Press Conference by Shozaburo Jimi, Minister for Financial Services

(Excerpt)

(Tuesday, May 22, 2012, from 9:35 a.m. to 9:43 a.m.)

[Opening Remarks by Minister Jimi]

At an informal meeting of cabinet ministers today, I reported on the appointment - which I announced the other day - of Mr. Kono, Vice Commissioner for International Affairs at the Financial Services Agency (FSA), as the first Chairman of the IOSCO (International Organization of Securities Commission) Board, which was created through the integration of IOSCO committees.

[Questions & Answers]

Q.

By last weekend, all non-life insurance companies reported their financial results. Of the three major non-insurance groups, two reported a large amount of losses, following the poor performance of the previous year due to the impact of the Great East Japan Earthquake. How do you view the condition of the non-life insurance industry?

A.

As for the three major non-life insurance groups' financial results for the latest business year, one of them reported a profit decline compared with the year ended in March 2011 and the other two reported losses, as you mentioned. However, the solvency margin ratio, which is a benchmark of insurance companies' financial soundness, was higher than the supervisory standard of 200% at all of them, so I believe they have maintained adequate soundness.

The Financial Services Agency (FSA) will continue to carefully monitor non-life insurance companies' management status.

As was mentioned in the question, the results were affected by the Great East Japan Earthquake and the flooding in Thailand, which I visited during the Golden Week holiday. Around 450 Japanese companies were affected by the flooding, and I presume that the large amount of insurance benefits paid in relation to those disasters was a major cause of the poor results.

Q.

I have two questions concerning Iran. There has been a media report about the idea of using an account at the Bank of Japan as an alternative to the frozen account at Bank of Tokyo-Mitsubishi UFJ. Could you tell me about the status of deliberation on this idea?

A.

Regarding transactions with Iran, the whole government is holding discussions to find ways of avoiding disruptions to the stable supply of crude oil to Japan and legitimate trade. The FSA will appropriately deal with this matter while maintaining close cooperation with relevant ministries and agencies.

In short, we are not sitting on our hands. However, as this concerns diplomacy, I regret to say that I cannot talk about details.

Q.

Do you see any prospect for a solution?

A.

I cannot comment on that, either, and yet we are appropriately dealing with this matter.

Q.

Let me ask just one more question. There has been a media report that the government will undertake reinsurance for crude oil imports from Iran. Please tell me about the status of preparation for that.

A.

Regarding the EU's sanctions against Iran, it has not been decided whether reinsurance will be completely banned after July 1. However, the government will continue to call for the continuation of exemption. As for future actions, the whole government is holding discussions while keeping watch on the international situation surrounding Iran, so the FSA will appropriately deal with this matter while maintaining close cooperation with relevant ministries and agencies.

As has been announced, five major countries will hold negotiations with Iran tomorrow. While keeping watch on how the negotiations will develop, we will appropriately deal with this matter while maintaining close cooperation with relevant ministries and agencies.

As this concerns diplomacy, it is a delicate issue.

(End)

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