NU Online News Service, Aug. 21, 5:15 p.m. — Washington
The American Council of Life Insurers, Washington, is asking the U.S. Trade Representative to help level the playing field between “Kampo,” Japan?fs government-owned life insurance program, and other foreign and domestic life insurers that do business in Japan.
But ACLI hopes the Japanese government will agree to end preferential treatment for Kampo on its own, so that private life insurers will not have to seek formal remedies, according to Gary Hughes, ACLI?fs general counsel.
ACLI says the Japanese government is violating the “national treatment” standard in the General Agreement on Trade in Services, or GATS, by giving Kampo so many advantages over its competitors.
The Japanese government founded Kampo in 1916 to provide low cost life insurance.
The Kampo system pays no taxes, and it is not subject to marketing regulations, solvency regulations, Japan’s commercial code or supervision by Japan?fs Financial Services Agency, Hughes says.
Moreover, Hughes says, the Japanese government gives Kampo another significant advantage over its competitors by providing a government guarantee on each policy Kampo issues. The government guarantees are available only on Kampo policies.