NU Online News Service, Aug. 12, 2004, 3:30 p.m. EDT
The American Council of Life Insurers has given a mixed review to the Japanese government’s preliminary plan to privatize Japan Post.[@@]
“We are certainly encouraged by several elements of the plan, but we are also troubled by some portions containing ambiguous language,” says Frank Keating, president and chief executive of the ACLI, in Washington.
The Council on Economic and Fiscal Policy, which advises the Prime Minister of Japan, developed the plan for privatizing Japan’s giant postal businesses, including its life insurance unit, Kampo, the world’s largest life insurer. The CEFP produced a preliminary draft of its plan Aug. 6.
“On the positive side, the CEFP outline addresses the need for a level playing field,” Keating says. “However, it does not specify when a level playing field will be achieved.”
According to the plan, the newly privatized corporations shall “in principle” have the same obligations as other private corporations from the beginning of a transition period, which is to begin in 2007. The outline also suggests opening up Kampo’s ability to market new products in competition with private insurers.
“We continue to stand by the principle that no new or modified product sales by Kampo should occur until all the factors that contribute to today’s nonlevel competition are remedied,” Keating says.