The Financial Services Agency will not let banks sell savings-based insurance products, including endowment insurance, for another eight months, it was announced Wednesday.
The delay -- the result of opposition from the insurance industry and some policymakers -- had been agreed to by the agency and the insurance industry and endorsed at a morning meeting of Liberal Democratic Party lawmakers.
It was also agreed that a full lifting of the current ban on sales of insurance products by banks will come by the end of 2007, after authorities check to ensure banks do not pressure their borrowers to purchase insurance.
The LDP panel said full liberalization will be delayed if there are any signs banks are abusing their position when selling insurance products.
The FSA had originally planned to let banks sell savings-based insurance products from April and all other products two years later.
The postponements come amid concerns by major insurers over growing competition from banks in the insurance business, according to industry insiders.
In addition to checking for unwarranted pressure from banks to sell insurance, the FSA plans to find steps to prevent them from making inappropriate sales of the products, including by banning sales to small borrowers with fewer than 50 employees and owners of companies whose loans are still being screened.
Authorities will also oblige banks to separate employees involved in extending loans from those tasked with selling insurance products.
There will be exceptions, however, for regional banks.
Since the April 2001 lifting of the blanket ban on banks' sales of insurance, the FSA has gradually expanded the range of insurance products banks can sell.