The GIAJ is now working hard to realise a healthy competitive environment and to improve the quality of business operations, according to Mr Hiroaki Shirota, chairman of the association.
Mr Shirota, who was appointed GIAJ chairman on 28 June, made these remarks in a statement on 19 September. He outlined the work done by the GIAJ since he made his first statement in June 2024 soon after he was appointed chairman.
Initiatives to restore trust
A study is undertaken based on a report by an expert panel on structural issues and competition in the non-life insurance sector. The study is led by the project team for the promotion of fundamental business reform, which was established within the GIAJ in March.
1. Realising a healthy competitive environment
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a. Establishment of guidelines for business-related equities
The GIAJ formulated and released on 19 September its Guidelines for Business Related Equities to further encourage appropriate and disciplined industry-wide actions.
The guidelines sketch out basic principles such as not holding new business-related equities, striving to reduce the balance of these equities early, and not reclassifying them as for pure investment purposes without an actual change in the purpose of holding them.
b. Establishment of guidelines for secondment of employees from general insurance companies
To prevent secondment in a manner that may impede customers' appropriate selection of insurance products and the independence of insurance agents, the GIAJ has established and announced guidelines for the secondment of employees from general insurance companies on 19 September. These Guidelines outline requirements such as the purpose of the secondment, duties and the authority in charge, the number of employees on secondment, duration of secondment, and contributions placed for secondment, as well as the basic concept regarding the establishment of a supervisory department to confirm whether these requirements are met.
In addition, in light of the recent cases of information leakage by secondees, the Guidelines clearly state the importance of compliance with the Act on the Protection of Personal Information and other related laws and regulations. Taking into account future revisions of supervisory guidelines and other developments, the GIAJ will carry out further reviews.
c. Formulation of an addendum for the Compliance Guide for Solicitation
To present the GIAJ’s basic position on “improper provision of convenience” to the industry at an early stage, the GIAJ has developed an addendum to the Compliance Guide for Solicitation, which was disseminated to members on 25 July.
To eliminate variations in the interpretation of “improper provision of convenience” among member companies, the GIAJ has started to formulate guidelines that provide more detailed examples. In addition, it is considering establishing a whistleblowing system within the association for member company employees to use to increase effectiveness.
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2. Improving the business quality of insurance agents and solicitors
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a. Study on introducing agency business quality evaluation criteria and operating systems
To ensure the business quality of insurance agents and solicitors, the GIAJ has established a “Third-Party Study Group on Evaluation of Agency Business Quality” to study industry-wide agency business quality evaluation standards that incorporate third-party perspectives and systems to apply the standards effectively. The first meeting is scheduled to be held on 25 September, with a university professor, lawyers, and consumer groups as members of the study group, and the Financial Services Agency and the Independent Insurance Agents of Japan as observers.
b. Fostering a common understanding of the basic concept of the agency commission scheme
In light of the points raised in the FSA's expert panel report on the agency commission points system, the GIAJ board meeting held on 19 September confirmed the following fundamental principles: From the perspective of promoting customer-centric business operations, the agent commission point system will prioritise "the quality of agents' operations" that contribute to improving services for customers, rather than focusing solely on "scale and revenue growth".
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3. Deepening corporate business customers’ understanding towards insurance and risk management
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On 22 July, the GIAJ released “Risk Management and General Insurance”, a brochure prepared with the aim of providing client companies with basic information on the necessity of risk management, the roles of general insurance, and the principles of insurance, which would be a prerequisite knowledge when considering insurance products and services.
As part of such ongoing information sharing with client companies to improve their risk management capabilities, the GIAJ will widely provide details on the study courses conducted by the General Insurance Institute of Japan.
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4. Strengthening measures against fraudulent claims
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a. Creation of a Guidance on recording images of damaged vehicles for automobile repair shops
The GIAJ has created a Guidance for automobile repair shops, explaining how to record images of damaged vehicles. It will be distributed to automobile repair shops to help them maintain proper records.
b. Revision of whistle-blower system within the industry
To further raise awareness of the need to correct wrongdoings in the industry, the GIAJ has made partial revisions to the existing whistleblower system. The revisions clarify and reaffirm the GIAJ's position as a whistle-blowing contact, to which any employee of member companies, agents, etc. can directly and anonymously report fraudulent claims, suspicious matters related to auto repairs, and any other issue.
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