NEW ERA DAWNS FOR JAPAN POST INSURANCE CO

Japan Post Insurance Co, a wholly owned subsidiary of newly formed Japan Post Holdings, comes into existence today, ahead of a planned privatisation by 2017. Japan Post Insurance is expected to be partially spun off as early as 2010. Full government guarantees for Japan Post Insurance policies will come to an end, although policies purchased before today will still be backed by the government. Japan Post Insurance has stated that it wants to extend its areas of sales outside traditional kampo life policies, but foreign players have objected on the grounds that the new company still maintains a number of distribution advantages in the Japan Post network. From today the insurance arm of Japan Post comes under the scrutiny of the Financial Services Agency, rather than the Internal Affairs Ministry. The FSA has stronger powers, including those of business suspension.