Press Conference by the Commissioner

(Excerpt)

June 2 , 2003

Q.

Last Friday, life insurance companies reported their accounting results for the FY to March, 2003. All the major life insurance companies denied the need or the intention to lower guaranteed interest rates. Why did you submit a bill for lowering guaranteed interest rates to the Diet under such circumstances? We would like to hear your view.

A.

As you know, life insurance companies are facing with severe business environment characterized by issues of large negative spread due to a super-low interest rate over the years, in addition to a decreasing of the total policies in force and sharp stock price drops. We submitted the bill to create a scheme as an alternative measure for responding to current situation. It is life insurance companies and insurance policy holders who decide whether they use it or not. I think it will be judged in the future whether insurance policy holders and others will use the scheme appropriately.