Press Conference by the Commissioner

(Excerpt)

November 25, 2002

Q.

We have a question about life insurance. Public funds in the amount of 400 billion yen reserved for corporate failures are due to expire in this fiscal year. Is the Financial Services Agency (FSA) thinking about requesting the extension of this safety net?

A.

As you may already know, the law was revised in 2000, and its supplementary provisions stated that it should be examined within 3 years and appropriate measures should be taken if necessary. In any case, it is a scheme for processing bankruptcies until the end of March 2003. We are currently examining what should be done after that.

Q.

Today, there were some news reports that the FSA is considering a new legal framework for life insurance concerning the reduction of the expected rate of interest. Could you please comment on this?

A.

The reports are not true at all.

Q.

Does it mean that the reduction will not be a subject of examination in the future?

A.

As I have explained on one or two occasions, I believe a broad study is necessary. At the current stage, we have not yet gone beyond that point as far as the expected rate of interest is concerned. We have not made any decisions on the course of action or the like in concrete terms.

Q.

The industry seems to be demanding the establishment of a robust public funding framework in terms of the fund of the Life Insurance Policyholders Protection Corporation of Japan. What is the approach or the basic policy for allocation in this area, broadly speaking?

A.

We are currently examining how the safety net, that is, the fund for protection ought to be. We do not yet have a course of action beyond that, but in any case, the industry's capacity to bear a burden will be included in the scope of examination.