06 April 2012

Insurance Europe: Joint statement on Japan Post reform

Insurance Europe has joined 14 other insurance associations and business associations to express concerns over the competitive advantages that would be given to Japan Post Insurance by legislation introduced into the Japanese Parliament on 30 March.

The coalition has written to the Japanese prime minister pointing out the harm to both consumers and the insurance industry if Japan Post is allowed to compete with the private sector on an uneven playing field. This would also run contrary to Japan's obligations under the World Trade Organisation's General Agreement on Trade in Services (GATS).

Restricting open productive never benefits economy or consumers. The coalition regrets that the legislation to revise existing Postal Privatisation Law, submitted to the Diet by the three major political parties on March 30 2012, does not appear to reflect concerns repeatedly expressed by this coalition and, in fact, raises new and serious questions regarding Japan’s commitment to fulfilling its international GATS obligations to provide a level playing field to all insurers and other financial institutions in Japan.

The coalition does not believe that the granting of new competitive advantages to Japan Post will improve citizens' lives. Instead, it will harm the employees, sales agents, contractors and investors of Japan Post’s private sector competitors; reduce consumer choice; distort Japan’s economy in a detrimental manner; and reduce opportunities for economic growth. The legislation sends exactly the wrong message about regulation to other major insurance markets that could result in harm to insurance companies regardless of where they are based, including Japan.

Moreover, by calling into question Japan’s commitment to honour its obligations under the GATS, the draft legislation could undermine Japan’s international trade interests. Japanese industry and consumers have an important stake in the international trading system, and measures such as these are objectionable, particularly when proposed by a key trading partner of both Europe and North America.

Full statement

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