The government submitted an amended bill Friday to the Diet to allow life insurance companies to cut the guaranteed yields they promised to policyholders, government officials said.
The Cabinet earlier in the day approved the bill aimed at preventing the collapse of life insurance companies. The government wants the Diet to pass the amendment by June 18, when the current legislative session ends.
The ruling coalition endorsed the bill Tuesday. It was prepared by the Financial Services Agency to open the way for new rules to be introduced under the revised Insurance Business Law.
Financial Services Minister Heizo Takenaka said at a news conference, "I would like lawmakers to hold open discussions to promote public understanding of the issue."
The guaranteed yield is the rate of investment return an insurer promises policyholders.
Many insurers promised high yields to attract customers during the bubble economy in the late 1980s. But plunging stock prices and record-low interest rates have made such promises hard to keep.
Many insurers have negative spreads, in which the returns on their investments are significantly below the rates of the yields they promised.
The bill calls for life insurers seeking to cut yields to obtain approval at a meeting of policyholders' representatives and clarify the responsibility of management.
"The bill took its current shape so life insurers will be able to continue doing business without policyholders worrying if they will collapse," Chief Cabinet Secretary Yasuo Fukuda said Friday.