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Chairman’s Statement on the Japan Post Insurance’s Application for Approval of New Businesses including Redesign of Its Whole-Life Insurance Product
31 March, 2017
On 31 March, Japan Post Insurance (JP Insurance) filed an application to the Financial Services Agency and the Ministry of Internal Affairs and Communications for approval of its new businesses including redesign of (1) whole-life insurance, (2) term individual annuity and (3) hospitalization rider.
The LIAJ has repeatedly argued that it is inevitable that a level playing field to accommodate fair competition between JP Insurance and private firms and that adequateness of JP Insurance’ s business management arrangements is demonstrated in order for any expansion of business scope of JP Insurance.
Since the listing of JP Insurance in November 2015, virtual government ownership is not dissolved, and yet even a specific plan for completion of its privatization is not announced. With our observation, it has no chance to be recognized as to have the level playing field to accommodate fair competition between JP Insurance and private firms. Therefore, we believe that it is not reasonable to justify allowing for JP Insurance’s business expansion under the current circumstances where essential conditions for their business expansion are not met.
In the mandatory deliberation of this application at the Postal Privatization Committee, we strongly expect the future deliberation to take into consideration the basic principle stated in Article 2 of the Postal Service Privatization Act which provides to "take measures to ensure a level playing field with private firms which provide similar services", and to be made in a careful manner by, for example, providing opportunities for dialogue with the private life insurance sector in competition with JP Insurance.
The Life Insurance Association of Japan