An advisory panel to the government endorsed a plan Tuesday to raise premiums for "kampo," the government-run postal life insurance system, by an average of 2.9 percent from July, government officials said.
The increase, the first since April 1999, reflects the deteriorating investment returns on insurance funds.
The Postal Services Council, an advisory panel to the minister of public management, home affairs, posts and telecommunications, also endorsed a plan to cut the guaranteed yields for postal insurance policyholders by 0.5 percentage point to 1.5 percent, also effective in July, the officials said.
Under the new premium scheme, monthly premiums payable by a 40-year-old man for a 10-year, 1 million yen endowment insurance will rise 2.2 percent to 8,780 yen.
Life insurers, both in the private and public sectors, are in trouble as rock-bottom interest rates have bitten into investment returns, resulting in a "negative spread" between rates of return guaranteed to policyholders and much lower investment returns on assets.
The negative spread on the postal insurance system is expected to hit a record of more than 1 trillion yen in fiscal 2000, which ends March 31.