Since the 1950s there have been numerous contributions proposing solutions to failures of social systems. However, we have hardly found a holistic and interdisciplinary approach to a failed social system beyond “stove-piped” academic disciplines. This paper identifies a new holistic and interdisciplinary systems engineering methodology of systems engineering for a social system through a case study of Japan's insurance industry. The new methodology is a “soft” systems-approach to accommodate goals of stakeholders in a failed social system. First, the three elements of a social system are identified. Second, the multiple viewpoint model transforms these three elements of the human activity view to a new set of elements of the Holon view. Third, a social system of the Holon view is redefined as a Socio-Critical System (SCS). Finally, the Vee Model is applied for fixing a problem in the SCS. From 2005 to 2008, massive claims-payment failures cases were found in Japan's private insurance companies. They became big social scandals. The insurance claims-payment system is a typical SCS. The Financial Services Agency (FSA), Japan's financial services supervision authority, identified, with the “unintended” systems approach, dysfunctions of the insurance claims-payment system. This FSA action, even though the authority was not aware of the effectiveness of the methodology, proved to be positive in applying the Vee Model for solving failures in those claims-payment systems. © 2011 Wiley Periodicals, Inc.