August 1, 2008
Submission of Business Improvement Plan

The Dai-ichi Mutual Life Insurance Company (the “Company”; President: Katsutoshi
Saito) today submitted its business improvement plan to the Financial Services Agency
(FSA) in accordance with the administrative order (Business Improvement Order) of July
3, 2008. We deeply apologize to our customers as well as our stakeholders for the
inconvenience and concern regarding our payment operations, the core of our life
insurance business.

On receiving the order, the Company established the “Headquarters for Business
Improvement Promotion” (the “Headquarters”) on July 3, 2008, consisting of all
operating officers of the Company, in order to proceed with the business improvement
plan on a company-wide basis. Hereafter, the Headquarters will proactively promote the
plan, monitor its effectiveness and readjust it as necessary by promoting the concept of
the “PDCA” (plan-do-check-action) cycle from our customers’ perspective for
continuous improvement of the Company’s business.

Taking the administrative order with utmost seriousness, all of the directors, officers and
employees of the Company share the recognition that the role of an insurance company is
fulfilled when a claim payment is completed. We will strive to implement the business
improvement plan to prevent a recurrence of insufficient payment issues, and we will
work to restore the public’s trust.

Summary of the business improvement plan is as follows:

I ．Summary of the Business Improvement Plan

1.

Improvement and Reinforcement of Governance Structure
i)

Establishment of the “Headquarters for Business Improvement Promotion” and
Reinforcement of internal system to monitor the effectiveness of the plan (July 2008) •

The Company established the “Headquarters for Business Improvement
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Promotion” on July 3, 2008 in order to proceed with the business improvement
plan on a company-wide basis.
•

The Headquarters consists of all operating officers of the Company, in order to
promote proactive and unified management participation, and is responsible for
promoting the business improvement plan.
•

In an effort to achieve continuous improvement, the Headquarters promotes the
concept of the PDCA cycle, monitors the status and effectiveness of the
Company’s business improvement plan and readjusts the plan as necessary, taking
into consideration reports from the Company’s claims examination, internal
auditing, and other relevant departments.
•

The Headquarters intends to utilize a Deliberation Committee for Claims Payment
as a consultative body in order to monitor and assess the effectiveness of the plan
from a third-party perspective.
•

The Company plans to disclose its progress on the plan periodically.

ii)

Clarification under medium-term management plan (July 2008) •

The Company prioritized implementation of the “Declaration of Quality
Assurance”
(1)
and productivity improvement associated with the implementation
of its medium-term management plan for fiscal year 2008 to 2010 (to be disclosed
in mid-August 2008). Specifically, the Company commits itself to completing the
business improvement plan, enhancing effectiveness of the plan, and promoting
the PDCA cycle.
•

In its medium-term management plan, the Company pledged such items as
reinforcement of the processes relating to receipt of claims, development of claims
examination information systems, and maintenance of the effectiveness of the
plan.
(1) In September 2006, the Company formulated and announced the “Declaration of Quality
Assurance”, the embodiment of the management concept of “Policyholder First”, which has been
the philosophy of the Company since its foundation.

iii)

Further specification, schematization and familiarization of the “Declaration of
Quality Assurance” (September 2006) •

To realize the “Declaration of Quality Assurance”, the Company will specify and
schematize each article of the declaration to achieve “the required quality” (the
ideal model that customers expect). Also, the Company will strive to familiarize its
directors, officers and employees with the specified and schematized declaration.

2.

Improvement and Reinforcement of Internal Audit Structure
i)

Change in officer structure (September 2008) •

To strengthen the Company’s internal controls and clarify monitoring functions,

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officers responsible for internal auditing departments of the Company will not take
charge of audited departments but will instead take charge of its internal control
departments.

ii) Reinforcement of internal audits by Internal Control and Auditing Department
•

The Company will set up a new division to monitor claims payment systems and
allocate employees with claims examining experience to this division in
September 2008 to strengthen the effectiveness of the business improvement plan.
•

In addition to periodic internal audits already conducted, the Company will
implement organization-wide theme-specific internal audits of product
development management from the second half of fiscal year 2008.
•

In order to check the effectiveness of the audits of its claims payment departments,
from August 2008 the Company will reinforce its system for monitoring the
Underwriting Management Center responsible for claims re-examination.

iii) Reinforcement of monitoring functions assigned to Underwriting Management Center
(October 2008) •

The Underwriting Management Center, whose main role has been to investigate
the Company’s past insufficient payments, will additionally take charge of
self-inspection and will re-examine daily claims payments.
•

The Company has conducted and utilized customer surveys since fiscal year 2007
to improve its claims payment operations. The result of the surveys will be
reported to the Deliberation Committee for Claims Payment to reinforce its checks
against the claims payment departments and to improve the operation of the
Company from the customers’ perspective.
3.

Readjustment and Improvement of Preventive Measures
1)

Communication with policyholders
i)

More provision of policy-specific information to each policyholder •

In January 2009, the Company intends to revise the “Pamphlet on Payment of
Claims & Benefits” that it sends to each policyholder, in order to reflect the results
of its customer surveys.
•

The Company started providing a customized list of payment conditions for each
customer in May 2008.
•

In August 2008, the Company will add to the “Total Life Plan Report” annually
sent to each policyholder additional items such as a customized list of events being
covered and payment conditions for each customer.

ii) Information provision using the Company’s website (August 2008)
•

In order to provide necessary information to customers when they need it, the

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Company will supply a web-based “Total Life Plan Report” to each policyholder.

iii) Encouragement to submit a claim 120 days after hospital discharge (October 2007)
•

The Company sends claimants for hospitalization payments a guide 120 days after
their hospital discharge to confirm whether they need to submit a claim for their
hospital visit. The Company will continue to improve, among others, language in
its documentation encouraging claims from customers’ perspective.

iv) Additional information on “Description of Claims Payments” (currently in practice)
•

The “Description of Claims Payments” includes language encouraging claimants
to confirm that they are not overlooking any potential claims.
•

The Company will improve the quality of information sent to policyholders to
encourage them to make claims, taking into consideration consumers’ opinions.

2)

Claims Payments

i)

Reinforcement of accuracy of claims receipts (currently in practice) •

To properly understand information included in customers’ claims and to
encourage them not to overlook any potential claims, the Company is revising its
internal forms to process claims received and has sent all its unit offices outlines to
check the forms. The Company will continue to improve its operation accuracy on
claims receipts by improving its internal forms as well as the inspection systems in
its branch offices.
•

To encourage claimants to make sure they have made all potential claims, the
Company provides them with a claims check sheet. Likewise, the Company will
continue to improve the clarity and legibility of its claims paperwork.

ii) Reinforcement of process of claims receipt (first half of FY 2009)
•

Instead of handwriting the form to receive claims, the Company’s salespersons will
type all information obtained from claimants into their mobile PCs. The Company
will then transfer the information directly to its information system in order to
eliminate human error associated with handwriting the forms.
•

A claims confirmation sheet and other claims documents will be distributed to
claimants in order for them to review their claims.

iii) Development of claims examining information system (from September 2008)
•

When inputting information on medical certificates into the claims examining
information system, the Company will use the entry/verify method, an effective
scheme to detect typing errors, to eliminate inputting errors.
•

The Company will convert information on medical certificates to electronic data as
soon as it receives the certificates in order to utilize the data in claims examination.

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iv) Further development of claims examining information system (FY 2009)
•

The Company will reduce operations requiring human skills, establish further
division of labor in claims examinations and facilitate checks using computer
systems.
•

The Company will also develop its group insurance system to strengthen its
function of claims examination.

v) A framework to monitor payments (May 2009)
•

The Company will set up a framework that re-examines whether there is
insufficient payment immediately after payments are made.

vi) Continuous encouragement for customers to make claims (October 2007)
•

Even after payments are made, the Company will continue to re-examine medical
certificate information stored in its “Payment Information Integration System” to
seek further insufficient payments.

3) Product development management

i) Improvements to the Company’s product development management (currently in
practice) •

People in charge of product development will give special emphasis to the review
of benefit payment workflows, even during preliminary phases of development.
•

The product development departments and the claims payment departments review
payment workflows with a checklist even before a decision has been made to
develop a particular product.
•

The Company will establish an internal regulation that requires the termination of
product development if there is difficulty creating a clear benefit payment
workflow for a particular product.
•

The Company will reinforce its management of after-sales service.

ii) Easy-to-understand policy terms and conditions (June 2008)
•

The Company revised the terms and conditions of new policies in June 2008 to
make them easier understand. The Company will revise terms and conditions of
renewal policies in October 2008.
•

The Company will continue to improve the policy terms and conditions, taking
into consideration the requests of consumers and the claims payment departments
for further improvement.

iii) Readjustment of product line
•

The Company will periodically revise and terminate products as appropriate in