Taisho Life Insurance Co. said Tuesday it has raised 4.5 billion yen through a third-party allotment of new shares with the aim of strengthening its capital base.
The latest capital injection for the small life insurer raises its solvency margin, a key gauge of an insurer's ability to pay insurance claims, to 355 percent -- far above the financially strong-or-weak line of 200 percent. The margin stood at 67.7 percent at the end of March.
Under the share allotment, Claremont Capital Holding Inc., a Tokyo-based holding company and the largest shareholder in Taisho Life, raised its stake in the insurer to 48.5 percent from 47.7 percent.
A Taisho Life official said the insurer intends to improve its solvency margin to about 500 percent by improving efficiency, but did not elaborate.
The insurer was deemed financially weak after regulators inspected the firm last fall as part of an examination of the entire life insurance industry.
Early this year, regulators ordered Taisho Life to recapitalize and improve its management. It was the first time that the then Financial Supervisory Agency had ordered a life insurer to take corrective action under the Insurance Business Law.
The latest capital injection is the insurer's third since March. At the end of that month, Taisho raised 5 billion yen by allotting new shares to third parties, including Claremont. On June 22, Taisho raised 1.28 billion yen in the same manner.