3. The Life Insurance Association of Japan
a) Basic Information The Life Insurance Association of Japan (LIAJ) started as an incorporated association with formal sanction by the authorities concerned on December 7, 1908. Since then, the Association has continued to make efforts for the sound development of the life insurance industry. 1) Objective To strive for the sound development of the life insurance industry and maintain its reliability. 2) Activities page I) Activities to provide information and promote understanding on the life insurance business ························ 43 II) Consultation services, complaint processing and dispute resolution operations regarding life insurance ······· 43 III) Activities regarding systems and measures to ensure appropriate operation of the life insurance business ··· 45 IV) Activities regarding education and training for the staff of member companies ·········································· 49 V) Research and study activities regarding the theory and practice of life insurance VI) Activities regarding making requests and proposals to relevant authorities, agencies and organizations ······· 51 VII) Activities to fulfill social responsibilities ································································································ 52 VIII) Other activities considered necessary to achieve the goals of the LIAJ Note: This “Life Insurance Business in Japan” does not specifically introduce (V) Research and study activities regarding the theory and practice of life insurance and (VIII) Other activities considered necessary to achieve the goals of the LIAJ. 3) History 1898 ・The Forum of Japanese Life Insurers was founded. 1905 ・The Forum of Japanese Life Insurers was reorganized into the Association of Japanese Life Insurers. 1908 ・The Association of Japanese Life Insurers was authorized as an incorporated association. 1942 ・The Life Insurance Control Association was founded. The Association of Japanese Life Insurers was renamed the Life Insurance Network, and most of its operations were transferred to the Life Insurance Control Association. 1945 ・The Life Insurance Council of Japan was founded to take over the operations of the Control Association after it was dissolved. The Life Insurance Network was renamed The Life Insurance Association of Japan (LIAJ). All the operations of the Life Insurance Network were transferred to the LIAJ. 2008 ・The LIAJ marked the 100th anniversary since its foundation. 2014 ・The LIAJ made a transition from an incorporated association to a general incorporated association. 4) Membership All 41 life insurance companies operating in Japan (As of December 31, 2016) 5) Board Members Representatives of member companies and full-time officers of the LIAJ (See page 40 for the list of Board Members.) 6) Offices 52 offices (the headquarters in Tokyo and 51 local offices) (As of December 31, 2016) 7) Number of Employees 268 employees (As of December 31, 2016) 8) Funding Membership fees and revenues from business activities such as examination business (Budget for fiscal 2015: approx. 5.24 billion yen, of which 4.14 billion yen from membership fees and 1.05 billion yen from revenues from business activities)
LIAJ Business in Japan 2015/2016 38 3. The Life Insurance Association of Japan
Organization Chart
(As of December 31, 2016) The Life Insurance Association of Japan (LIAJ)
General Meeting
Auditors
Board of Directors
Committees Association Office Life Insurance Consultation Center General Affairs Dept. Arbitration Local Committees Public Relations Dept. Advisory Committee Administration & Education Dept. Arbitration Planning Dept. Council
Research Dept.
Joint System Office
Life Insurance Consultation Office
International Dept.
Local Offices (51 Districts)
LIAJ Business in Japan 2015/2016 39 3. The Life Insurance Association of Japan
Board Members (As of December 31, 2016)
Chairman Akio Negishi President, Meiji Yasuda Life Insurance Company Vice Chairmen Masahiro Hashimoto President and Chief Executive Officer, Sumitomo Life Insurance Co. Minoru Kudo Representative Director and President, Daido Life Insurance Co. Directors Yoshinobu Tsutsui President, Nippon Life Insurance Co. Shinichi Hirose Member of the Board, President, Tokio Marine & Nichido Life Insurance Co., Ltd. Yasunori Kume Representative, CARDIF Assurance Vie Koichiro Watanabe President, THE DAI-ICHI LIFE INSURANCE COMPANY, LIMITED Tomoo Hagimoto President and Representative Director, Sony Life Insurance Co., Ltd. Akira Nishino Representative Director and President, AEGON Sony Life Insurance Co., Ltd. Kaoru Takahashi President & CEO, Sompo Japan Nipponkoa Himawari Life Insurance, Inc. Kazunori Kataoka President, ORIX Life Insurance Corporation President & CEO, Representative Executive Officer, Manulife Life Insurance Hitoshi Morita Company Mitsuru Imoto Representative Director and President, MassMutual Life Insurance Company Yoshiteru Yoneyama President, Fukoku Mutual Life Insurance Co. Shoichiro Ichitani President and Chief Executive Officer, The Prudential Life Insurance Co., Ltd. Norimitsu Shimada Executive Managing Director, NN Life Insurance Company, Ltd. Representative Director, President and COO, AIG Fuji Life Insurance Company, Norio Tomono Limited Director, Representative Executive Officer, Deputy President and Chief Distribution Tomohiko Komoto Officer, AXA Life Insurance Co., Ltd. President of Aflac Japan, Representative in Japan of Aflac, American Family Life Hiroshi Yamauchi Assurance Company of Columbus Director, Representative Statutory Executive Officer and Vice Chairman, MetLife Eiji Hirano Insurance K.K. Hitoshige Tambo President, Mitsui Sumitomo Aioi Life Insurance Co., Limited Vice Chairmen Toyonari Sasaki The Life Insurance Association of Japan (Full-time) Ichiro Wakasa The Life Insurance Association of Japan (Full-time) Director Kazushige Mori The Life Insurance Association of Japan (Full-time) Auditors Daisuke Iwase President & Representative Director, LIFENET INSURANCE COMPANY Yuzo Hashiya President and Representative Director, Rakuten Life Insurance Co., Ltd. Yoshiki Sato President, Asahi Mutual Life Insurance Co. Kazuo Ohtake Attorney at Law
LIAJ Business in Japan 2015/2016 40 3. The Life Insurance Association of Japan
Member Companies
(As of December 31, 2016, in alphabetical order)
AEGON Sony Life Insurance Co., Ltd. http://www.aegonsonylife.co.jp/ Aoyama Oval Building, 5-52-2 Jingumae, Shibuya-ku, Tokyo 150-0001 AIG Fuji Life Insurance Company, Limited http://www.aig-fuji-life.co.jp/ Kamiyacho MT building, 4-3-20 Toranomon, Minato-ku, Tokyo 105-8633 Allianz Life Insurance Japan Ltd. http://life.allianz.co.jp/ Anzen Building, 1-6-6 Motoakasaka, Minato-ku, Tokyo 107-0051 American Family Life Assurance Company of Columbus http://www.aflac.co.jp/ Shinjuku Mitsui Building, 2-1-1 Nishi-shinjuku, Shinjuku-ku, Tokyo 163-0456 Asahi Mutual Life Insurance Co. http://www.asahi-life.co.jp/ Asahi Seimei Otemachi Building, 2-6-1 Otemachi, Chiyoda-ku, Tokyo 100-8103 AXA Life Insurance Co., Ltd. http://www.axa.co.jp/ NBF Platinum Tower, 1-17-3 Shirokane, Minato-ku, Tokyo 108-8020 AXA Direct Life Insurance Company Limited http://www.axa-direct-life.co.jp/ 8th Floor, KDX Kojimachi Building, 3-3-4 Kojimachi, Chiyoda-ku, Tokyo 102-0083 CARDIF Assurance Vie http://www.cardif.co.jp/ 9th Floor, Shibuya Infoss Tower, 20-1 Sakuragaoka-cho, Shibuya-ku, Tokyo 150-0031 Crédit Agricole Life Insurance Company Japan Ltd. http://www.ca-life.jp/ 15th Floor, Shiodome Sumitomo Building, 1-9-2 Higashi-Shimbashi, Minato-ku, Tokyo 105-0021 Daido Life Insurance Co. http://www.daido-life.co.jp/ 1-2-1 Edobori, Nishi-ku, Osaka-shi 550-0002 Fukoku Mutual Life Insurance Co. http://www.fukoku-life.co.jp/ 2-2-2 Uchisaiwaicho, Chiyoda-ku, Tokyo 100-0011 Fukokushinrai Life Insurance Co., Ltd. http://www.fukokushinrai.co.jp/ 8-17-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo 160-6132 JAPAN POST INSURANCE Co., Ltd. http://www.jp-life.japanpost.jp/ 1-3-2 Kasumigaseki, Chiyoda-ku, Tokyo 100-8798 LIFENET INSURANCE COMPANY http://www.lifenet-seimei.co.jp/ Kojimachi NK Building, 2-14-2, Chiyoda-ku, Tokyo 102-0083 Manulife Life Insurance Company http://www.manulife.co.jp/ 3-20-2 Nishi-shinjuku, Shinjuku-ku, Tokyo 163-1430 MassMutual Life Insurance Company http://www.massmutual.co.jp/ 2-1-1 Osaki, Shinagawa-ku, Tokyo 141-6023 Medicare Life Insurance Co., Ltd. http://www.medicarelife.com/ 5th Floor, Sumitomo-seimei Kiyosumi Park Building, 1-11-12 Fukagawa, Koto-ku, Tokyo 135-0033 Meiji Yasuda Life Insurance Company http://www.meijiyasuda.co.jp/ 2-1-1 Marunouchi, Chiyoda-ku, Tokyo 100-0005 MetLife Insurance K.K. http://www.metlife.co.jp/ 4-1-3 Taihei , Sumida-ku, Tokyo 130-0012 Midori Life Insurance Company http://www.midori-life.com/ 6-3-43 Ohji, Kita-ku, Tokyo 114-8595 Mitsui Life Insurance Company Limited http://www.mitsui-seimei.co.jp/ 1-1-20 Aomi, Koto-ku, Tokyo 135-8222
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Mitsui Sumitomo Aioi Life Insurance Co., Limited. http://www.msa-life.co.jp/ 2-27-2, Shinkawa, Chuo-ku, Tokyo 104-8258 Mitsui Sumitomo Primary Life Insurance Company, Limited http://www.ms-primary.com/ 16th Floor, Yaesu First Financial Building, 1-3-7 Yaesu, Chuo-ku, Tokyo 103-0028 Nippon Life Insurance Co. http://www.nissay.co.jp/ 3-5-12 Imabashi, Chuo-ku, Osaka-shi 541-8501 NN Life Insurance Company, Ltd. https://www.nnlife.co.jp/ 26th Floor, New Ohtani Garden Court, 4-1 Kioicho, Chiyoda-ku, Tokyo 102-0094 ORIX Life Insurance Corporation http://www.orixlife.co.jp/ Akasaka Star Gate Plaza, 2-3-5 Akasaka, Minato-ku, Tokyo 107-0052 Rakuten Life Insurance Co., Ltd. http://www.rakuten-life.co.jp/ Rakuten Crimson House, 1-14-1 Tamagawa, Setagaya-ku, Tokyo 185-0094 SBI Life Insurance Co., Ltd. http://www.sbilife.co.jp/ Shinjuku NS Building, 2-4-1 Nishi-shinjuku, Shinjuku-ku, Tokyo 163-0822 Sompo Japan Nipponkoa Himawari Life Insurance, Inc. http://www.himawari-life.co.jp/ Shinjuku Central Park Building, 6-13-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo 163-8626 Sony Life Insurance Co., Ltd. http://www.sonylife.co.jp/ Otemachi Financial City Grand Cube, 1-9-2 Otemachi, Chiyoda-ku, Tokyo 100-8179 Sumitomo Life Insurance Co. http://www.sumitomolife.co.jp/ 1-4-35 Shiromi, Chuo-ku, Osaka-shi 540-8512 THE DAI-ICHI LIFE INSURANCE COMPANY, LIMITED http://www.dai-ichi-life.co.jp/ 1-13-1 Yurakucho, Chiyoda-ku, Tokyo 100-8411 The Dai-ichi Frontier Life Insurance Co. Ltd. http://www.d-frontier-life.co.jp/ 17th Floor, Osaki Wiz Tower, 2-11-1 Osaki, Shinagawa-ku, Tokyo 141-0032 The Gibraltar Life Insurance Co., Ltd. http://www.gib-life.co.jp/ Prudential Tower, 2-13-10 Nagata-cho, Chiyoda-ku, Tokyo 100-8953 The Neo First Life Insurance Company, Limited http://neofirst.co.jp/ Osaki Wiz Tower, 2-11-1 Osaki, Shinagawa-ku, Tokyo 141-0032 The Prudential Life Insurance Co., Ltd. http://www.prudential.co.jp/ Prudential Tower, 2-13-10 Nagata-cho, Chiyoda-ku, Tokyo 100-0014 The Prudential Gibraltar Financial Life Insurance Co., Ltd. http://www.pgf-life.co.jp/ Prudential Tower, 2-13-10 Nagata-cho, Chiyoda-ku, Tokyo 100-0014 Taiyo Life Insurance Company http://www.taiyo-seimei.co.jp/ 2-7-1 Nihombashi, Chuo-ku, Tokyo 105-0022 Tokio Marine & Nichido Life Insurance Co., Ltd. http://www.tmn-anshin.co.jp/ Tokio Marine Nichido Building Shinkan, 1-2-1 Marunouchi, Chiyoda-ku, Tokyo 100-0005 T & D FINANCIAL LIFE INSURANCE COMPANY http://www.tdf-life.co.jp/ 1-1-1 Shibaura, Minato-ku, Tokyo 105-0023 Zurich Life Insurance Company Ltd. http://www.zurichlife.co.jp/ 16th Floor, Nakano Central Park South, 4-10-2 Nakano, Nakano-ku, Tokyo 164-0001
LIAJ Business in Japan 2015/2016 42 3. The Life Insurance Association of Japan b) The LIAJ's Main Activities for Fiscal 2015 I) Activities to provide information and promote understanding on the life insurance business Holding Interactive Dialogues on Life Insurance and Periodical Engagement with Consumers' Groups/Organizations The LIAJ holds the "Interactive Dialogue on Life Insurance" in cooperation with the Japan Institute of Life Insurance (JILI), with the aim of promoting a proper understanding of the life insurance business through dialogues with consumer groups/organizations. In fiscal 2015, the LIAJ held 129 meetings in total across Japan with consumers' groups/organizations and journalists. Additionally, the LIAJ periodically visits such organizations to provide information and hear their opinions on the life insurance industry and the LIAJ's activities. Providing Basic Information and Knowledge about Life Insurance on the Website The LIAJ posts basic life insurance information and knowledge on its website, covering various topics. Also, using a "Quick Search for Life Insurance Products" on the LIAJ's website, customers can find relevant information on life insurance products. Publication of a Summary of Life Insurance Statistics The LIAJ collects statistics on the life insurance business of all life insurers monthly, quarterly, and annually, and publishes these on its website. In addition, the LIAJ prepares and publishes "Life Insurance Fact Book" which summarizes the key performance of life insurers and the results of the life insurance industry, and "Statistical Data Package of Life Insurance Market in Japan" which contains detailed statistical data of life insurers. Review and Further Refinement of Standards for Disclosure Laws stipulate detailed items to be disclosed by life insurers regarding their business operation. The LIAJ has also prepared a set of industry-wide "Standards for Disclosure" with additional items that it considers should be voluntarily added by member companies in the light of usefulness for customers and investors. The LIAJ reviews these standards every year for possible refinement. Publication of a Guidebook on Financial Reports of Life Insurers The LIAJ has prepared a guidebook on financial reports of life insurers to help customers better understand business conditions of life insurers and has published it on their website. Providing Disclosure Materials of Life Insurers In addition to prepare disclosure materials of life insurers in the LIAJ's headquarters and local offices, the LIAJ provides them to about 400 consumer centers across Japan in order to improve access to the materials. Materials regarding financial results, statistics for first half year and quarterly statistics of life insurers are also available on the LIAJ's website. II) Consultation services, complaint processing and dispute resolution operations regarding life insurance Life Insurance Consultation Center The LIAJ is designated by the FSA as a designated dispute resolution body based on the Insurance Business Act, and therefore processes complaints and resolves disputes related to the life insurance business. In order to conduct those activities, the Life Insurance Consultation Center was established within the LIAJ. The Center aims to raise public understanding of and trust in life insurance as well as help protect policyholders' legitimate interests. The Center investigates the cases in a prompt and transparent manner from a fair and neutral position upon receiving an inquiry or complaint about life insurance or an application for dispute resolution procedures. The Center operates its services based on the "Operational Rules for a Designated Dispute Resolution Body for (foreign) Life Insurance Business" which was authorized by the FSA.
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Appropriate Handling from a Fair and Neutral Position of Consumers' Inquiries and Complaints Received In the Life Insurance Consultation Center (including Life Insurance Consultation Office (Tokyo), and the Center's corresponding 51 local offices in every prefecture), expert consultants deal with inquiries and complaints from a neutral position. When the Center receives a request to resolve a complaint, it strives to reach an early settlement such as by making requests for a settlement and by mediating settlements with the life insurers involved. Number of inquiries and complaints Fiscal 2014 Fiscal 2015 General Inquiries 6,067 6,064 Complaints 5,186 4,724 Total 11,253 10,788 Dispute Resolution by "Arbitration Council" When a customer files a complaint with the Center, the Center facilitates communication between the life insurer involved and the customer to reach a settlement. In principle, if they cannot reach a settlement within one month, the Center convenes the Arbitration Council to resolve the dispute. In response to the increase in the number of filings in fiscal 2014 after its operational reforms, the number of committee members was increased by 5 during fiscal 2015 and 2016. The Arbitration Council currently consists of 15 members (6 lawyers, 6 consumer advisors and 3 staff of the Life Insurance Consultation Center) and strives to resolve the dispute appropriately from a fair and neutral position. Flow of Procedure to Apply for the Arbitration Council
Number of Filings for Procedures of the Arbitration Council FY 2008 2009 2010 2011 2012 2013 2014 2015
Number 82 122 172 260 208 202 194 312
LIAJ Business in Japan 2015/2016 44 3. The Life Insurance Association of Japan
Establishment of Arbitration Advisory Committee Consisting of External Experts The Life Insurance Consultation Center established the Arbitration Advisory Committee consisting of external experts such as scholars, lawyers, doctors, representatives of consumer organizations and full-time executives of the LIAJ. In addition to responding to consultations by the Head of the Life Insurance Consultation Center (Chairman of the LIAJ), the Arbitration Advisory Committee makes recommendations and proposals, as appropriate, to ensure fair and smooth operation of the Center's business and the Arbitration Council. The Center has a scheme for reflecting those recommendations and proposals in the measures of the LIAJ and member companies. Provision of Information regarding Consultations and Complaints The Center publishes the annual "Life Insurance Consultation Center Report" and "Summaries of Arbitration", which summarize the inquiries and complaints received during the year. To help prevent disputes and their recurrence, the Center also prepares the quarterly "Voice Report" (sector-wide basis and individual insurer basis), which provides information about inquiries and complaints in categories, their numbers, as well as typical complaints that have been filed. In addition, the LIAJ discloses the number of complaints by company on its website to ensure a neutral, fair and transparent process for complaint handling. Reflecting Complaints in Improvement of Management The life insurance industry is struggling to reflect complaints in improvement of their management. To help make customers aware of the trend of complaints and how member companies deal with their complaints, the LIAJ discloses information including the number and details of complaints as well as those of payment/non-payment of insurance claims on the LIAJ's and member companies' websites. III) Activities regarding systems and measures to ensure appropriate operation of the life insurance business Development of the Code of Conduct for Member Companies In order to achieve greater reliability on insurance business, the LIAJ has developed the "Code of Conduct" that member companies and their officers/employees must follow. The Code of Conduct consists of the "Principles of Conducts", the principles and criteria which should be complied with by each life insurer and its employees as they operate a company and conduct business, and the "Action Guidelines" that should also be complied with. Development and Review of Voluntary Guidelines suggesting Practical Points to Consider To help life insurers to provide appropriate handling and best services for policyholders, from arranging the contract to the payment of benefits, the LIAJ has developed voluntary guidelines which suggest practical transactions and points to consider. These guidelines are referred to by each member company and their executives and regular employees, and are periodically reviewed by the LIAJ. Collection of Best Practices to Reflect in Improvement of Management The LIAJ had conducted "Follow-Up Survey" to monitor the measures taken by member companies in accordance with voluntary guidelines and to better reflect objectives of the guidelines in their management. Meanwhile, Consumers' Opinions Task Force, the cross-sectional body within the LIAJ, had conducted survey to collect and analyze information on counseling, complaints, opinions or requests, and to collect member companies' initiatives in the field where many complaints or requests were seen. Since 2015, these two surveys were integrated into the regular "Value-Up Survey" to monitor the measures taken by member companies in accordance with the voluntary guidelines. Through collecting and sharing examples of practices adopted by member companies to improve customer services including measures reflecting the opinions and requests from consumers and through improving the PDCA management cycle within member companies, the LIAJ encourages them to adopt the guidelines in their management.
LIAJ Business in Japan 2015/2016 45 3. The Life Insurance Association of Japan
Efforts to Address Revisions to the Insurance Business Act and Encouraging Establishment of Management Systems for Appropriate Solicitation As the business environment surrounding the Japanese insurance market is changing significantly (e.g. diversification of the distribution channel), partial revisions were made to the Insurance Business Act fully implemented on May 29, 2016 to introduce fundamental rules for insurance solicitation (e.g. obligation to confirm customers' intention and to provide necessary information) and obligation on insurance agencies to have management systems for appropriate solicitation in place. The LIAJ encourages the member companies' establishment and operation of management systems for appropriate solicitation by compiling and publishing a commentary in the form of questions and answers on main points of the revision and drawing up "Guidelines for Insurance Agents to Have Management Systems for Appropriate Solicitation in Place" and "Guidelines for Solicitation-related Activities". Activities as Authorized Personal Information Protection Organization The LIAJ was accredited as an Authorized Personal Information Protection Organization by the Financial Services Agency under the Act on the Protection of Personal Information in April 2005. The LIAJ developed the Personal Information Protection Guidelines and provides guidance or recommendations on complying with the guidelines to each member company, and also receives related complaints from customers and shares them with member companies. The Social Security and Tax Number System On May 24, 2013, the Act on the Use of Numbers to Identify a Specific Individual in the Administrative Procedure was enacted, which prescribes the Social Security and Tax Number System. Under this system, mayors issue a single 12-digit Individual Number (as known as "My Number") to each resident in Japan, with the aim of improving administrative efficiency, enhancing public convenience, and realizing a more equal and fair society. Each person holding a resident record was notified of their own Individual Number from October 2015, which is used sequentially for administrative procedures related to social security, taxation, and disaster response beginning in January 1, 2016. Life insurance companies need to apply the procedure such as obtaining Individual Numbers of policyholders and beneficiaries, including the numbers on payment records, and submitting the records to tax offices following the initiation of the system. On the other hand, if the Social Security and Tax Number System is expanded in the future to enable all life insurance companies to utilize the system, each insurance company will be able to access administrative information with the prior consent of their customers, even in daily operation. Each insurance company will be capable of making prompt and concrete claims procedure as well as providing appropriate maintenance service, and therefore, since life insurance sector plays a public role to support the public security, contributing to realize safe, secure and affluent life for the citizens. Measures to Prevent Abuse of Life Insurance Life insurance has the risk to be abused to make illegitimate profits (moral risk). The LIAJ is taking various measures to mitigate this moral risks as well as cooperating with the police's investigation to avoid overlooking of death caused by crimes. Policy Data Registration System When life insurance companies receive an application for insurance policy (including riders like death benefit and hospitalization benefit), the relevant data of policyholders may be stored at the registration center within the LIAJ. Life insurance companies refer to the registered details to judge whether to accept a contract or whether to pay claims for death or hospitalization benefits, to prevent attempts to receive insurance claims fraudulently by enrolling in several insurance policies for short periods. Policy Data Inquiry System Life insurance companies and the National Mutual Insurance Federation of Agricultural Cooperatives (Zenkyoren) have jointly operated the Policy Data Inquiry System to contribute to the sound development of life insurance and cooperative systems since April 2002. Under the system, the data held by Zenkyoren and the data registered in the Policy Data Registration System by the LIAJ can be
LIAJ Business in Japan 2015/2016 46 3. The Life Insurance Association of Japan
cross-referenced. They refer to the registered details to judge whether to accept a contract or whether to pay claims for death or hospitalization benefits. Cross Reference System for Assessing Insurance Claims Upon receiving an insurance claim, participating insurance companies cross-reference each other's data on policyholders. They then use the information when deciding whether to accept a claim from a policyholder. Liaison Conference between Life Insurers and the Police In order to prevent the criminal abuse of life insurance, the LIAJ holds liaison meetings with the National Police Agency. The "Liaison Conference between Life Insurers and the Police" is held between the LIAJ's 52 local offices and municipal police headquarters to exchange information on organized crime groups, special frauds and prevention of moral hazard. Measures against Special Frauds Against special fraud, which has become a social issue, the LIAJ creates posters to call consumers' attention in collaboration with the National Police Agency and the Financial Services Agency in addition to distributing flyers to attract consumers' attention in its local offices across Japan. Measures against Money Laundering The LIAJ creates a handbook, a commentary in the form of questions and answers and a poster to be displayed for customers, to raise life insurance companies' understanding regarding money laundering. Measures against Anti-social Forces The LIAJ has, in the Code of Conduct, declared its commitment to cutting off any relations with anti-social forces (ASF). In this regard, the LIAJ is taking measures such as encouraging member companies to add a clause that enables insurers to terminate their contracts with ASF into the policy clauses, establishing a database regarding anti-social forces for member companies' reference, and holding discussions with other organizations in order to dissolve any insurance contracts with ASF or related parties. Efforts to combat Tax Evasion Foreign Account Tax Compliance Act On March 18, 2010, the Foreign Account Tax Compliance Act (FATCA) was enacted in the U.S. as part of the Hiring Incentives to Restore Employment Act of 2010, with the aim of preventing tax evasion by U.S. taxpayers using offshore financial accounts. Under the Act, foreign financial institutions outside of the U.S. are required to report certain information about financial accounts held by U.S. taxpayers directly to the U.S Internal Revenue Service (IRS). As of July 1, 2014, in accordance with the "Statement of Mutual Cooperation and Understanding between the U.S. Department of the Treasury and the Authorities of Japan to Improve International Tax Compliance and to Facilitate Implementation of FATCA", Japanese life insurance companies started implementing the due diligence procedures to identify certain financial accounts held by U.S. taxpayers when concluding life insurance policy. And also, they started reporting the account information to the IRS when the customers are identified as U.S. taxpayers. OECD Common Reporting Standard Following the increased demands for uniforming information exchanged between each country with the aim of preventing tax evasion in accordance with the Automatic Exchange of Financial Account Information (AEOI), the OECD also released a full version of Common Reporting Standard (CRS) for AEOI prepared by the OECD Committee on Fiscal Affairs on July 21, 2014. As for Japan, the Cabinet approved the implementation of the CRS, beginning January 1, 2018 (i.e. committed to first automatic exchange of information in 2018) on January 14, 2015. In Japan, relevant legislations to support CRS were published on March 31, 2015, which will come into force on January 1, 2017. The legislations will require life insurance companies in Japan to collect and report to the National Tax Agency, non-resident account holder information sorted by residence jurisdiction, after identifying the residence of the account holder by following due diligence procedures.
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LINC (The Life Insurance Network Center) The life insurance industry established an industry-wide network system called the Life Insurance Network Center, or LINC in 1986. This network has been striving to enrich their services to improve information security in the insurance industry, and also reduces the burden of clerical work for client companies. With several improvements to the network system since its establishment, the Center currently operates the following 12 systems.
System Outline of Functions Inter-network settlement system 1 To enable fund settlement among life insurers. among member companies Data exchange system on To integrate data on individual policies whose premiums are collected individual policies whose monthly 2 through payroll deduction and exchange them between life insurers and premiums are collected through client companies which make payroll deductions. payrolls Data exchange system To act as an intermediary for exchanging data on asset-formation 3 on asset-formation insurance insurance. To register the details of medical care insurance contracts to check Registration system 4 whether the same person is designated as a medical care insured with on medical care insurance several insurance companies. Registration system To perform application procedures for registration of life insurance 5 on life insurance solicitors solicitors and manage the register. To register the details of contracts to check contracts which designate Registration system 6 the same person as a beneficiary of hospitalization and death benefits on policy data in order to prevent moral hazard. Data distribution system on To collect and distribute data on National Pension Fund insurance 7 National Pension Fund insurance contracts to life insurers offering the insurance. Data exchange system To collect statistical data from life insurers to prepare materials on the 8 on life insurance business business performance of the life insurance industry. statistics Data exchange system on joint To exchange data between life insurers and trust banks to prepare the 9 Employee's Pension Fund joint report on the Employees' Pension Fund. Insurance Report To cross-reference contracts among life insurers when a claim is filed Cross referencing system for insurance benefits and mutual aid money in order to judge whether 10 for assessing insurance claims to pay the benefits, cancel the contracts or allow the contracts to lapse in order to prevent moral hazard. Data exchange system on To exchange settlement data on Employees' Pension Funds and 11 corporate pension plans among Defined Benefit Corporate Pensions among principal life insurers and principal companies principal trust companies. Statistics collection system on To collect survey data on incidence rates including mortality from life 12 incidence rates including insurers and prepare statistical materials. mortality
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Promotion of Initiatives to Ensure Appropriate Business Operation Examination for Life Insurance Claims Assessors The LIAJ has been conducting the "Exam for Life Insurance Claims Assessors" since fiscal 2007. This exam encourages staff who handle claims at life insurers to acquire the basic knowledge and good judgment required by the staff with the aim of fostering such human resources, and maintaining and improving their abilities in the light of securing proper payout practices. Examination for Life Insurance Interviewers When an applicant applies for a contract, whether to accept the contract is determined based on, for example, the declaration form or a doctor's medical examination. As a way of determination, the life insurance interviewer interviews the insured and checks their health. The LIAJ administers qualification exam for interviewers. Development of Measures to prepare for Disasters To fulfill the social mission of the life insurance industry, the LIAJ takes several measures to continue its important business such as payment of insurance benefits, even in extraordinary situations such as a serious disaster or a pandemic of a new strain of influenza. Also, in light of the lessons learnt from the Great East Japan Earthquake, life insurance companies reviewed and improved their countermeasures against disaster as well as their services and business procedures. Life insurance companies reviewed their business continuity plan (BCP) after the earthquake, and is striving to enhance their customer services in ordinary situations. Operation of the Center for Locating Life Insurance Contracts in Disaster Areas The LIAJ is operating the Center for Locating Life Insurance Contracts in Disaster Areas after the Great East Japan Earthquake for those who were struck by disasters in designated disaster areas. Under this search system, all member companies search for relevant insurance contracts for people who struggle to claim insurance benefits because they have lost evidence of their contracts in a disaster or are not sure of their insurance companies. Currently, the scope of this system has been expanded to any cases where people have lost evidence of insurance contracts in an area covered by the Disaster Relief Act. IV) Activities regarding education and training for the staff of member companies Common-to-Industry Educational System for Life Insurance Solicitors Under the laws and regulations, tied sales agents and sales representatives at agencies need to be registered with the FSA to sell life insurance products as life insurance solicitors. The LIAJ administers the "General Course Exam" to check the knowledge, quality and capacity of candidates seeking registration. The LIAJ also administers the "Professional Course Exam", "Advanced Professional Course Exam" and "College Course Exam" in order to satisfy customers' needs more appropriately. In addition, the LIAJ administers the "Variable Life Insurance Sales Qualification Course Exam" for insurance solicitors to acquire knowledge necessary to sell variable life insurance/annuities. The LIAJ reviews and enhances the content of the textbooks for those examinations every year.
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Chart of Common-to-industry Educational System
Orientation (more than 1 day)
Initiation Training for Variable Life Insurance Sales Pre-registration Qualification Exam training (2 days, 10 hours or more) Registration (Min. 8 days, 30 (LIAJ) subjects, 32 hours) Variable Life Insurance Sales Qualification Exam Training for Professional Pass General Course Course Exam Exam (2 days, 12 hours or more) Pass
Professional Registration Course Exam (Regional Finance Advanced College Course Bureau) Pass Professional Exam Course Exam Post-registration Pass Pass training period Life Consultant (Min. 7 days, 15 subjects, 28 hours) Senior Life Total Life Consultant OJT Consultant (1 month after registration)
Purpose and Summary of Each Exam Exam Purpose Description
To gain a basic knowledge on life insurance required by a tied ・Compliance at the time of soliciting insurance General Course sales agent/sales rep at an agency. ・Importance of maintenance and services after sales
To acquire more extensive expertise and related knowledge on ・Knowledge about other financial sectors Professional Course insurance solicitation based on the core knowledge gained in ・Social security and corporate benefit system the General Course.
To cultivate applicable and practical ability and acquire ・Categories of tax and its calculation Advanced comprehensive knowledge essential for financial planning ・Public pension program Professional Course services.
To further acquire life insurance and related knowledge at an ・Financial planning College Course expert level. This course is the highest course in the ・Study on individual / corporate insurance products common-to-industry educational system.
Variable Life To acquire knowledge on the characteristics and mechanisms ・Types of variable life insurance and its mechanism Insurance Sales of variable products. ・Prohibited matters and issues in soliciting variable Qualification products Continuing Education System for Life Insurance Solicitors The LIAJ has a system for continuous education of all life insurance solicitors ("Continuing Education System") once a year in principle so that they can conduct solicitation activities with an emphasis on customer satisfaction and compliance. The LIAJ also conducts follow-up activities every year to enhance the continuing education system.
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Life Insurance Course This course is for staff engaged in the life insurance business, with the aim of imparting the basic knowledge required to work in the life insurance industry. The course consists of eight subjects: "Introduction to Life Insurance", "Life Insurance Actuarial Science", "Risk Selection", "Contractual Provision and Law", "Life Insurance Products and Sales", "Life Insurance Accounting", "Asset Management" and "Life Insurance and Tax Law". The LIAJ publishes the text and operates the exam for each subject. VI) Activities regarding making requests and proposals to relevant authorities, agencies and organizations Requests on Tax Reform Recognizing the current situation the social security system is in, the LIAJ believes it is important that public security and private security fulfill their respective roles to support people's financial security. Pursuing the idea of "double (public and private) pillared financial security", the LIAJ will continue to request expansion of tax deduction and other schemes that encourages self-help efforts toward enhanced private protection scheme. Continued Research on Enhancement of Stock Value for 42 Years The LIAJ has conducted research on the efforts of listed companies and institutional investors regarding the enhancement of stock value for 42 years since fiscal 1974. In the context of the Japan's Corporate Governance Code that entered into force in June 2015, the research focused on dialogue between issuers and shareholders and on corporate governance, giving due consideration to the Japan's Stewardship Code that was introduced in 2014. The LIAJ published its requests to investors as well as to companies from the perspectives of corporate governance, business objectives, and dialogues. The LIAJ hopes that its research will help to enhance stock value as well as revitalize stock markets in the medium- and long-term. Follow-up Activities on Postal Privatization Since the government announced its plans to privatize the nation's postal service in the cabinet's "Basic Policy" and established the government-owned Japan Post in 2003, after continuous discussions on postal privatization within the government, bills of the Postal Service Privatization Act and related acts were passed in 2005. Following this enactment, Japan Post Holdings Co., Ltd. and Japan Post Insurance were established and announced plans to be listed in December 2014. They were successfully listed on the Tokyo Stock Exchange on November 4, 2015. On April 1, 2016, the cap on the amount of additional coverage, which is allowed after four years from the date of conclusion, was raised to 10 million yen from 3 million yen and, as the result, the cap on the amount of total coverage was raised to 20 million yen from 13 million yen. In this context, the LIAJ has continued to express opinions that we can never agree to any increase in the cap on the amount of insurance coverage or any expansion of business scope of Japan Post Insurance without ensuring a level playing field and introducing an appropriate control system. Comments on Global Standards for Insurance Supervision and International Financial Reporting Standards Amid the ongoing globalization of the insurance industry, discussions have been held on developing global standards for insurance supervision at the International Association of Insurance Supervisors and on developing International Financial Reporting Standards for insurance contracts at the International Accounting Standards Board. The LIAJ submits various comments to input to such discussions in order for the standards to appropriately reflect the characteristics of the life insurance business in Japan. Furthermore, in order to strengthen the voice of the insurance industry, the LIAJ is stepping up cooperation with insurance associations in other jurisdictions by joining the Global Federation of Insurance Associations (GFIA) which was established in October 2012.
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Commitment to the Global Federation of Insurance Associations The LIAJ is a founding member of the Global Federation of Insurance Associations, which was established in October 2012 with the aim of increasing effectiveness in providing input and to exchanging information more effectively between insurance associations. The LIAJ will continue to commit to the GFIA effectively to increase industry effectiveness in providing input to international bodies such as the IAIS, and will contribute to further development of the GFIA. About the Global Federation of Insurance Associations (GFIA) The GFIA is a non-profit association established to represent national and regional insurance associations. Currently, its 41 member associations represent insurers and reinsurers in 60 countries that account for around 87% of total insurance premiums worldwide. Conclusion of Memorandum of Understanding (MoU) with Overseas Life Insurance Associations The LIAJ has concluded MoU with Korea Life Insurance Association (KLIA) in July 2015, with the aim of promoting the cooperative relationship and mutual understanding between both associations and to exchange views and information on matters and activities of common interest. VII) Activities to fulfill social responsibilities The Project to Support Working Parents with Small Children - For Further Promotion of Active Participation by Women For further promotion of active participation by women and to address the issue of children on nursery school waiting lists, the LIAJ aims to create an environment where working mothers need not to feel that they are compromising on child rearing. Since fiscal 2014, the LIAJ has subsidized specific projects to increase the facility capacity as well as projects to improve the quality of day nurseries/clubs for after-school activities for children. In fiscal 2015, the LIAJ provided subsidies to 80 facilities, totaling 21 million yen. Subsidy Program for Elderly Support Organizations - Staying Healthy in Old Age Considering the society of accelerated aging of the population, it is of great importance to establish a society where everyone can enrich their life in good health for all time, and to facilitate health promotion so that they can live out their natural life span. The LIAJ has been providing subsidies to private non-profit organizations and groups which engage in activities targeted for the elderly to facilitate health care and health promotion, to promote independence of the elderly and to help them to live a meaningful life since fiscal 2014. The LIAJ decided to provide subsidies to 42 organizations, totaling 5 million yen in fiscal 2015. Activities to Enhance Family Bonds by Reading Picture Books to Children The LIAJ has engaged in "Activities to Enhance Family Bonds by Reading Picture Books to Children" since fiscal 2008 to enhance family bonds. In fiscal 2015, the LIAJ helped to hold the "JPIC* Workshop for the Supporters of Reading Picture Books" and contributed to provision of opportunities for people to spend more time with their families by promoting reading of picture books. In fiscal 2015, the workshops were held in 33 regions and the number of participant was 2,957 in total. The LIAJ encourages the participants to hold sessions for reading picture books to children based on what they learned at the workshops, and provides the set of books for the sessions (22,320 sets were provided in fiscal 2015). * Japan Publishing Industry Foundation for Culture Supporting Education of Care Workers, the Provider of Elderly Care Care workers are expected to play a crucial role in providing elderly care. In order to support them, the "Scholarship Program for Education of Care Workers" has been run for 27 years since fiscal 1989. The recipients of the scholarship in the past are playing leading roles as care workers across the country. In fiscal 2015, the LIAJ provided scholarship of annually 240 thousand yen per person (free of repayment obligation) to 199 students Scholarship Program for International Students in Japan (Seiho Scholarship Program) This scholarship (for two years, free of repayment obligation) has been provided to 355 international students from Southeast Asia and East Asia as an international contribution to assist human exchanges.
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Encouraging Efforts against Environmental Issues with Numerical Targets The life insurance industry is committed to addressing environmental issues by developing the Life Insurance Industry's Action Guidelines for Environmental Issues, the Life insurance Industry's Commitment to a Low Carbon Society, and also by setting a numerical target for reducing electricity consumption as well as sharing information on member companies' efforts. The LIAJ set the reduction targets for fiscal 2020 and from fiscal 2020 until fiscal 2030 in accordance with the "Nippon Keidanren's Commitment to a Low-Carbon Society" and is encouraging active efforts against encouraging issues. The LIAJ also conducts follow-up activities every year to further encourage efforts made by member companies.
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