JAPAN’S FSA PROBES ACCIDENT INSURANCE MARKETING

Japan’s Financial Services Agency (FSA) is looking into the way that personal accident policies have been promoted by certain life assurers, reports Nikkei . Life companies are said to have pushed the policies to companies by emphasising the tax advantages of the policies, claiming that the premiums would be 100% tax-deductible. However, the National Tax Agency stated in November 2005 that it would not approve the posting of premiums as losses, since this could lead to profit manipulation. The FSA began its investigation after several companies complained that they were not receiving the tax benefits that they had been promised by the life assurers selling the policies. Personal accident is a whole-of-life policy which pays out when corporate executives or other employees die from accidents or are hospitalised after a disaster. Some 10 companies offer such a policy, with the total number in issue estimated at 400,000 by the end of the last financial year on March 31.