SUMMARY. Key words. Housing warranty insurance, MLIT, insurance entity, on site inspections, reinsurance, Risk Management

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1 SUMMARY In Japan, housing suppliers 10-year warranty towards buyer is compulsory since Considering the possibility of suppliers bankruptcy and insolvency, housing warranty has been designed by the Special Law on Fulfillment of Housing Warranty and Quality voted on May 30 th 2007 and implemented on October 1 st Under this law, the seller/ contractor can either make a deposit in a specific Government account or subscribe a Housing Warranty Insurance. This insurance cover is sold by MLIT approved Insurance Entities, in charge of on-site inspections during the construction process. These entities reinsure themselves with the General Insurance Companies which are monitored by the independent Financial Services Agency FSA. The fact that some of the General Insurance Companies are shareholders of the Insurance Entities they reinsure and also the existence of a not-so-transparent but compulsory reinsurance pool where all the General Insurance Companies mutualize such reinsurance business may entice the effort to explore the particular merits and demerits of this rather unique Japanese insurance and reinsurance system. Key words Housing warranty insurance, MLIT, insurance entity, on site inspections, reinsurance, Risk Management

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18 JAPAN HOUSING WARRANTY INSURANCE DESIGN Housing Supplier Step 2a Insured claim Step 4a Insurance payment (in$case$a$direct$claim$has$not$been$made)$ Housing Warranty Insurance R epa S tep i r, 3 e t c. Defect Housing buyer

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Shuusuke Yamazaki 1. 1 Mitsui Sumitomo Insurance Co.,Ltd, Chiyoda-ku,Tokyo, Japan. shuusuke.yamazaki@msins.com

Shuusuke Yamazaki 1. 1 Mitsui Sumitomo Insurance Co.,Ltd, Chiyoda-ku,Tokyo, Japan. shuusuke.yamazaki@msins.com Description of Japanese mandatory housing warranty insurance including the background of establishment of warranty insurance system and the current status of utilization Shuusuke Yamazaki 1 1 Mitsui Sumitomo

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