Claim-Payment Failures Of Japan’s Insurance Companies And Designing Better Payment Architecture: Finding A Standard Solution To Socio-Critical Systems By Applying the System Engineering Vee Model Approach (First Report)

摘要

Sociology, political science, economics and international relations traditionally deal with social systems. However, they have not proposed a solution to fix problems when they fail. This paper identifies the scope of social systems in which we can find a solution to cure such failures through three tests; the externality test, mission-criticality test and controllability test. We name these a socio-critical system (SCS). Architecture Vee Model can be applied as the standard method to fix failures in an SCS. Massive claim-payment failures were found in Japan’s private insurance companies and they became big social issues in 2005-2008. Japan’s financial services supervision authorities identified failures to the full extent and issued successive administrative actions against most insurance companies to encourage them to improve their governance and overall solicitation-to-payment systems. This FSA’s action, even though it was not necessarily aware of such methodology, proved to be positive in applying Architecture Vee Model to solve failures in those claim-payment systems, which are typically categorized in SCS.