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Compulsory auto insurance program profits to be returned for car accident victim care

Part of approximately 610 billion yen in management gains of the compulsory auto liability insurance program, which had been diverted from the state budget's special account to the general account, will be returned to secure funds to continue relief measures for traffic accident victims.

Finance Minister Taro Aso and Land, Infrastructure, Transport and Tourism Minister Keiichi Ishii will officially sign a memorandum on the decision on Dec. 18.

The Finance Ministry will then resume the return of investment profits from the general account to the special account for the first time in 15 years. As a first step, over 2 billion yen will be transferred to the special account for fiscal 2018.

It had been feared that the Finance Ministry's failure to return the money to the special account would adversely affect projects funded with management gains, including the operation of hospitals specializing in treating seriously disabled people. With the agreement, however, such a critical situation will likely be averted.

The problem dates back to fiscal 1994 and 1995 when the Finance Ministry transferred some 1.12 trillion yen of profits from the investment of premiums from the compulsory auto liability insurance program in the special account controlled by the former Transport Ministry to the general account, citing the government's financial difficulties.

Such profits are earmarked for the operation of hospitals specializing in treating people with serious disabilities and nursing care services that patients receive at home.

The Finance Ministry had signed memoranda with the Land, Infrastructure, Transport and Tourism Ministry four times, promising to fully return investment profits transferred to the general account.

Some 690 billion yen, including interest, had been returned to the transport ministry's special account by fiscal 2003, but the Finance Ministry had continued to extend the deadline for repayment ever since, not paying a single additional yen. Currently, some 610 billion yen comprising principle and interest remains in the general account.

Because of this, projects to extend relief to traffic accident victims in the compulsory auto liability insurance system are being funded by using about 10 billion yen each year from management gains remaining in the transport ministry's special account.

Concern had spread among the families of traffic accident victims who receive relief from the program that if the current situation continued, it was highly likely that all the investment profits in the special account would run out in about a dozen years.

The memorandum to be signed by the finance and transport ministers, the fifth of its kind, will guarantee that investment profits will be returned to the transport ministry's special account through annual discussions between the ministries on how much will be returned in a given fiscal year.

As a result, in fiscal 2018, the over 2 billion yen that the Land, Infrastructure, Transport and Tourism Ministry is demanding, including some 1 billion yen to launch new projects such as creating more specialized hospitals, will be returned to the ministry's special account.

Increases in how much money is returned from the general account to the special account in fiscal 2019 and beyond is expected to be determined by the amount of money that was taken from management gains of the compulsory auto liability insurance program.

The memorandum sets the deadline for fully returning the money at fiscal 2022. However, the memorandum will be renewed if the Finance Ministry fails to keep the deadline.

Yuji Kuwayama, leader of a nationwide group of families of those in a permanent vegetative state, welcomed the decision. "The latest move is significant in that it has been confirmed that the Finance Ministry intends to return the money. Anyone can become a traffic accident victim. I'd like the whole nation to closely watch if the Finance Ministry will repay the money in accordance with the memorandum," he said.

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