View this article online: https://www.insurancejournal.com/news/international/2000/10/24/10588.htm
Masaharu Hino, the head of Japan’s Financial Services Agency (FSA) which oversees the Japanese insurance industry, indicated that his office would press life insurers to supply more information concerning their financial condition in the wake of the bankruptcy protection filings by Kyoei Life and Chiyoda Life.
According to a report in the Financial Times he expects to closely examine current balance sheets, details of new policies and canceled policies and the insurers’ solvency margins, and will audit the information, if there appear to be problems.
The government is particularly concerned that the 180 billion Yen ($1.66 billion) fund established by the insurance industry, and an additional 400 billion Yen ($3.7 billion) government contingency fund will be insufficient to cover the net liabilities of the failed insurers, necessitating further borrowing in Japan’s already heavily indebted public sector. This in turn could cause a taxpayer revolt.
A possible solution lies in allowing some more solvent Japanese and foreign insurers and to take over the failed companies. Yamato Mutual Life Insurance Co., a small life insurer, has expressed interest in taking over Kyoei’s business, and is currently negotiating with the FSA to absorb failed insurer Taisho Life.
Prudential has indicated that it will keep its long standing ties with Kyoei, and will continue to seek a way to help the troubled insurer. GE Capital has also expressed an interest in Kyoei’s bailout. AIG is already working with the bankruptcy court to help Chiyoda.