Press Conference by Yuji Yamamoto, Minister for Financial Services

(Excerpt)

April 3, 2007

Q.

On the problem of overcharged fire insurance premiums, insurance companies made announcements on Friday (March 30) and yesterday (April 2). The number and value of overcharged premiums seem to be substantial. Would you give us your comments and the Financial Services Agency's future policy regarding the problem?

A.

Several non-life insurance companies released their findings through their investigations into misapplications of fire insurance premium brackets broken down by building structure class. By the end of March 2007, each non-life insurance company picked up and looked into contracts that were highly likely to include misapplications of premium brackets or any other mistakes, based on contract data specified on the written insurance applications. We have heard that each company would inquire with relevant customers about other contracts and correct problems, if any, over the coming one year. We would like to see each non-life insurance company continue thorough review regarding this problem, work out effective measures for prevention of such problem and appropriately deal with customers. We would also like to urge each non-life insurance company to review the whole business process from insurance soliciting as the entry and insurance money payment as the exit with a view to protecting insured people and to proceed with appropriate business operations.

Q.

While discussions at the Expert Panel of the Task Force for Heavily Indebted People have come to a final stage, the FSA may be planning to establish counseling counters in major cities throughout Japan. But local governments and the Ministry of International Affairs and Communications do not seem to be positive toward the plan that they view as an additional burden. How will you handle this problem as the chief of the task force?

A.

As reported by media, some expertise is required for responding to inquiries. It would be difficult for local governments to set up counseling counters with present personnel alone. A reported poll said that municipalities tolerating their greater burden were limited to only 3% of the total. The counseling counter idea is the most important, and municipalities are planned to play a central role in this respect. If there is a case in which municipalities reject our request for counseling counters, top-level talks or the Cabinet's consultations may have to be considered in addition to working-level negotiations. We will never sit back in promoting the counseling counter idea. The complaint that the counseling counter plan would be expensive might have been based on some misunderstanding. I believe some people might have misunderstood that inquirers would attempt to solve all their problems at counseling counters. Even if inquirers visit court or lawyer offices, their problems may not be solved immediately. Municipal counseling counters should be taken as an entrance to a counseling service network. Such counter may give an inquirer a pamphlet specifying schedules and contacts for free-of-charge consulting services by judicial scriveners, schedules and contacts for lawyers, and contacts for the Nihon Shiho Shien (Japan Judicial Assistance) Center. Counseling counters should thus be taken as stations for access to judicial experts. There is a request for measures that do not require any fiscal funding. Likely, local governments may employ recruits on April 1 and train them until around June. Learning about the multiple debt problem should be incorporated into training programs. If recruits learn about overcharged lending rates, the mechanism of the Investment Deposit and Interest Rate Law or the Interest Limitation Law, measures for the working poor, and other social knowledge regarding the multiple debt problem, it alone may make a difference.

Q.

Let me confirm one point in this respect. Do I understand that you are planning to meet with Internal Affairs and Communications Minister Suga to discuss this problem?

A.

I have maintained close communications with the internal affairs minister. On Friday, the minister made a surprise visit to the FSA. In this way, we have frequently discussed various issues with each other. Whether official or not, communications may make a breakthrough. If not, I would like to have top-level talks with him, based on working-level efforts.

Q.

Do you mean that top-level talks should involve municipal mayors?

A.

Before confirming an answer to the question, we would like to have talks with the secretariat of the task force. The secretariat does not believe that the Ministry of Internal Affairs and Communications is keeping quiet. Working-level talks may have continued. The media reports could turn out to be groundless. I would like to watch developments for the immediate future before making any decision.

(End)