26 November 2012

Insurance Europe repeats urge for Japan to abide by GATS

Trade body Insurance Europe has criticised the approval of a new Japan Post Insurance education product as disregarding the competition concerns expressed by international organisations.

"Insurance Europe has long argued that there should be no new or modified products introduced by Japan Post Insurance until there is a level regulatory playing field between Japan Post and the private insurance sector in Japan. It is, therefore, disappointing to learn that Japan's Postal Services Privatisation Committee recommended on 22 November the approval of a new Japan Post Insurance education endowment product."

Insurance Europe and other international insurance and business associations have long expressed concerns that the firm enjoys competitive advantages that run contrary to Japan's obligations under the World Trade Organisation's General Agreement on Trade in Services.

According to The Daily Yomiuri, an English language Japanese paper, the panel judged it appropriate for the group to expand the variety of its products and services after it presented steps to advance its privatisation, including a planned listing on the stock market in autumn 2015.

The American Council of Life Insurers echoed Insurance Europe's concerns in its own statement. "The PSPC opinion fails to evaluate key level playing field issues. These include the lack of application of market discipline on JPI, soundness of JPI's corporate governance and internal control capabilities in ensuring its compliance with FSA laws and policy, and measures necessary to address the problem of 'implicit government guarantees' on JPI products based on an objective assessment of its actual impact in the market place, among others," it said.

"Instead, the PSPC rationalised that a new product can be approved if it is 'a typical product/service generally available in the market place, and is also a product/service targeted at individuals and strongly connected with [JPI's] core competence'. Under that logic, there would be virtually no limits on new or modified products offered by JPI."

Press release

Further reporting from Insurance Insight ©Incisive Media Investments Limited

© InsuranceEurope