The Financial System Council, an advisory panel to the government, will consider ways to help Japanese life insurers restore their financial health, officials of the Financial Services Agency said Tuesday.
The council, which will issue an interim report by summer, is expected to study measures to boost insurers' capital bases, encourage them to develop new products and promote disclosure standards.
Life insurers are finding themselves in hot water as rock-bottom interest rates bite into investment returns, resulting in a negative spread between rates of return guaranteed to policyholders and much lower overall returns on assets.
The feeble Tokyo stock market, which has compounded such problems and led to weaker insurers collapsing, has some in the industry calling on the government to allow insurers to cut yields guaranteed to policyholders. The council is likely to take up this issue in its study, the officials said.
When Chiyoda Mutual Life Insurance Co. went bankrupt last fall, Hideyuki Aizawa, then head of the Financial Reconstruction Commission, suggested a revision to the Insurance Business Law to allow insurers to cut guaranteed yields.