Copyright 2000 AFX News Limited
AFX - Asia
May
31, 2000 Wednesday
SECTION:
COMPANY NEWS
LENGTH:
320 words
HEADLINE:
Daihyaku Life Insurance collapses; govt to guarantee payouts
DATELINE:
TOKYO
BODY:
Daihyaku Life Insurance Co has collapsed, forcing the government to step in to guarantee payouts to policyholders, Financial Supervisory Agency director general Masaharu Hino said.
"Daihyaku Life Insurance Co decided to give up continuation of its businesses at an extraordinary board meeting," Hino told a news conference.
Policyholders with the medium-sized insurer should remain calm, he said, stressing that payouts would be protected in full under a safety net system operating until March 2001.
"I strongly hope that all the policyholders act calmly without being confused by any rumours," Hino added.
"Operations related to cancellations of contracts, lending to clients and dividend payment will be suspended, but those related to payouts and receipt of premiums will continue."
Finance Minister Kiichi Miyazawa told a news conference the collapse would have little impact on Japan's financial system.
"I have not heard about it in detail but I don't think this particular case will have great influence," he said.
The Financial Supervisory Agency said it would ask an administrator, to be appointed soon, to draw up measures to transfer the insurance policies to another company.
"Our agency believes that preserving the existing insurance contracts is the best way to protect policyholders," Hino said.
The FSA said its inspections showed Daihyaku's liabilities exceeded capital by 55.4 bln yen in the year to March 1999.
The insurer had 34.5 bln yen in capital at the end of March 1999, while its liabilities included 146.9 bln yen in appraisal losses from marketable securities and other assets, the agency said.
Daihyaku, founded in 1914, sought help last year from a Canadian life insurer, Manulife Financial, forming a joint venture in April 1999 to market new products.