In response to the rapid increase in automobile accidents, the Automobile Liability Insurance Law was promulgated on July 29, 1955 in order to establish an automobile liability insurance system and ensure thorough protection of victims in such accidents. The Law came into force between August 1955 and February 1956.
  The Law is designed to protect victims, who are killed or injured in automobile-related incidents, by establishing a system that guarantees compensation for damage. The automobile liability insurance system under the Law may be deemed to be one of the relief systems for victims. Automobile third-party liability insurance (hereinafter referred to as "third-party insurance") and automobile mutual liability insurance (hereinafter referred to as "mutual insurance") constitute the core of the automobile liability insurance system.
  In order to complement the third-party insurance and the mutual insurance systems, the government operates an automobile liability compensation system. Under this system, the government provides compensation for damage to victims of hit-and-run cases or accidents caused by uninsured automobiles, because such victims are not covered by third-party insurance or mutual insurance. The amount of compensation is similar to that of the benefits under third-party insurance. In fiscal 2000, the system covered 3,964 victims of hit-and-run cases and 655 victims of uninsured cases. Thus, the system paid about 19.98 million yen per person killed and 570,000 yen per person injured on average (Source: Road Transport Bureau, Ministry of Land, Infrastructure and Transport).