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August 23, 2001 at 08:00 PM
NU Online News Service, Aug. 23, 3:35 p.m. – Standard & Poor’s, Tokyo, warns it will view any move by a life insurer in Japan to reduce its guaranteed yield payments to policyholders as a default on its contractual obligations.
The Japanese government is considering a proposal to allow Japanese life insurers to reduce guaranteed yields promised to policyholders.
“Standard & Poor’s would immediately place the financial strength and counter-party ratings of any life insurer that announces it is contemplating a reduction of its guaranteed yield on CreditWatch with negative implications,” S&P writes in a response to the proposal.
The rating agency may change the life insurer’s counter-party rating to “SD,” or Selective Default, on the date the new lower yield becomes effective, reflecting the default on the guaranteed yield policies, S&P says.
