Washington, DC, (October 25, 2010) – The American Council of Life Insurers (ACLI), the Canadian Life and Health Insurance Association (CLHIA), and the European Insurance and Reinsurance Federation (CEA) regret that the postal reform legislation approved by the Japanese Cabinet on October 8, 2010 does not reflect concerns repeatedly conveyed by the international business community and continues to raise serious questions regarding Japan’s commitment to fulfilling its international GATS obligations.

The ACLI, CLHIA and CEA again implore the Government of Japan to use the time remaining before the postal legislation is finalized as an opportunity to ensure a level playing field between Japan Post Insurance and foreign and other private sector insurance companies. In addition, we urge our respective governments to work together — building on the progress made in the joint talks held in Geneva on May 21, 2010 — to establish a framework with Japan to find a solution that is consistent with its international trade commitments.

The U.S., E.U., and Canadian insurance industries have long expressed the view that there should be no new or modified products introduced by Japan Post Insurance until a level playing field has been established between Japan Post Insurance and private sector companies. The legislation — which is nearly identical to the bills that failed to pass the Upper House during the last Diet session — do not adequately address this concern. For example, the legislation would:

• Provide Japan Post Insurance special legal and regulatory exemptions, including exemptions from provisions of the Insurance Business Law;
• Permit Japan Post Insurance to enter new business areas by changing the current approval process to one that requires only “notification;”
• Allow the per-person coverage limit currently imposed on Japan Post Insurance’s business to be raised to 25 million yen; and
• Provide Japan Post special tax exemptions.

As the ACLI, CLHIA and CEA have jointly noted in the past, we strongly believe that granting new competitive advantages to Japan Post Insurance will not improve citizens’ lives. Instead, it will harm the employees, sales agents, contractors, and investors of Japan Post Insurance’s private sector competitors; reduce consumer choice; distort Japan’s insurance market; and hinder economic growth. Moreover, by calling into question Japan’s commitment to honor its obligations under the GATS, the legislation could harm Japan’s international interests.

The American Council of Life Insurers (ACLI) is a Washington, D.C.-based trade association with more than 300 legal reserve life insurer and fraternal benefit society member companies operating in the United States. ACLI members represent more than 90 percent of the assets and premiums of the life insurance and annuity industry. In addition to life insurance and annuities, ACLI member companies offer pensions, 401(k) and other retirement plans, long-term care and disability income insurance, and reinsurance. ACLI's public Web site can be accessed at www.acli.com.