The failure of life and non-life insurance companies to pay benefits in numerous cases poses a serious problem. The Finance Services Agency recently reported that 38 life insurance companies operating in Japan failed to pay a combined 35.9 billion yen in insurance benefits in 440,000 cases over a period of five years to March 2005. Most of these companies are still conducting in-house investigations, and the number of nonpayment cases may top one million.

Non-life insurance companies also have failed to pay benefits for automobile insurance as well as for "third sector" insurance such as medical service and nursing-care insurance. Six major non-life insurance companies have failed to pay 29.4 billion yen in 381,000 cases. The figure includes a combined 1.22 billion yen announced in October 2006 in insurance benefits in "third sector" insurance involving 4,400 cases over a period of five years to June that year. It is expected to take more time for smaller companies to grasp the total picture of nonpayment.

One factor behind the nonpayment by both life and non-life insurance companies is that special policy conditions included in insurance agreements have become so complicated that policy holders do not understand the provisos and fail to notice that they are entitled to receive certain benefits.

A second factor is the insurance companies' established practice of paying benefits only when policy holders request payment. Insurance companies should actively help their customers determine whether they are eligible for benefits. It is imperative that insurance companies and their employees change their fundamental thinking and place priority on helping policy holders to fully reap the benefits of their policies.