U.S. life insurers are watching and waiting as Japanese leaders sort out the effects of a move by Japan’s Parliament to reject a proposal to privatize the country’s mammoth postal system.[@@]
The system includes Kampo, a life insurance business with $1 trillion in assets, as well as a savings business, a retail post office network and a basic mail delivery system.
Japan’s Upper House voted 125-108 to reject the postal privatization plan earlier today, with the help of 30 votes from members of Japanese Prime Minister Junichiro Koizumi’s Liberal Democratic Party, and the Lower House passed the measure by an unusually slim 233-228 vote in July.
Because the measure received only 1 vote more than needed for passage in the Lower House and a number of Liberal Democratic Party members of parliament defected, many Japanese observes greeted the results as a setback for Koizumi’s government, according to press reports.
Japanese unions have opposed the privatization proposal, arguing that rural residents might be left out of the new postal and financial services order.
But Koizumi has spent years working on the postal privatization plans. Before the Upper House voted, he said he would dissolve the current Parliament if lawmakers rejected the proposal.