

Financial Loans, 10.74

Policy Loans, 0.93

Other Foreign Securities, 2.19 JGB, 43.12 Foreign Stocks, 1.51

Foreign Corporate Bonds, 8.10

Foreign Local Government Government Bonds, Bonds, 4.04 4.43 Stocks, 4.85 Corporate Bonds, 7.29

LIAJ Source: The Life Insurance Association of Japan 20 2. Business environment for life insurers ‹ Economic trends

• GDP (Nominal) • Stock price (The Nikkei Stock Average)

(yen trillion) (yen) 600 45,000

40,000 500 35,000

400 ¥ 19,779 (as of Feb. 1, 2015) 30,000

300 25,000

20,000 200 Nominal GDP (2014): ¥ 487.9 trillion Growth Rate (2014): 1.6% 15,000 100 GDP per capita (2014): ¥ 3.839 million 10,000

0 5,000

Source: IMF - World Economic Outlook Databases, Cabinet Office Source: Nihon Keizai Shimbun LIAJ 21 2. Business environment for life insurers ‹ Economic trends

• Interest rate (JGB 10-year yield) • Yen-Dollar Exchange Rate (%) (yen)

9.5 150

8.5 140 $ 1 = 122.45 yen (as of June 30, 2015) 0.471% (as of July 1, 2015) 7.5 130 6.5 120 5.5 110 4.5 100 3.5

90 2.5

1.5 80

0.5 70

Source: Ministry of Finance Source: Mitsubishi Research and Consulting

LIAJ 22 3. Fighting back against adverse circumstances A) Reversing legacy negative spread ‹“Perfect storm”: low interest rates & falling asset values V Hit Japanese life insurers in 1990’s V Caused by collapse of the bubble economy in 1992 V Led long-lasting, severe investment environment: • Low interest rates • Poorly performing stock prices • Falling asset values • Expansion of bad debt among loans receivable

LIAJ 23 3. Fighting back against adverse circumstances A) Reversing legacy negative spread

• Stock price (The Nikkei Stock Average) • Interest rate (JGB 10-year yield) (%) (yen) 45,000 9.5

8.5 40,000

7.5 35,000 6.5 30,000 5.5 25,000 4.5 20,000 3.5

15,000 2.5

10,000 1.5

5,000 0.5

Source: Nihon Keizai Shinbun Source: Ministry of Finance LIAJ 24 3. Fighting back against adverse circumstances A) Reversing legacy negative spread ‹ Impacts on the life insurance industry: V Decline in the amount of both new business and business in force V Large negative spread: gap between real investment yield and high- assumed interest rates V Insurers turned to high-risk investments V Deteriorated financial condition V 7 insures went insolvent around 2000

LIAJ 25 3. Fighting back against adverse circumstances • Changes in the amount of negative spread

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 600 436.5 400 246.3 200

0

-107.5 -37.7 -200 -135.5 -196.0 -286.7 -276.8 -292.5 -400

-600 -550.0

-800 -739.8 -806.8 -897.5 (Y billion) -1,000 -952.3 -949.3

(Note) Total of major 4 companies (Nippon, Dai-ichi, Meiji Yasuda, Sumitomo) LIAJ 26 3. Fighting back against adverse circumstances A) Reversing legacy negative spread ‹ Efforts of the industry: V Accumulation of internal reserves V Restructuring of investment portfolios →Insurers cut down stock shares in their portfolios V Sophisticated Asset Liability Management V Reduction in operating expenses V Accumulation of additional policy reserves V Changes in sales products : − Shifted from saving type products (such as whole life insurance & endowment ) to protection type products (such as medical insurance). − Started sales of adjustable interest funding life insurance LIAJ 27 3. Fighting back against adverse circumstances A) Reversing legacy negative spread ‹ Efforts of the industry: V Accumulation of internal reserves − Internal reserves was accumulated from ¥ 3 trillion to ¥ 7 trillion

Internal Reserves (Total of major 4 companies)

8 6.9 7.1 • Total Capital 7 6.2 • Capital Reserves 5.7 5.7 5.6 5.8 6 5.3 5.3 • Price Fluctuation 5 4.5 Reserves Internal • Accumulated 4 3.3 3.4 3.5 reserves Fund for Price 3 Fluctuation 2 • Risk Reserves 1 • Contingency Reserves 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 LIAJ Source: disclosure of each company 28 3. Fighting back against adverse circumstances A) Reversing legacy negative spread ‹ Efforts of the industry: V Restructuring investment portfolios

Total assets and stock holding Trends in amount and ratio of bonds and stocks

¥ trillion 1995 2000 2012

Total 187 191 244 assets

Stocks 32 (17.1%) 29 (15.4%) 17 (6.9%)

(Excluding JP Insurance)

Source: The Life Insurance Association of Japan

LIAJ 29 3. Fighting back against adverse circumstances A) Reversing legacy negative spread ‹ Efforts of the industry: V Sophisticated Asset Liability Management

Breakdown of JGB by time of maturity Expected interest rate of new sales product

(Total of major 4 companies) 9

8

7 2000 2013 6

5 Below 10yr to maturity 88.3% 29.1% 4

3

Over 10yr to maturity 11.7% 70.9% 2

1

Based upon disclosure of each company 0 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Expected interest rate Portfolio Yield of General Account Assets LIAJ 30 3. Fighting back against adverse circumstances A) Reversing legacy negative spread ‹ Efforts of the industry: V Reduction in operating expenses

Reduction in operating expenses

5,000,000

4,500,000

4,000,000

3,500,000

3,000,000

2,500,000

2,000,000 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: FSA, LIAJ LIAJ 31 3. Fighting back against adverse circumstances • Orderly Resolution: findings from experiences

‹ Orderly fashion: no contagion(systemic risk)

‹ What facilitated orderly resolution?

V Funding by the policyholder protection scheme

V Reduction of policy reserve at the time of insolvency

V Improvement of the resolution system

V Suspension of surrender and liquidity

LIAJ 32 3. Fighting back against adverse circumstances • 8 Bankruptcy cases of insurers

Nissan Life Toho Life Daihyaku Life Taisho Life Chiyoda Life Kyoei Life Tokyo Life Yamato Life

Procedure Administrative Administrative Administrative Administrative Judicial Judicial Judicial Judicial

Excess liabilities Approx. 302.9 Approx .650 Approx. 317.7 Approx. 36.5 Approx. 595 Approx. 689.5 Approx. 73.1 Approx. 64.3 (a)-(b) (April 1997) (June 1999) (May 2000) (August 2000) (October 13, 2000) (October 23, 2000) (March 31, 2001) (October 17, 2008)

Asset (a) 1,822.7 2,190 1,300 154.5 2,233 3,725 690 194.9 (billion yen)

Liability(b) 2,125.6 2,840 1,617.6 191 2,828 4,414.5 763.2 259.2 (billion yen)

Prudential Relief Insurance Aoba Life GE Edison Life Azami Life AIG Star Life Financial Japan Life Gibraltar Life T&D Financial Life Company (Prudential Life) (Gibraltar Life) (PGF Life) (Gibraltar Life) Life (PGF Life)

Aid amount by 200 366.3 145 26.7 0 0 0 27.8 LIPPCJ (billion yen)

Changes in Policy

10% Reduction of (additional No reduction 10% 10% 10% 10% 8% No reduction policy reserve reduction for high-interest policy)

Post-reduction expected interest 2.75% 1.5% 1.0% 1.0% 1.5% 1.75% 2.6% 1.0% rate

April 20, 2001 October 19, 2001 October 1, 1997 March 1, 2000 April 2, 2001 March 31, 2001 Conversion to a April 3, 2001 Conversion to a June 1, 2009 Date of Resolution Transfer of Transfer of Transfer of contract Transfer of contract stock company Restart business stock company Restart business contract contract (Restart business) (Restart business)

LIAJ 33 3. Fighting back against adverse circumstances B) Adapting to super aged society ‹ Changes in life expectancy at birth

95 Male Female 90.93 89.55 90.29 88.68 90 87.65 86.39 84.6 85 81.9 84.19 82.82 83.55 80 78.76 81.95 80.93 79.64 74.66 75 77.72 75.92 70.19 73.35 70 Estimated 69.31 65 65.32

60 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060

Source: “Complete Life Tables” and “Abridged Life Tables in 2011”, Ministry of Health, Labour and Welfare; “Population Projection for Japan”, National Institute of Population and Social Security Research LIAJ 34 3. Fighting back against adverse circumstances B) Super aged society ‹ Aging population

4.00 Papua New Guinea 3.50 Philippines Aging Population

3.00 and Declining Malaysia Birthrate India 2.50 Mongolia Uzbekistan New Zealand France Indonesia 2.00 Vietnam USA Myanmar UK Australia China Thailand 1.50

South Korea Germany Japan Singapore 1.00 Taipei

0.50 Total fertility rate (births per woman) (Year 2010) (Year perwoman) (births rate fertility Total 0.0 5.0 10.0 15.0 20.0 25.0

Proportion of population aged 65 and over (% of total population) (Year 2011)

Source: Asian Development Bank(ADB), National Institute of Population and Social Security Research LIAJ 35 3. Fighting back against adverse circumstances B) Adapting to super aged society

‹ Challenges for the industry: V Longevity risks V Operational(procedural) risks V Maturation of life insurance policies : increasing payouts ‹ Countermeasures taken by the industry: V Product design/pricing(e.g. extra premium on mortality risks ) V Approach to Medical Insurance & Long-Term Care Insurance V Consumer services tailored to the elderly

LIAJ 36 4. Recent topics and developments A) International business operation

Poland ‹Meijiyasuda Life China Europa Group(33.46 %) ‹Nippon Life Warta Group(30%) Nissay Greatwall Life(50%) ‹ PICC Life USA South Korea ‹Meijiyasuda Life Germany Founder Meiji Yasuda Life(29.2%) ‹Nippon LIfe ‹LifeNet ‹Daido Life Nippon Life Insurance Company of America(100%) Kyobo Lifeplanet (34%) Nurnberger(5%) ‹Meijiyasuda Life Pacific Guardian Life(100%) Thailand StanCorp Financial Group, Inc (100%(expected)) ‹Nippon Life ‹Dai-ichi Life Bangkok Life(25%) Protective Life Corporation (100% ) ‹Dai-ichi Life ‹Sumitomo Life Ocean Life(24%) Symetra Financial Corporation (100%(expected)) India ‹Meijiyasuda Life Thai Life(15%) ‹Nippon Life Reliance Life(26%) Vietnam ‹Dai-ichi Life Star Union Dai-ichi Life(26%) ‹Dai-ichi Life Dai-ichi Life Vietnam(100%) Indonesia ‹Sumitomo Life ‹Dai-ichi LIfe Bao Viet Holdings(18%) PT Panin Dai-ichi Life(40%) ‹Sumitomo Life Australia PT BNI Life(40%) ‹Meijiyasuda Life ‹Dai-ichi Lie PT Avrist(29.87%) TAL Dai-ichi Life(100%) ‹Nippon Life PT Asuransi Jiwa Sequis Life (20% )

LIAJ 37 4. Recent topics and developments B) Emerging distribution channels ‹ Diversified distribution channels: • Banks • Walk-in insurance shops • Via the internet ‹ The number of sales representatives at agencies has continued to increase since the lifting of the ban on bancassurance in fiscal 2002

LIAJ Source: The Life Insurance Association of Japan 38 4. Recent topics and developments • Number of life insurance intermediary

1,200 tied sales agents 1,005 1,015 sales representatives at agencies 971 1,000 912 989 1,011 949

800 747 714 693 777 722 600

445 428 400 390 400 442 342 421 313 298 395 284 268 259 354 330 246 251 237 229 181 296 200 264 249 248 241 204 232 234 163

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: The Life Insurance Association of Japan LIAJ 39 5. Role of the LIAJ A) Guidelines and best practices V Development of voluntary guidelines that describes practical procedures and considerations. V Collection and feedback of examples of best practices.

Voluntary guidelines Member Companies 裁定審査会 Providing information to consumers Collection of best practices Appropriate presentation of sales materials LIAJ Appropriate solicitation

Appropriate insurance payout Feedback of best practices to members

Personal information protection Member Companies

LIAJ 40 5. Role of the LIAJ B) Consultation Services: Life Insurance Consultation Center V Offers consultation services FREE of charge V Responds to general inquiries V Facilitates discussions between insurers and customers

Number of inquiries and complaints

25,000 General Inquiries Compaints 20,000 6,898 15,000 4,362 8,908 10,148 7,616 6,458 7,076 6,623 10,000 5,697 5,463 5,186 14,256 12,966 11,110 5,000 9,989 10,100 8,156 9,593 7,844 7,437 6,083 6,067 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 LIAJ 41 5. Role of the LIAJ B) Consultation Services: Life Insurance Consultation Center ‹ What is “Complaint”? V Expression of dissatisfaction against life insurers ‹ How do we assist complaint resolution? V Request for quick resolution backed by regulatory measures based on insurance business act V Provide advices to customers(complainants) V Mediate a settlement

LIAJ 42 5. Role of the LIAJ C) ADR Services: Arbitration Council (((Financial ADR) ‹Alternative Dispute Resolution V Non-traditional, out of court proceedings V Simple and friendly procedure V Fast resolution: reaches resolution in apx. 4 months V Free of charge V Flexible resolution V Effective resolution: binding effect against insurers V Based on professional knowledge and experience LIAJ 43 5. Role of the LIAJ C) ADR Services: Arbitration Council (((Financial ADR)

FSA

Designation and Supervision

Arbitration Council (Financial ADR) Master agreement regarding execution of proceedings •Participation in the proceedings •Disclosure •Acceptance of conciliation proposal Submit a claim Conciliation proposal

Customer Dispute Life insurance Company

LIAJ 44 Questions?

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LIAJ 45