Press Conference by Ikko Nakatsuka, Minister for Financial Services

(Excerpt)

(Thursday, November 22, 2012, from 10:23 a.m. to 10:36 a.m.)

[Questions & Answers]

Q.

According to a media report, the postal privatization committee is showing a tolerant stance toward Japan Post Insurance's education insurance service. Today, the postal privatization committee will hold a meeting. Even though the Financial Services Agency (FSA) explained its stance at the previous meeting, could you state your thinking once again?

A.

I am aware of the media report that you mentioned. It is up to the postal privatization committee to decide how it should proceed with its investigation and examination, so I would like to refrain from making comments.

At the postal privatization committee's previous meeting, which was held on November 15, the FSA explained in detail the status of its examination regarding Japan Post Bank and Japan Post Insurance. Regarding Japan Post Insurance's benefits payment management system in particular, the company announced on November 13 that past benefits payments, including payments of education insurance benefits, and notices regarding insurance claims need to be reviewed. This problem concerns a large number of users. We informed the committee that under the current circumstances, we cannot approve the new services without examining the status of the benefits payment management system from the perspective of protecting policyholders.

Q.

I have one more question related to Japan Post. Could you confirm whether there is the possibility that the postal privatization committee and the FSA will reach different decisions?

A.

As I have mentioned at my press conferences several times, we must follow administrative procedures based on the Postal Service Privatization Act and procedures based on the Insurance Business Act, to which Japan Post is subject, and make judgment in accordance with these two sets of procedures. The law (Postal Service Privatization Act) stipulates that we must listen to the opinion (of the postal privatization committee), if I remember correctly. We have informed the committee that for the moment, we cannot grant approval.

Q.

Regarding Japan Post Insurance's plan to finish sending notices concerning its failure to pay some insurance benefits by March, Minister Shimoji has apparently suggested that the work should be speeded up. The number of additional notices is very large and it could exceed 100,000 mails. Do you think it is possible to complete the work before March?

A.

Regardless of whether or not it is possible, in the case of failure to send notices concerning insurance claims, the company concerned should respond as soon as it can.

Q.

Regarding the economic package being prepared with a view to adoption by the end of the month, could you tell me about the progress concerning items related to the FSA, such as support measures for SMEs?

A.

Support measures for SMEs were included among the priority matters when the prime minister instructed us to work out the economic package. The FSA is holding consultations with relevant ministries and agencies so as to provide strong support for the business turnaround of SMEs in relation to the policy package that we have been promoting since April.

Q.

In relation to Japan Post, as the FSA needs to examine the benefits payment management system, will it have to reserve judgment at least until the mailing of notices is completed?

A.

As for the response to the failure to send notices concerning insurance claims, the company concerned should respond as soon as possible from the perspective of protecting policyholders, as I mentioned in relation to an earlier question. That is one issue. That is different from the issue of the benefits payment management system, namely the issue of why a problem like this has occurred. This is not a problem we can regard as solved if all notices concerning insurance claims have been mailed. Establishing an appropriate benefits payment management system is a task that should be performed separately.

Q.

Then, am I correct in understanding that the cause of this problem has not been examined?

A.

Japan Post Insurance announced this problem on November 13. It is less than 10 days since then. I am sure that Japan Post Insurance is making efforts in that respect. We remain interested in its efforts.

Q.

I understand that the Financial System Council is discussing insider trading regulation. When your predecessor, Minister Matsushita, attended a meeting of the Financial System Council in July, he said he would consider appropriate regulation, as many insider trading cases emerged, making it an urgent task to prevent such cases. Could you tell me what regulation the FSA sees as appropriate in relation to the contents of the council's discussion?

A.

The problem of insider trading related to public offerings should be eradicated. In that sense, there are various issues and challenges. Of particular note are the method for calculating monetary penalty and the imposition of penalty on information providers. The Financial System Council is now discussing these matters.

In any case, we will carefully watch how the discussion develops and will consider regulation without ruling out the possibility of legal amendment.

(End)