JAPAN Law and Practice Contributed by: Hironori Nishikino and Koji Kanazawa, Chuo Sogo LPC
is possible for these exceptional contracts to include separately stipulated special provisions.
• the payment of insurance premiums; • the cancellation of insurance contracts and refunds thereof; • the cooling-off procedures; • the matters concerning the notification to be made by the policyholder or the insured; • the timing of commencement of the insurance liability; • the grace period for payment of insurance premi- ums; and • the invalidation and reinstatement of insurance contracts after their expiration. 8.2 Warranties 9. Insurance Disputes 9.1 Insurance Disputes Over Coverage Insurance disputes are generally resolved in district courts or summary courts, depending on the value of the dispute. There are no special courts for resolv- ing commercial insurance disputes and, therefore, the same procedure is applicable to both consumer contracts and reinsurance contracts. In practice, a jurisdiction clause in an insurance policy determines which court will hear disputes in relation to the insur- ance policy. 9.2 Insurance Disputes Over Jurisdiction and Choice of Law See 9.1 Insurance Disputes Over Coverage . 9.3 Litigation Process Generally, a first hearing date is scheduled around one month after the filing of a lawsuit. It usually takes six months to one year to reach a judgment. This is not applicable in Japan. 8.3 Conditions Precedent This is not applicable in Japan. The losing party may appeal to the upper court if it is not satisfied with the decisions of the court of first instance. There are two stages of appeal.
7. Alternative Risk Transfer (ART) 7.1 ART Transactions Based on the content of the product, it should be determined whether such product is subject to Japa- nese regulation. Certain products may be subject to
regulation as reinsurance products. 7.2 Foreign ART Transactions This is not applicable in Japan.
8. Interpreting an Insurance Contract 8.1 Interpretation of Insurance Contracts and Use of Extraneous Evidence There are no specific laws or regulations on how to interpret insurance contracts. In general, the courts interpret insurance contracts objectively, taking into account their comprehensibil- ity by average, reasonable customers. Nonetheless, the courts tend to recognise agreements between insurance companies and customers that differ from explicit policy conditions, taking into consideration the way in which insurance companies and customers negotiated and concluded their insurance contracts, and seek reasonable solutions while ordering com- pensation for damages. At the time of solicitation of an insurance contract, the Insurance Business Act requires insurance companies to provide documents (contract outline) containing the following information to fulfil their obligation to inform the policyholder: • the structure of the insurance policy/coverage; • the matters concerning insurance benefits (includ- ing giving typical examples of payment conditions of insurance benefits and explaining cases where insurance benefits are not paid); • the duration of the insurance policy; • the amount of insurance and other conditions for underwriting of insurance contracts;
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