WASHINGTON, April 6, 2012 /PRNewswire-USNewswire/ -- The American Council of Life Insurers (ACLI) and 14 other global business groups expressed "deep concerns" over Japan's commitment to fulfilling its international obligation to provide a level playing field to all insurers and other financial institutions doing business in the Japanese market.
In a joint statement, the industry groups said that legislation pending in the Japanese legislature, the Diet, would provide Japan Post Insurance (JPI) an even greater marketplace advantage than it already enjoys. This legislation runs counter to Japan's commitments to the World Trade Organization (WTO) to assure equal conditions to all market participants.
"Despite years of earnest dialogue, assurances from Japan and the clearly stated positions of other government and private sector stakeholders, the Japanese government appears poised to tilt the already uneven playing field further in favor of JPI. This is a major reversal of course that will have implications for Japan's international interests—including its expressed desire to enter into new trade agreements with its partners," said Brad Smith, chief international officer for ACLI.
Under the legislation, which was introduced March 30, JPI would be exempt from following the same rules and procedures required of private sector competitors when bringing new or modified products to the marketplace. The legislation would also discourage the selling of private sector products through Japan Post's 24,000 postal outlets. In addition, it would make permanent many of the regulatory advantages and favorable legal and tax exemptions that JPI enjoys. The legislation was introduced by three of Japan's major political parties, including the current majority party.
"This legislation is a major step backwards. If enacted, it will reduce consumer choices and further distort an economy already overly dominated by this gigantic, state-owned enterprise. Our hope is that meaningful review of this legislation will cause a change in direction which will let Japan fulfill its WTO commitment to provide the same conditions of competition to all market participants. Until Japan does so, we need a clear commitment to a standstill on new or modified products by JPI," Smith said.
The joint industry statement urges the Japanese government to use the remaining time before the legislation is finalized "to ensure equivalent conditions of competition with private sector banks, insurers and delivery companies."
ACLI was joined in the statement by the American Chamber of Commerce in Japan, America's Health Insurance Plans, American Insurance Association, Association of Bermuda Insurers and Reinsurers, Canadian Life and Health Insurance Association, Coalition of Service Industries, Conference of Asia Pacific Express Carriers, European Business Council in Japan, Foreign Non-Life Insurance Association of Japan, Insurance Europe, Inter-American Federation of Insurance Associations, Mexican Insurance Association, U.S. Chamber of Commerce and the U.S.-Japan Business Council.
SOURCE American Council of Life Insurers