Life Insurance Services for the Elderlyin the Super-Aged Society- Initiatives to Better Serve the Elderly -June 2013
The Life Insurance Association of Japan

Contents

Introduction

1

1. Recognition of the Surrounding Environment(1) Progress of the Super-Aged Society2(2) Maturation of Life Insurance Policies

4(3) Life Insurance Industry's Response to the Great East Japan Earthquake

5(4) Discussions in the Public-Private Financial Roundtable in Fiscal 20126

2. Past Actions of the LIAJ to Address Challenges for the Elderly(1) Comments received by the LIAJ in Interactive Dialogues on Life Insurance

7(2) Information-sharing on Good Practices by the Secretariat of Consumers' Opinions

9(3) Information-sharing on Good Practices in line with Voluntary Guidelines

9

3. Information-sharing on Good Practices Tailored to the Elderly
3.1 Challenges for the Elderly at the Stage of Policy Management and Good Practices(1) Current Situation Surrounding the Elderly and Life Insurance Policy Services

10(2) Possible Challenges in light of the Current Situation

13(3) Good Practices to Address Challenges for the Elderly at the Stage of Policy Management

17

3.2 Challenges for the Elderly at the Stage of Sale of New Contracts and Good Practices(1) Challenges Identified in light of Consumers' Opinions and Characteristics of the Elderly

21(2) Good Practices to Address the Challenges at the Stage of Sale of New Contracts to the Elderly

22

Conclusions for Better Serving the Elderly(1) Information-sharing/Utilization of Good Practices

25(2) Expectations for Enhancing the Convenience of Related Systems

26

Introduction
Japan is one of the world's fastest aging societies with the highest longevity; both the number of
elderly and life expectancy are increasing.
While the average age of policyholders has been rising in this super-aged society, the needs ofthe elderly diversify, such as for post-retirement security, medical security, long-term care security as
well as death security, and whole life type products with the long-term characteristics have made strong
sales. Under this situation, it is anticipated that customers will be required to conduct further various
procedures regarding their policies.
The Life Insurance Association of Japan (LIAJ) has reviewed the various issues and the role ofthe life insurance industry in today’s aging society, while member companies are also taking innovative
approaches based on the opinions from customers and external experts.
In addition, the life insurance industry as a whole including the LIAJ and its member companies
actively responded after the Great East Japan Earthquake in March 2011, such as simplifying
procedures with the cooperation of stakeholders, checking the safety of customers, and encouraging
insurance claims. As a result, we received a high evaluation from various quarters, and the disaster
reaffirmed the importance of life insurance for all people.
This experience taught us the need to better respond to cases involving difficulties in insurance
related procedures such as policy management and insurance claims, especially for the elderly, while
continuing to build relationships of trust with customers.
This Report clarifies the issues concerning services for the elderly both at the stage of policy
management/payment management, and at the stage of sale of new contracts. It shares the practices ofeach member company according to the characteristics of the elderly, based on lessons learned from
population aging and the earthquake, as well as the discussions on improving financial services in the
aging society in the Public-Private Financial Roundtable, in which the LIAJ participated. The Report also
describes the expectations for a series of systems to enhance convenience and the quality of services
for the elderly based on an analysis of the challenges for the elderly and good practices of member
companies identified in this Report.

11. Recognition of the Surrounding Environment
This Report starts by summarizing the aging of society and projections for the elderly
population, the number of elderly households and the number of elderly with dementia, and also
maturation of life insurance contracts (e.g. aging of policyholders and increase in the number ofpayments). Also, the Report reviews the industry's response to the Great East Japan Earthquake andintroduces the contents of the Report of the Public-Private Financial Roundtable entitled"Improvement of financial services in the aging society."(1) Progress of the Super-Aged Society
a. Changes in the Elderly Population and Future Projections
The number of elderly population (aged 65 or over) stands at 30.79 million, and the ratio of theelderly population to the total is 24.1% as of October 2012, a new high that heralds the super-agedsociety. The ratio of the elderly population is expected to increase, exceeding 30% in 2025 andreaching 40% in 2060 (i.e. one out of every 2.5 persons will be elderly). In addition, the population
aged 75 or over is projected to exceed 20 million in 2025, twice the number in 2005 (Figure 1).
As the elderly population rapidly increases, life insurance companies expect a rapid increase in
the number of insurance claim payments as well as the number of insurance related proceduresfor elderly policyholders.
Figure 1: Population Demographics(ten thousands)

14,00012,00010,000

8,000

6,000

4,000

2,000

0

ActualProjected

(%)

50.0

Total Population
12,806
12,693( Num bers above bars)
12,777
12,66012,557
12,41012,36145.0
12,066
12,105
11,706
11,662
2,287
39.9
39.4
11,212
2,176 2,015
11,1942,596 2,409(18.0%)
10,728 37.7 38.8
40.0
1,849
2,857
10,4671,698
36.1 10,221
3,249
9,921
1,562
3,501
9,708
9,430
33.4
3,578
35.0
1,467 1,386
9,008
9,193
31.6
3,517
7,497
8,674
30.3
1,297
8,411
(59.0%)
29.1
3,432
1,199
1,104 30.0
26.8
3,648
(12.7%)
7,752
3,781
23.0
7,873
6,783
3,883
25.0
6,559 6,278
5,910 5,393
7,089
3,846
4,978
20.2
4,643
7,861
4,368 4,105
20.0
17.4
(47.3%)
7,590
Population aging rate (aged
7,353
14.6
7,056
65~ to the total population)
6,786
15.0
12.1
6,295
10.3
5,650
9.1
5,109
1,407 1,495 1,645 1,600 1,383 1,225 1,128 10.0
7.9
4,646
1,733 1,479(13.0%)
7.1
1,749
4,150
1,517
6.3
5.7
4.9 5.3(11.9%)
1,407
1,301
2,336 5.0
1,109
2,278 2,245 2,223 2,257 2,385 2,401892(26.9%)
1,407 1,646 1,879 2,179
699 776602
1,160(11.1%)
376 434 516
597 717 900
309 338
107 139 164 189 224 284 366 471
0.01950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
Aged 75 or over

Aged 65-74

Aged 20-64

Aged 19 or underSource : For the figures until 2010, “Population Census”, The Ministry of Internal Affairs and Communications
For the figures from 2015, The result of the medium variant projection under “Population Projection for Japan (as of January 2012)”,National Institute of Population and Social Security Research(Note) The total population from 1950 to 2010 includes the population of uncertain age.

Source: Annual Report on the Aging Society in 20122

b. Projection of Elderly Households
The number of households whose head of household is aged 65 or over is expected toincrease as the elderly population increases. Also, among the households whose head ofhousehold is aged 75 or over, the ratio of single-person households exceeds 30% of the total, andis projected to exceed 4 million in 2025 (Figure 2).
The increase in the number of elderly households may result in the absence of agents/proxies
for insurance related procedures. Also, the increase in the number of single-person elderly
households may result in an increase in the number of elderly policyholders whom life insurancecompanies are unable to contact due to address unknown.
Figure 2: Projection of the Number of Elderly Households
Households whose head ofhousehold is aged 65 or over(thousands)
Of which, single-personhouseholds (thousands)
Households
whose
head
of
household is aged 75 or over(thousands)
Of which, single-personhouseholds (thousands)
Ratio

2010

2015

2020

2025

2030

2035

16,20018,887

20,06020,154

20,111

20,215

4,980

6,008

6,679

7,007

7,298

7,622

7,308

8,815

10,231

11,867

12,208

11,736

2,693

3,265

3,820

4,473

4,726

4,660

36.8%

37.0%

37.3%

37.7%

38.7%

39.7%

Note: The projections are for the quarter century from 2010 to 2035 based on the population census conducted in 2010.
Source: Projection of households in Japan (January 2013), National Institute of Population and Social Security Researchc. Projection of Elderly with Dementia
The number of elderly with dementia whose daily life independency level is level 2 or worse is
projected to exceed 3 million in 2012, increasing by 100 thousand persons every year. Level 2 isthe stage at which people have symptoms or difficulties in moving and communicating, struggle toperform daily activities, but are able to remain independent if they receive support from others.
Also, the ratio of the elderly whose daily life independency level is level 2 to the total population is
expected to increase gradually (Figure 3).
There is concern that the increase in the number of elderly with dementia may lead to anincrease in the number of elderly claimants unable to complete the necessary procedures
regarding their policies (e.g. due to their reduced mental capacity).
Figure 3: Projection of Number of Elderly with Dementia
Elderly with dementia whose daily life
independency level is level 2 or worse (million)
Ratio of those elderly to total aged 65 or
over

2010

2012

2015

2020

2025

280

305

345

410

470

9.5%

-

10.2%

11.3%

12.8%

Note: Figures in 2010 are calculated based on the data concerning certification of long-term care need. Data since 2012 are
future projections based on the projection of the number of households in Japan (January 2012), National Institute ofPopulation and Social Security Research.
Source: Briefing paper on the number of elderly with dementia (August 2012), Ministry of Health, Labour and Welfare3(2) Maturation of Life Insurance Policies
With the progress of the super-aged society, the aging of policyholders is also advancing. For
example, in the case of a certain domestic life insurance company, 40% of its existing policyholders
are now aged 65 or over (Figure 4).
Furthermore, regarding individual annuities, over 1 million policies will mature in fiscal 2014,
double the number in fiscal 2012 (Figure 5).
Therefore, the number of elderly policyholders who struggle to perform normal procedures is
expected to increase due to the acceleration of demographic aging and the increase in the number ofpayments for annuity contracts. In addition, insurance policies are rapidly reaching maturity.
Moreover, the ratio of policyholders aged 60 or over has recently started to rise, according to an
analysis of statistics regarding the number of new individual insurance contracts (excluding converted
contracts) by age group (Figure 6).
Figure 4: Ratio of Existing Policyholders by Age Group (Example of a major insurer)
Age of existing policyholders (as of October 2012)
Under 50
Ratio of existing

50's

40.8％

policyholders

60's

20.1％

70's

22.0％

80's

13.4％

Older than 90

3.5％

0.2％

Figure 5: Projected Number of Individual Annuity Contracts Reaching Maturity
FY2012FY2013

FY2014

Projected number (thousands)

489

772

1078

Average of 33 insurers (thousands)

15

23

33

Source: Survey conducted by the LIAJ in November 2012 (Answers submitted by 33 companies)

Figure 6: Changes in Percentage Distribution of Individual Insurance by Age Group of
Policyholders (number of new policies)(fiscal year)

2007

14.8

19.9

24.3

2008

15.5

18.5

23.0

2009

14.9

17.8

2010

15.0

2011

14.4
0%

10%

Aged -19

15.5

13.5

12.0

15.8

13.6

13.6

22.7

16.3

13.4

14.8

16.7

22.1

16.5

13.4

16.3

16.2

21.4

16.7

13.5

17.8

20%
Aged 20-29

30%

40%

50%

60%

Aged 30-39 軸ラベル
Aged 40-49

Source: Life Insurance Fact Book (2012), The Life Insurance Association of Japan

4

70%

80%

Aged 50-5990%
Aged 60-100%

(3) Life Insurance Industry's Response to the Great East Japan Earthquake
In the wake of the Great East Japan Earthquake, the LIAJ determined the fundamental policy of
the industry's actions, stating that "The whole life insurance industry will give utmost consideration to
the affected people to provide them peace of mind as soon as possible." Based on this policy, the life
insurance industry set up a scheme to ensure reliable insurance payouts in addition to providing life
support for the disaster areas and checking the safety of customers.
This experience showed the importance of better responding to cases which could cause
problems concerning policy procedures, especially for the elderly.

Actions of the Life Insurance Industry after the Great East Japan Earthquake
Actions
Specific Approach
1. Providing livelihood✔The LIAJ and member companies offered financial assistance (donations), material
support and relief forsupport (food, clothing, hygiene products, electric appliances, etc.) and physicalaffected persons
support (sending backup staff from headquarters, volunteer activities, etc.) in orderto help those living in the disaster areas.
✔The life insurance industry immediately decided to take several measures for the life
insurance contracts of affected people in order to assist those concerned about theirinsurance payouts and with difficulties in paying insurance premiums, including
non-application of the exemption clause, extension of the grace period for paying
premiums, reduction or exemption of interest, and simple/prompt payment of
insurance benefits (without requiring the documents normally needed).
2. Handling inquiries and ✔The LIAJ and member companies established a consultation scheme to receive
claims procedures
inquiries from customers more easily given the situation of the affected areas where
given thelarge numbers of people were forced to live in evacuation centers after the disastercharacteristics of the(handling of inquiries/claims at call centers of each member company, at the LifedisasterInsurance Consultation Center in the LIAJ and its local branches, as well as at
temporary consultation centers in evacuation centers).
✔The LIAJ established the Center for Searching for Life Insurance Contracts in
Disaster Areas (a search system under which all member companies caninvestigate any relevant insurance contracts for people with no evidence of theirinsurance contracts due to the disaster).
3. Confirming the safety ✔In order to notify customers of the necessary procedures for policy managementof customers
and insurance claims, member companies made various efforts to confirm thesafety of their customers and to secure channels of communication. The LIAJ has
compiled details of such measures taken by member companies so far, and sharedthem among the companies to enhance their services.
4. Multiple publicity✔ The industry has conducted multiple publicity activities to provide necessary
activities for
information to all disaster victims, including visiting evacuation centers throughout
customers
the country.
5. Establishing a✔The LIAJ established an industry-wide database for collecting and sharing among
network to ensure
member companies information which member companies cannot obtain by
payment of insurance
themselves in order to ensure payment of insurance benefits.
benefits✔The LIAJ and member companies cooperated with relevant ministries to ensure
payment of insurance benefits. Member companies can access official family andresident registers, which makes it possible to identify legal heirs and to inform them
promptly about necessary procedures for insurance claims.
✔In order to ensure proper payment of insurance benefits for minors who lost both oftheir parents or guardians in the disaster, the LIAJ established an
information-exchange network with the cooperation of administrative bodies andlocal bar associations, called the "Life Insurance Support Network for Orphaned
Minors".

5(4) Discussions in the Public-Private Financial Roundtable in Fiscal 2012
In September 2012, the FSA held the Public-Private Financial Roundtable as a platform fordetailed discussions and exchanges of opinions, at which representatives of the financial industry
and financial authorities discuss ways to improve and revitalize Japanese financial functions. The
Roundtable set up a task force on "Improvement of financial services in the aging society", and has
exchanged opinions on various perspectives regarding financial products and services
accommodating the needs of the elderly.
The discussions also covered the increasing needs of the elderly, particularly those living alone.
The Roundtable discussed what actions should be taken, including by the LIAJ for compiling thisReport, and actions by the financial industry and relevant authorities for investigating the accessibilityof the Social Security and Tax Number System, which was also mentioned in the Report written by
the task force, "Towards Improving Financial Services in the Aging Society," as follows:

2.3 Needs relating to personal lives: increase in number of elderly people living alone◆The number of elderly people living alone apart from their families is growing. When suchpeople try to use financial services, they often find it difficult not only to obtain necessary
certificates from administrative institutions but also to send identifying information andinformation on their well-being.
◆Financial services essential for daily life need to be made easy for elderly people living alone
to allow them to take reactive stance to some degree during the procedure, especially as thisneed will increase as society ages. One solution is the Social Security and Tax Number
System, which the government intends to establish, for such elderly people.
◆Some participating institutions will take new actions as follows:[Future Action V]
Based on discussions in our task force as well as consumers' opinions, the Life
Insurance Association of Japan will: (i) compile a report which identifies thechallenges and introduces good practices taken by member companies with respect
to procedures and services for elderly people, especially those living alone, and (ii)help member companies to come up with new actions.
[Future Action VI]
To enable people who are deteriorating both physically and mentally, such as elderly
people living alone, to use financial services essential for their lives, relevant financial
industry groups and the Financial Services Agency will investigate, as a medium- andlong-term matter, the possibility of using, with the customers’ consent, the Social
Security and Tax Number System. The study will consider the content of the system
as well as public opinion, if it is established.
(Reference) Public-Private Financial Roundtable, Towards Improving Financial Services in the Aging Society (May 2013)6

2. Past Actions of the LIAJ to Address Challenges for the ElderlyThis chapter explains the past actions which the LIAJ has taken so far to address thechallenges for the elderly. To clarify the background, the chapter also introduces opinions andcomments received by the LIAJ in the past regarding the challenges for the elderly.
(1) Comments Received by the LIAJ in Interactive Dialogues on Life Insurance
The LIAJ holds the "Interactive Dialogues on Life Insurance" in cooperation with consumer
organizations across the country to collect consumers' opinions and promote a proper understandingof the life insurance business (the LIAJ held 100 meetings in fiscal 2012). The LIAJ recognizes theincreasing importance of improving services for the elderly, and has received various comments andrequests regarding such issues (including dementia) during the meetings, such as on providing
adequate services for the elderly, public relations for the (designated) third-party claim scheme, andenhancement of the adult guardianship scheme. Also, the LIAJ periodically feeds back received
opinions and requests to member companies to help them improve their management.

Topic

GeneralService forElderly
regarding
Policy Service

Designated
Third-party
Claim Scheme

Insurance
Claim
ProcedureSpecific comment, request, question
・Comment: A husband may struggle to understand his contract details due toaging, but his wife also cannot understand it only by reading the insurance policy
and its clauses.
・Request: The elderly should be given assistance to follow up their contracts in a
careful and easy-to-understand way.
・Question: Policyholders may forget their contract details or even that they have
one due to its long-term nature. Do insurance companies try to deal with thoserisks, especially for those living alone or elderly with dementia?
・Request: Due to the long-term nature of life insurance contracts, the elderly may
forget the details of their contract which was taken out at a young age.
Therefore, follow-up confirmation on the contract details for the elderly should be
provided.
・Request: Since some people still do not know what the designated third-party
claim scheme is, every policyholder (especially the elderly) should be informed
about this scheme, both new and existing policyholders.
・Request: Sometimes the insured cannot make insurance claims since thepolicyholder did not designate a claim agent, so the designated third-party claim
scheme should be publicized more actively.
・Question: Are there any existing contracts whose policyholder is elderly but has
not designated a claim agent yet? Are insurance companies trying to encourage
those elderly policyholders to designate a claim agent in other ways, such as bypublicizing this scheme in writing (e.g. by sending postcards)?
・Question: How do insurance companies deal with cases where it is difficult toreceive confirmation on contract details or complete claim payments since thepolicyholder, claimant or claim agent is elderly?
・ Question: Are insurance companies considering other ways to complete
insurance claim payments other than appointment of an adult guardian?
・Comment: I have heard that an adult guardian should be appointed to makeinsurance claims in case the beneficiary loses mental capacity due to dementia
for example. However, I think few people are using this scheme even though thenumber of elderly households is increasing.

7TopicSpecific comment, request, question
・Question: Are there any other ways to complete insurance claim payments otherthan the adult guardianship scheme if a beneficiary develops dementia or
becomes bedridden (when a claim agent is not designated)?
・Question: If an elderly person without any relatives (or husband or child) becomes
unconscious after hospitalization or surgery, how can insurance claim payment
procedures be made instead of by the elderly person?
・Question: As instructed by the insurance company, do I have to use the adultguardianship scheme to complete insurance claim procedures of an insurance
contract for my aunt who is single, elderly and has reduced mental capacity?
・Comment: There is an insurance contract in the process of insurance claim
payment for disability benefits, but the insured has no mental capacity and aclaim agent has not been designated. Although the consent of all heirs is
required in order to complete insurance claim payments, it is difficult to obtainsuch consent since one of them cannot be contacted.
・Request: The documents required to complete insurance claim payments should
be reduced, and such documents should be made easier to read andunderstand, especially for the elderly.
・Question: Is there a simpler way to appoint an adult guardian since the current
procedure is complicated and time-consuming if the policyholder suffers
dementia?
・Request: Insurance claim payment procedures other than by appointing an adultguardian should be considered in case the policyholder or beneficiary suffers
dementia.
・Comment: An insurance company told me that the insurance policy should be
Cancellation
cancelled by the policyholder, but I need to cancel an insurance policy of myProcedure
father who suffers dementia.
・Request: Insurance companies should consider better ways to explain matters to
the elderly.
・Request: Insurance companies should be kind and thoughtful toward the elderly,
Solicitation andsince there are great differences in their ability to understand things.
・Request: Insurance companies should consider ways to explain matters simply to
its Structure
the elderly and to avoid the elderly having to do procedures by themselves.
・Question: Do insurance companies set any rules for selling insurance products tothe elderly, as their ability to understand and judge may be impaired?
・Comment: In bancassurance, insurance products have been sold to the elderly
who misunderstood the product as a sort of bank deposit. This misunderstandingis caused because the explanation is made at a bank counter.
・ Comment: Some elderly people sign an insurance contract unintentionallythrough a bank due to insufficient explanation and aggressive sales.
・Question: Investment-type insurance products (e.g. variable insurance) seemdifficult for the elderly to understand. The suitability of products for the elderly
Bancassurance
should be checked, such as by telephone reconfirmation by the manager andconfirmation in writing.
・Request: Banks should carefully check the suitability of products for eachcustomer, such as whether the asset investment period and annuity benefit
payment period are appropriate, and whether the customer has sufficient sparecash.
・Comment: Most elderly people do not understand the risk of loss of principal due
to cancellation before maturity, due to insufficient explanation by banks.
・Request: Some life insurance companies seem too business-like and unkind. The
Attitudecompanies should provide services in a kind and respectful way, especially for
elderly customers.

8(2) Information-sharing on Good Practices by the Secretariat of Consumers' Opinions
With the aim of reflecting consumers' opinions in the management of member companies, the
LIAJ established the Secretariat of Consumers' Opinions in 2006 to collect and analyze informationsuch as on counseling or complaints received at the Life Insurance Consultation Center, as well as
opinions of consumers received at the Interactive Dialogues on Life Insurance and the Arbitration
Advisory Committee.
The Secretariat conducts questionnaire surveys of member companies on themes related tocomplaints, opinions and requests received by the LIAJ. The results of the surveys, namely the goodpractices of member companies, are shared among the companies to help them improve their
management.
In fiscal 2008, the Secretariat conducted a survey of member companies regarding theirinitiatives for the elderly, reflecting the findings of the Commission on Life Insurance (predecessor of
the Interactive Dialogues on Life Insurance) that there were many complaints regarding
bancassurance for the elderly. The Secretariat shared the good practices of member companies,
classifying them into the four stages of policy procedures: "sale of new contracts", "collection ofpremiums", "policy management" and "payment of insurance benefits".
(3) Information-sharing on Good Practices in line with Voluntary Guidelines
In order to ensure appropriate and sound management of the life insurance business, the LIAJ
drew up voluntary guidelines on practice models and considerations as a reference for member
companies and their directors.
To help increase customers’ trust in the life insurance business, the LIAJ conducts
questionnaire surveys annually on measures taken by member companies in line with the voluntary
guidelines since 2007, to encourage the companies to apply the guidelines.
Member companies’ good practices related to the elderly, such as on the sale of insurance
products with market risks, are also shared among the companies.

93. Information-sharing on Good Practices Tailored to the ElderlyThis chapter discusses information-sharing on good practices of member companies related tothe sale of new contracts and policy management tailored to the elderly, based on discussions in"Recognition of the surrounding environment" and "Past actions of the LIAJ to address the challenges
for the elderly" as well as comments from consumers.
The good practices introduced here are not those of all member companies, but the examples
of some companies.

3.1 Challenges for the Elderly at the Stage of Policy Management and Good Practices
This section firstly explains the current situation of services for the elderly at the stage of policy
management and payment management after the conclusion of insurance contracts. It then identifies
challenges for member companies and looks at their initiatives, based on the survey results collectedby the Policy Management Committee of the LIAJ.
(1) Current Situation Surrounding the Elderly and Life Insurance Policy Services
This part examines ideal ways to provide life insurance policy services for the elderly in the
super-aged society and as life insurance policies mature, and looks at the current situation.
a. Characteristics of the Elderly to be Considered When Providing Insurance Services for the Elderly,
and Ideal Way to Provide Insurance Services(i) Characteristics of the Elderly
Generally, the physical and mental conditions of the elderly change due to the ageing process.
They also face changes in family situation and living environment as they go through life’s
stages.
Examples of changes in physical condition include loss of motor function (e.g. bone andmuscle weakness) and loss of sensory function (e.g. decrease in vision or hearing). Examples ofchanges in mental condition include a decline in intellectual capacity, such as cognitive ability.
Many elderly people suffer deterioration of brain function due to diseases of the body andbrain caused by ageing, which may lead to dementia and other ailments. This may make it
difficult for the elderly to cope with policy procedures such as filling out forms andobtaining/preparing the required documents.

10Figure 1. General Characteristics of the Elderly
Acceleration of

Changes in physical and mental

ageinghealthAgeingChanging life stages

Changes in family situation andliving environment(ii) Ideal Way to Provide Life Insurance Policy Services
Generally, life insurance contracts are ultra-long term (i.e. long-term coverage such as wholelife). Another characteristic of insurance procedures is that a stakeholder other than thepolicyholder can be authorized to perform certain procedures, such as can be a claimant ofcertain procedures, such as where an insured makes insurance claim for medical benefits or
where a beneficiary makes insurance claim for death benefits.
Because of these characteristics, life insurance companies are required to enhance customer
services throughout the long period of policy management and payment management, while
recognizing that claimants will experience changes in condition, family situation and living
environment.
b. Current Practices of Member Companies to Provide Life Insurance Policy Services
There is still room for improvement in the current life insurance policy services offered by life
insurance companies, as described above.
In particular, life insurance companies must urgently improve their services for the elderly, suchas by offering secure and prompt insurance procedures and customer services.
I. Services Tailored to the Elderly
In terms of services regarding life insurance contracts, while life insurance companies are
pursuing secure and prompt insurance procedures, insurance procedures (e.g. handling rules)
also need to be improved taking into account elderly-specific conditions such as changes in theircondition and changes in their household or lifestyle. Especially regarding address management,
while it is important for administering insurance policies, life insurance companies basicallyobtain only the address of their policyholders.
Life insurance companies have established their own designated third-party claim scheme(e.g. designated third-party claim riders) which allows designated agents to claim insurance
benefits on behalf of the insured where the insured is a beneficiary but is unable to claim
insurance benefits by themselves. Life insurance companies encourage their existing
policyholders to add this rider to their main contracts, but uptake of this rider varies between
companies. Besides, this scheme only applies to the payment of living needs benefits or otherinsurance benefits, and not to contracts which do not meet the conditions for insurance claims.
Meanwhile, customer notification forms and records exclusively for the elderly are still being
developed.

11II. Procedural Channels
For now, although distribution channels are diversifying, procedural channels for insurance
policy administration procedures and payment procedures are limited mainly to tied sales agentsasface-to-facechannels(customer-passive)

and

to

mailing/callcenter/internet

asnon-face-to-face channels (customer-active).
In order to improve customer services for the elderly in this area, the advantages of eachchannel should be used to provide better services.

Figure 2. Distribution Channel versus Procedural Channel
Procedural Channel

Distribution Channel
Sales Agents
Face-to-Face

Sales Agents
Face-to-Face

Sales Agencies(Sales Agencies)Bank

Mailing

Insurers’ Offices
NonFace-to-Face

NonFace-to-Face

Mail-Order Sales
Internet

Call Center
Internet12

(2) Possible Challenges in light of the Current Situation
This part highlights challenges which life insurance companies are facing regarding insurance
procedures for the elderly. The major challenges are "risks that impede secure and prompt insurance
procedures (procedural risks)", "prevention of procedural risks" and "consumer service tailored to theelderly."a. Risks that Impede Secure and Prompt Insurance Procedures (Procedural Risks)
While life insurance companies strive to conduct secure and prompt insurance procedures,the procedures may be disrupted in the case of elderly customers, making it difficult to
conduct ordinary insurance procedures. This section analyzes the risks that impede secure
and prompt insurance procedures (procedural risks) before or during the procedures fromthree perspectives: "procedures cannot be started", "prolonged procedures" and "increased
number of procedures" all of which result from changes in their condition or in household or
lifestyle of the elderly.
I. Procedures Cannot Be Started
Firstly, in some cases it is impossible to verify the intention of elderly claimants (e.g.
policyholders or beneficiaries) due to changes in their condition with ageing, or impossible to
make contact due to address unknown or where agents/proxies of the procedure are absent,
making it impossible to begin the procedure.
Elderly claimants may experience decline in mental or claim capacity, for example, if theirmental capacity lowers due to dementia, which may disrupt the claiming procedure.
Where it is impossible to make contact and there is no agent/proxy, elderly claimants may
have failed to inform their insurance companies about a change of address in case they moved
several times during the insurance period, or the insurance companies cannot identify theaddresses of all or some of the legal successors named as beneficiaries.
II. Prolonged Procedures
Next, procedures may be prolonged due to the conditions surrounding elderly claimants (e.g.
policyholders and beneficiaries) even if the claimants intend to make a claim. Similar to being
unable to begin the procedures, prolonged procedures can be caused by declining mental
capacity of claimants, and the impossibility of making contact with or absence of agents/proxies
due to changes in household or lifestyle.
Elderly claimants may experience a decline in mental or physical capacity, making it difficult tosign or go out to obtain official certificates.
Meanwhile, it may be impossible to make contact with agents/proxies due to changes in theirhousehold or lifestyle (e.g. elderly claimants living alone).

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III. Increase in Number of Procedures
Finally, the number of payments and procedures will increase substantially in a super-agedsociety.
First, the number of benefit payments will increase as the population ages and morbidity rateincreases, and as policies reach maturity or claimants reach pensionable age. Furthermore,regarding managing policies in force, the number of policy procedures will increase such as due
to changes of address and changes of policyholder after the death of the original policyholder.

Figure 3. Challenges before beginning procedures and during procedures, and factors
During the procedure

Change in Condition
Change in Householdor Lifestyle

Characteristics of Elderly

Challeng
es

Event occurred

Procedure impossible to begin

Prolonged procedure

Increased number ofprocedures

It is impossible to verify theintention of the policyholder orbeneficiary, or to make contact
with either of them as theiraddress is unknown.

Even if the claimant intends tomakea
claim,
policyprocedures may be hinderedbytheenvironment
surrounding the elderly.

Number of payments andprocedures will increase
substantiallyinasuper-aged society

Factor 1: Declining mental/claim capacity of claimants

・Lower mental capacity of the・Difficulty of signing by thepolicyholder or beneficiary(due to dementia, etc.)

policyholderorbeneficiary (due to ageing,etc.)
・ Difficulty in going out toobtain official certificates,etc. (due to ageing,hospitalization, etc.)

Factor 2: Impossibility to make contact/absence of agent/surrogate

・ Impossible to contact thepolicyholder or beneficiary(due to address unknown)
・ Impossible to find thebeneficiary (or any legal heir)

・ Absence of agent/proxy(elderly policyholder living
alone, etc.)

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Factor 3
・ Increase in benefit
payments
・Increased number ofpolicies
reaching
maturity
・ Increase in policy
administration
procedures

b. Prevention of Procedural Risks
Both life insurance companies and policyholders need to try to prevent the procedural risks that
impede prompt and reliable insurance procedures because they do not consider the possibility ofthat procedures may be impossible to begin or may be prolonged during the contract period.

Figure 4: Issues during the contract period
Older
Changes in Family/Living
Environment

Impossible to begin
procedure

Prolonged
procedure(At the occurrence of event to begin theprocedure and during the procedure)

Issues to Prevent
Changes in Physical
Condition

YoungerConclusion ofContract

During the Contract Period

Event occurred

During the Procedure

Life insurance contracts are ultra-long term since policyholders take them out at a young age
and life insurance companies provide various types of long-term cover. Therefore, policyholders will
experience changes in their physical condition and family/living environment, which may cause
procedural risks such as procedures being impossible to begin and prolonged procedures.
As such changes are unavoidable, life insurance companies need to work harder to prevent
procedural risks. Meanwhile, policyholders need to try to avoid unclaimed insurance contracts, forexample, by informing life insurance companies whenever they change address.
The main procedural risks are as follows.
・In general, only the policyholder is familiar with the policy provisions. Hence, it is necessary to
inform family members with the consent of the policyholder of the policy provisions and how tomake an insurance claim.
・Currently, life insurance companies collect the contact address of only policyholders, but theyshould improve address management, including registering multiple addresses.
・Although life insurance companies offer a designated third-party claim scheme which enables
an agent to make a claim on behalf of the insured if the insured cannot do so, this does not
apply to all policies and the scope of the scheme is limited.

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c. Initiatives for Consumer Services Tailored to the Elderly
In addition to procedural risks and their prevention, life insurance companies do not sufficiently
take into account the characteristics of the elderly such as changes in physical condition andfamily/living environment in providing life insurance services for the elderly.
We have also received opinions and requests from customers regarding services for the elderly
during interactive dialogues on life insurance.
It is necessary to enhance customer services for the elderly and the hospitality of life insurancecompanies in order to eliminate anxiety and implement prompt insurance procedures without fail.
The main issues regarding customer services for the elderly are as follows:・Forms for policy procedures are unintelligible or illegible.
・Continued efforts are needed to improve financial literacy (including life insurance) of theelderly.
・Life insurance companies are required to offer more respectful, tailored customer services forthe elderly.

16(3) Good Practices to Address Challenges for the Elderly at the Stage of Policy Management
The LIAJ's Operation Management Committee carried out a questionnaire survey of member
companies regarding their initiatives in providing customer services for the elderly in policy
management and payment management, collected those good practices, and shared them among all
member companies. This section summarizes the survey results and model examples by category ofissues.
a. Concept of Categorizing Good Practices of Member Companies
Taking into account "(2) Possible Challenges in light of the Current Situation" in this chapter, wecategorize the good practices of each member company into three types by issue to beaddressed: "secure and prompt policy procedures", "prevention of procedural risks" and "customer
services tailored to the elderly." In addition, we categorize practices by types of channel into
face-to-face, non-face-to-face, or both of them, taking into account the nature of each channel.

Issue

Category

Elements▪

Initiatives to Address
the Decline in
Mental/Claim Capacityof Claimants

Secure and Prompt
Procedures▪
▪

▪
Initiatives to Address
Impossibility of Making
Contact, Absence ofAgent/proxy▪
▪

Initiatives to Address
the Increase in Numberof Procedures
Prevention ofProcedural Risks

Customer Services
Tailored to the Elderly▪
▪

Lower mental capacity of policyholders or
beneficiaries (due to dementia, etc.)
Difficulty in signing by policyholders or
beneficiaries (due to ageing, disability, etc.)
Difficulty in going out to obtain official
certificates,
etc.
(due
to
ageing,hospitalization, etc.)
Impossibility of contacting policyholders or
beneficiaries (due to address unknown)
Impossibility of finding beneficiaries (legal
heir)
Absence of agent/proxy (elderly policyholder
living alone, etc.)
Increase in benefit payments
Increase in policies reaching maturity

Continuous informing activities to the elderly and their family members about
their policy provisions and its payment procedure
Simplification of paperwork
Sophistication of services for the elderly and enhancement of hospitality17

b. Examples of Good Practices to Ensure Secure and Prompt Policy Procedures
I. To Address the Decline in Mental/Claim Capacity of Claimants
Item▪ Lower mental
capacity ofpolicyholders or
beneficiaries (due todementia, etc.)

Initiative (□All, ■Face-to-Face, ●Non-Face-to-Face)
Encourage appointment of an adult guardian to make a claim.



Develop and implement procedural rules to accept a claim by any heir
even if adult guardianship is not applicable when it is verified that aclaimant has reduced mental capacity.
Revise procedural rules overall to develop new “conditional rules”
applicable to the elderly and policyholders who struggle with policy
procedures, which are only for internal use.

▪ Difficulty in signingby policyholders or
beneficiaries (due toageing, disability,etc.)

Allow an agent to fill out claim forms on behalf of a claimant where it isverified that the claimant intends to make a claim. (Eligible persons foran agent are limited to a family member living in the same household
or a relative within the third degree of kinship. In principle, any
payment can only be made to an account held by a beneficiary.)
Develop new procedural rules to abolish the requirement regarding
submission of insurance policy certificate or submission of seal
registration certificate for the verification of intention.

▪ Difficulty in going out
to obtain official
certificates, etc. (dueto ageing,hospitalization, etc.)

Skip the submission of claim forms and identification documents whena customer ID or password can be used to identify policyholders (input
on the Internet or by PDA).

The head office, heads of the area offices or officers of branch offices
may obtain a resident card, copy or extract of family register, seal
registration certificates, etc. on behalf of, and with the authorization of,a customer.

Regarding confirming existence at the time of annuity payment after
the elapse of the guaranteed period, a sales agent may confirm theexistence of a beneficiary in addition to requiring them to submit acurrent state report/a resident card and to visit the office.

For certain types of procedure, consider accepting an insurance claim
over the phone without having the consumer fill out certain forms.

II. To Address the Impossibility of Making Contact/Absence of Agent/Proxy
Item▪ Impossibility ofcontacting
policyholders or
beneficiaries (due toaddress unknown)

Initiative (□All, ■Face-to-Face, ●Non-Face-to-Face)
Remind the policyholder of policy provisions (including those regarding
information on beneficiaries) by annual or quarterly newsletter,
booklet, etc. Take measures to identify the correct contact address(obtaining resident card, investigation by external institutions, etc.) if
the notice from insurance companies fails to reach a policyholder.
Introduce a “family registration system” to list any family members towhom the same information on policy provisions can be provided as
was disclosed to the policyholder. [Also falls under section c:
Examples of good practices to prevent procedural risks]18▪ Impossibility offinding beneficiaries(or any legal heir)For elderly policyholders over a certain age, promote the collection ofcontact information on beneficiaries, family members, etc. as well ason the policyholder (and confirmation of existence) through home
visits. [Also falls under section c: Initiatives to prevent procedural risks]With the consent of the policyholder through periodical confirmation ofpolicy provisions, etc. by a sales agent, make direct contact with thebeneficiary to confirm his/her existence and notify that he/she isdesignated as a beneficiary of an insurance contract.
Where a customer expresses the intention to make a claim, act on acase-by-case basis depending on the condition of the customer (e.g.
allow a third-party claim by an unrelated homecare worker, institutional
worker, social worker, etc.).

▪ Absence ofagent/proxy (elderly
policyholder living
alone, etc.)

Recommend adding designated third-party claim riders to their main
contracts at regular visits by sales agents. [Also falls under section c:
Examples of good practices to prevent procedural risks]III. To address the increase in number of procedures
Item

Initiative (□All, ■Face-to-Face, ●Non-Face-to-Face)▪ Increase in benefit
payments

Sequentially develop systems to enhance the efficiency andsophistication of the examination process on insurance claims (e.g.
introduction of automatic payment through computerized
examination).

▪ Increase in policies
reaching maturity

Improve the efficiency of the payment process by automating moneytransfers or simplifying paperwork under certain conditions.
Encourage the giving of a 1-year notice of maturity through outboundcalls and letters.

c. Examples of Good Practices to Prevent Procedural Risks
Item

Initiative (□All, ■Face-to-Face, ●Non-Face-to-Face)▪ Continuous activities
to inform policy
provisions andpayment procedure
to the elderly andfamily members

Identify any address change through home visits, etc. andcollect/record information on mobile phone numbers, as well as
fixed-line phone numbers.
At the beginning of the contract period, regularly remind thepolicyholder through various communication tools to tell his/her
beneficiary or family members about the insurance policy.
Prepare a special form to encourage customers to notify a change ofaddress, and distribute it as necessary during policy procedures.
Add text to encourage customers to notify a change of address on theenvelope used for annual or quarterly communications/booklets, life
insurance deduction certificates or insurance policies sent topolicyholders.
In addition to the periodical follow-up through sales channels, consider
conducting follow-up by the Head Office for elderly policyholders andthe insured, including checking the existence and claim procedures.

Collect family information at the beginning, and provide tools giving

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information to be shared among family members through regular home
visits.


Require registration of e-mail address for policyholders and request
them to confirm their registered address several times before sending
the deduction certificate.

d. Examples of Good Practices for Consumer Services Tailored to the Elderly
Item

Initiative (□All, ■Face-to-Face, ●Non-Face-to-Face)Use color, make forms larger, use larger fonts and adopt universal
design.

▪ Simplification of
paperwork

Revise various claim forms into electronic forms to introduce
electronics sales terminals which enable text to be displayed larger on
the screen.
Introduce and use tailor-made claim forms (with preprinted
requirements).
Prepare and distribute booklets describing the flow of claim
procedures, concrete examples on whether to make payments or not,and the intended use (necessity) of official certificates.
Develop a network of internally-accredited “elderly care advisers”
through in-house training courses.

▪ Sophistication ofservices for theelderly andenhancement of
hospitality

Participate in the training of “dementia patient supporters” promoted by
the MHLW and organize awareness-raising seminars on careprevention.
Consider introducing a guardian referral service by judicial scriveners.
Consider sending information booklets for the elderly (with anappropriate amount of text in larger fonts) as ordinary annual
notices/booklets on policy provisions and corporate initiatives which
are sent to policyholders.
Promote kinder customer services especially for the elderly, bymarking or sticky notes on necessary forms, and by speaking slowly
and carefully, for example.
When receiving applications at the call center from the elderly who areconcerned about how to complete procedures, follow up theirprocedures appropriately by calling them after sending the required
forms.



When receiving calls from the elderly at the call center, offer tailoredcustomer services such as adjusting the volume on the microphone orby speaking slowly during the conversation.

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3.2 Challenges for the Elderly at the Stage of Sale of New Contracts and Good Practices
As explained in Chapter 1 of this Report, the proportion of elderly policyholders has been
increasing recently due to demographic changes as shown in Figure 6. In fiscal 2012, the Secretariat ofConsumers' Opinions at the LIAJ analyzed complaints, opinions and requests from stakeholders basedon the progress of ageing society as follows:

▪
▪
▪
▪

Many comments and requests regarding customer services for the elderly were received during
the Interactive Dialogues on Life Insurance.
The Arbitration Advisory Committee pointed out the issues on solicitation for the elderly in termsof bancassurance.
The top two complaints received from the elderly by the Life Insurance Consultation Center in the
LIAJ are related to troubles during the sale of new contracts.
The National Consumer Affairs Center of Japan published a report on the troubles regarding
solicitation of single premium whole life insurance at bank counters, and pointed out the concerns
on insurance solicitation related to bancassurance for the elderly.

The Secretariat of Consumers' Opinions picked up the "Issues on the Elderly (at the stage ofsale of new contracts)" as the main subject for discussion in fiscal 2012, and shared good examples ofmember companies to address those issues in cooperation with the Operation Management Committeeof the LIAJ.
(1) Challenges Identified in light of Consumers' Opinions and Characteristics of the Elderly

With respect to the sale of new insurance contracts to the elderly, the Secretariat ofConsumers' Opinions received comments and complaints pointing out that elderly customers do not
sufficiently understand their contracts (e.g. in bancassurance, some customers do not recognize theproduct as a life insurance contract, and the sales agent does not explain the disadvantages andrisks of the product they recommend), as well as that products do not meet the customers' needs or
intentions. To address these complaints and comments, since some elderly people cannot easily
remember, understand and make appropriate decisions due to ageing, clearer explanations are
essential for the elderly before concluding a new insurance contract.
Also, as the elderly face changing family situations and living environments (e.g. living alone)as they go through life’s stages, it is difficult for insurance companies to deal with elderly people living
alone and elderly households who do not have anybody nearby to ask for advice or support.
Moreover, it is essential to enhance customer services tailored to the elderly not only at thestage of policy management of existing customers but also at the stage of sale of new contracts,
since the Secretariat of Consumers' Opinions has received complaints and comments that insurancecompanies do not consider how best to serve the elderly when selling new contracts.

21(2) Good Practices to Address the Challenges at the Stage of Sale of New Contracts to the Elderlya. Concept of Categorizing Good Practices of Member Companies
This part outlines good examples of member companies which were collected through aquestionnaire survey conducted by the Secretariat of Consumers' Opinions to identify issues
concerning the elderly (at the stage of sale of new contracts), and were shared among themember companies.
Taking into account the situations surrounding the elderly as described in "(1) Challenges
Identified in light of Consumers' Opinions and the Characteristics of the Elderly" of this section, wecategorize these good practices into three types by issue to be addressed: "1. Ensuring sufficient
explanation at solicitation", "2. Dealing with elderly people living alone/elderly households" and "3.
Customer services tailored to the elderly". Regarding 1, we further divide the contents into three:"Sales approach and procedures", "Follow-up before completing necessary procedures" and"Revision and improvement of solicitation materials".

Issue
I. Ensuring sufficient
explanation at
solicitation

II. Dealing with elderly
people living
alone/elderly
households
III. Customer services
tailored to the elderly

Category

Elements (Request and Complaints)▪ Sales approach andnecessary procedures▪ Follow-up before
completing necessary
procedures▪ Revision and improvementof solicitation materials▪ Solicitation to elderly
people living alone▪ Guidance and training forsolicitors (sales agents)

22▪ Insufficient customer understanding (forexample, with bancassurance, customers
do not recognize the product as a life
insurance contract, and sales agents do
not explain the disadvantages and risks ofthe product they recommend.)▪ Not meeting customers' needs/intentions▪ Absence of family members who support
the elderly customer (persons who cangive advice or support them)▪ Insufficient consideration for the elderly

b. Examples of Good Practices at the Stage of Sale of New Contracts to the Elderly
Regarding good practices by certain distribution channels, we identify the types of channel
below.

I. Ensuring Sufficient Explanation at Solicitation
Item

Initiative (■Face-to-Face, ●Non-Face-to-Face)
If a policyholder is aged 70 or over, conduct interviews several times,
and do not accept the application until the day after delivering the"pre-contract documents" (including the Policy Overview and Warning
Information) to give the elderly sufficient time to consider whether toapply or not.
A manager of the sales agent also engages in sales procedures fromthe stage of product design regarding solicitations for the elderly.
A different staff from the sales agent reviews/checks the contents of
new insurance policies before the policies enter into effect. Interview a
policyholder who is aged 70 or over on another day to check his/her
intention.

▪ Sales approach andnecessary
procedures▪ Follow-up before
completing necessary
procedures▪ Revision andimprovement ofsolicitation materials

In addition to the existing "Important Information," prepare anddistribute supporting materials describing important matters in an easy
way for elderly people to understand. Put a toll-free phone number inthe supporting materials for elderly consumers. [insurance agency]
Provide explanatory fliers when a family member or relative
accompanies an elderly person at the time of explanation.
When sending the policy to a policyholder, attach explanatory sheets
for family members, and encourage them to display those sheets at avisible place in their house. [mail-order sales or internet sales]
Create a special plastic folder for storing copies of the application,
confirmation sheet and other forms, with "This is a life insurance
product underwritten by XXX Life Insurance Company" marked on the
cover. [Bancassurance]
Clearly describe the surrender value calculation in the summary ofpolicy provisions, showing the actual possible loss of principal.
[Bancassurance]
On the last page of the "Intent/Suitability Confirmation Form," present
the "checklist before application," accompanied by a list with a color
cartoon warning of possible complaints entitled "Examples of
Post-Contract Complaints", to check whether the product really meets
their needs.

II. Dealing with elderly people living alone/elderly households
Item▪

Solicitation toelderly people
living alone/elderly
households

Initiative (■Face-to-Face, ●Non-Face-to-Face)
Regarding solicitation by a sales agent, a manager accompanies theagent to provide explanations, or calls the policyholder to check
whether the policyholder understands the policy provisions and points
to consider.
For an elderly customer whose relatives cannot accompany him/her at
the time of application, an expert staff designated by the company
accompanies the customer to check their understanding, intention, andcondition.

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III. Customer Services Tailored to the Elderly
Item▪

Guidance andtraining forsolicitors (sales
agents)

Initiative (■Face-to-Face, ●Non-Face-to-Face)
Prepare a booklet outlining the "standard treatment of new business,"
including a section on "how to accommodate the needs of elderly
consumers", presenting actual examples of complaints, explanations
and ideal behavior.
Encourage banks to hold study sessions at the branch level andpersonal lectures for bank employees, using training materials
developed for agencies including topics on communication gaps.
[Bancassurance]
Identify measures taken by a bank as an insurance agency to ensure
careful service for the elderly during a bank audit, and provide feedback
to the bank. [Bancassurance]

24Conclusions for Better Serving the Elderly
We have explained the issues concerning services for the elderly and good practices ofmember companies, both at the stage of policy management/payment management and at the stage ofsale of new contracts, while introducing the past actions of the LIAJ for serving elderly customers andthe opinions and requests from external stakeholders regarding such issues.
First of all, life insurance companies must make ongoing efforts to enhance their services forthe elderly by sharing and utilizing the good practices of member companies to address issues regarding"secure and prompt procedures" and "prevention of procedural risks" at the stage of policy
management/payment management, and issues regarding "ensuring sufficient explanation at
solicitation" and "dealing with elderly people living alone/elderly households", as well as issues regarding"customer services tailored to the elderly" at both stages.
In addition, it is necessary to develop and improve systems to enhance services for the elderly
by cooperating with the public sector as society ages, in order to enable the elderly to use life insurance
services without anxiety.
(1) Information-sharing/Utilization of Good Practices

The life insurance industry needs to enhance its services for elderly customers by sharing andutilizing the good practices of the LIAJ's member companies in order to provide adequate services forcustomers amid the super-aged society.
The challenges and good practices of each member company discussed in Chapter 3,
particularly items common to both "face-to-face" channels and "non-face-to-face" channels, will help
member companies when considering initiatives for services for the elderly in line with their policies
regarding management and services.
For life insurance companies, secure and prompt payment of insurance claims and benefits istheir primary business. Accordingly, life insurance companies should enhance services for the elderly,
especially at the stage of policy management, by incorporating the good practices of member
companies outlined in this report into their business practices through sharing and utilizing issues thathave been addressed and good practices related to services for the elderly, thus enhancing the socialrole of the life insurance business.
Also, we believe that life insurance companies should continue efforts to enhance their services
for the elderly based on the discussions in this report, thus enabling the life insurance industry toaccumulate experience and pursue new good practices in the future.

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(2) Expectations for Enhancing the Convenience of Related Systems

a. Utilization of the Social Security and Tax Number System in the Private Sector
In addition to efforts by life insurance companies, support from the government (e.g. theestablishment of new systems and operation of related systems) is also essential to enhance ourservices for the elderly.
The LIAJ published the report "Utilization and application of information and communication
technology (ICT) through the social security and taxation number system in life insurance
business" in June 2011, and requested that the private sector be allowed to use the social security
and tax number system.
Currently, there are various public numbering systems such as the basic pension number which
is necessary to receive public pension benefits, and the resident register code number, but thoseare managed separately. A new identification numbering system would enable administrative
bodies, both the national government and local governments, to track each person's payments ofincome tax and public pension premiums as well as their benefits received from public services,thus preventing failure to pay social security benefits and collect taxes. Such a system would also
simplify administrative procedures for the public.
If the life insurance companies could use even part of the network system under this new
identification numbering system with the consent of their customers, which contains attributeinformation on them, the life insurance companies would be able to promptly notify beneficiaries of
insurance claim procedures upon confirming the death of insured customers throughcrosschecking with administrative information, such as when the insured deceased person was anelderly person living alone. Furthermore, even when both the policyholder and original
beneficiaries die, life insurance companies could promptly notify other possible claimants ofnecessary procedures to change the policyholder and beneficiaries by checking the administrative
information and obtaining information about those possible claimants and their addresses.
In addition, the annuitants of whole life annuity contracts are currently required to submit areport on their current status with the mayor's seal after the guarantee period under current
practice. By allowing the private sector to use the identification numbering system, it would reducethe burden on customers in completing necessary procedures, including visiting government
offices and sending documents to the insurance company.
As noted above, the identification numbering system would enable insurance companies toproceed with important procedures promptly without fail, thus increasing convenience for theircustomers. Therefore, we sincerely hope that the private sector will be allowed to use this system
to improve customer services for the elderly.

26Simplification of Application Procedures for a Copy of Residence Registers
With the coming super-aged society, the number of cases where elderly customers
struggle to submit a copy of their residence registers promptly for insurance-related
procedures due to their physical condition is likely to increase. After the Great East Japan
Earthquake, the life insurance companies asked local government offices to disclose
residence registers to them on behalf of their customers who faced various difficulties, andthe request was accepted. As a result, the industry was able to successfully makeappropriate insurance payouts. The LIAJ believes that such measures could be broadened
to various other services of life insurance companies taking into account the characteristics
of elderly customers. Therefore, the LIAJ requests that the procedure of applying for a copyof residence certificates be simplified, before allowing the social security and tax number
system to be used by the private sector.
In particular, currently, if a life insurance company does not have the latest address of acustomer and fails to send important notifications to the person, the company is allowed torequest the local government to issue a copy of the residence register in order to fulfill theobligation under the insurance contract. However, there is no single common standard
among local governments with respect to the documents necessary for the application.
Accordingly, the LIAJ urges local governments to standardize and clarify theiradministrative procedures in order to speed up the procedure of applying for a copy ofresidence registers by life insurance companies, especially as the number of insurance
claims and the number of insurance contracts reaching maturity are increasing. In our view,
this would enable local government offices and life insurers to streamline theiradministrative procedures. For example, life insurers could send important notifications tocustomers in a timely manner, which would reduce the time and burden of negotiations
between local government offices and life insurance companies.

b. Promotion of Adult Guardianship System
Due to the nature of life insurance contracts, there are many stakeholders who could bepossible claimants, including not only policyholders but also the insured and beneficiaries, such as
when a policyholder changes the name of the insurance contract, when an insured claims living
benefits, and when a beneficiary claims death benefits.
In order to facilitate prompt insurance procedures without fail, life insurance companies arepromoting the use of the third-party claim scheme for cases where the claimant does not have themental or physical capacity to complete various procedures for the insurance contract, such as
signing or going out.
However, the scope of the third-party claim scheme is currently limited to the insurance claimsof insurance contracts whose insured is named as the beneficiary. Therefore, in the case of27

procedures which a policyholder or beneficiaries need to complete or in the case where there is no
agent or proxy of the claimant (e.g. the insured), life insurance companies often inform thecustomers of the adult guardianship system at the outset.
Given the increase in the number of elderly people with dementia or living alone, the number ofcases where the claimant has reduced mental or physical capacity or where there is no agent or
proxy of the claimant is expected to increase. The LIAJ wishes to encourage the use of the adultguardianship scheme, including by simplifying application procedures and other improvements, inorder to ensure the legal stability of insurance procedures.

xxx

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