International Industry Coalition Call for Equivalent Conditions of Competition In Japan's Postal Privatization Implementation.WASHINGTON, June 26 /PRNewswire/ -- A coalition of 9 associations from the U.S., Europe and Canada, representing a range of service industries, today jointly submitted comments to two Japanese government agencies calling on the government to ensure "equivalent conditions of competition" prior to any expansion by Japan's postal financial business companies.
In the comments, the coalition also called for "a clear, predictable, and transparent process" in the privatization privatization: see nationalization.
Transfer of government services or assets to the private sector. State-owned assets may be sold to private owners, or statutory restrictions on competition between privately and publicly owned of Japan Post.
The associations are the American Chamber of Commerce in Japan, American Council of Life Insurers, American Insurance Association, Association of British Insurers, Canadian Life and Health Insurance Association, Coalition of Service Industries, European Business Council in Japan, U.S. Chamber of Commerce, and U.S. Japan Business Council.
The Japanese government is currently preparing for privatization of Japan Post's three businesses, including Kampo (postal life insurance), and Yucho (postal savings), the largest financial institutions in the world. The successors to Kampo and Yucho, the Postal Insurance Corporation (PIC), and the Postal Savings Bank savings bank, financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. (PSB PSB Pet Shop Boys (band)
PSB Public Service Broadcasting (radio and television)
PSB Public Service Board (Vermont)
PSB Public Security Bureau (China) ) respectively, will be placed under a 100% government-owned holding company starting in October 2007 as a result of legislation passed last year. The associations have long called for reform of Japan Post to be carried out to ensure that a level playing field See net neutrality. is achieved for all market participants in Japan's marketplace prior to its business expansion.
Last month, the Financial Services Agency The Financial Services Agency is a Japanese government organization responsible for overseeing banking, securities and exchange, and insurance in order to ensure the stability of the financial system of Japan. The agency reports to the Minister of Financial Services. and Ministry of Internal Affairs and Communications Ministry of Internal Affairs and Communications (総務省 Sōmushō , key Japanese government agencies charged with implementing privatization, released two draft cabinet orders to address some of the issues left unresolved by the Postal Privatization Law with respect to the business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets of the PIC and the PSB. The international industry coalition responded to a call for public comments with regard to these draft cabinet orders. The coalition's joint comments outline a number of critical concerns, among them:
* "Ensure that equivalent conditions of competition between the PSB, the PIC, and companies engaged in like business operations, prior to any expansion of the PSB's or PIC's businesses," including: -- Fair and open opportunities to compete for the privatized Japan Post's distribution of financial products consistent with commercial best practices. -- Appropriate disclosure of the postal entities' financial and accounting practices to prevent cross-subsidization. * "Maintain a clear, predictable, and transparent process to ensure that interested parties are given meaningful opportunities to comment on measures that will change the competitive landscape ... before decisions regarding such measures are made final."
The submission also seeks to confirm and clarify the procedure for the PIC's new product approval, as well as the scope of PIC or other companies' insurance products offered by the PSB. A copy of the joint comment follows.
The American Council of Life Insurers (ACLI ACLI American Council of Life Insurers
ACLI Associazioni Cristiane Lavoratori Italiani (Italy)
ACLI American Council of Life Insurance
ACLI Ada Command Language Interpretation ) is a Washington, D.C.-based trade association whose 377 member companies account for 91 percent of the life insurance industry's total assets in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , 90 percent of life insurance premiums and 95 percent of annuity considerations. In addition to life insurance and annuities, ACLI member companies offer pensions, including 401(k)s, long-term care insurance, disability income insurance and other retirement and financial protection products, as well as reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. . ACLI's public Web site can be accessed at http://www.acli.com/.
American Chamber of Commerce in Japan American Council of Life Insurers American Insurance Association Association of British Insurers Canadian Life and Health Insurance Association Coalition of Service Industries European Business Council in Japan U.S. Chamber of Commerce U.S. Japan Business Council
The list of organizations indicated above welcome this opportunity to submit comments regarding the proposed "Draft Cabinet Order to Partially Revise the Postal Privatization Law Enforcement Order" ("Draft Cabinet Order"). We understand that based on Article 138-1 of the Privatization Laws, the Draft Cabinet Order (Article 8-2) allows the Postal Insurance Company ("PIC"), without government approval, to underwrite the types of products that Kampo underwrites as of July 1, 2006. The Draft Cabinet Order also requires certain documentation be submitted by the PIC and Postal Savings Bank ("PSB") when applying to the FSA FSA Financial Services Authority
FSA Food Standards Agency (UK)
FSA Farm Service Agency (USDA)
FSA Financial Services Agency (Japan) and MIC for approval to expand the scope of their respective businesses. Further, according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. Article 3-2(3) of the draft Cabinet Order, from October 1, 2007, the PSB would be authorized to act as an agency soliciting insurance for the PIC for all products that Kampo is allowed to sell as of July 1, 2006.
As the Government of Japan applies these rules, the Organizations call on the Government of Japan to:
* Apply Article 2 of the Privatization Laws so as to ensure that equivalent conditions of competition between the PSB, the PIC, and companies engaged in like business operations, prior to any expansion of the PSB's or PIC's businesses (including the introduction of new or modified PIC products). Specifically, the Government of Japan should ensure that: -- Private sector firms are given fair and open opportunities to compete for Japan Post distribution of financial products, and that the selection of companies is conducted in a non-discriminatory and transparent manner consistent with commercial best practices. -- Financials and accounting practices of the PIC, PSB, and other postal entities will be appropriately disclosed to prevent cross subsidization. * Maintain a clear, predictable, and transparent process to ensure that interested parties are given meaningful opportunities to comment on measures that will change the competitive landscape and a genuine seat at the table before decisions regarding such measures are made final. -- The Organizations wish to emphasize that it is difficult to appropriately comment on these draft orders without being able to examine the Implementation Plans and how those plans will affect the financial services sector. Therefore, it is vital that interested parties be given a meaningful opportunity to comment publicly on the outline of the Implementation Plans that will be submitted in July 2006. * Confirm that the procedure for expansion of the scope of business of the PIC includes the modification or variation of currently existing Kampo products. * Confirm that from October 1, 2007, the scope of PIC's and other companies' insurance products offered by the PSB shall not exceed that allowed to be sold through private sector banks and shall be subject to the same regulations applied to the rest of the private sector.
CONTACT: Jack Dolan of American Council of Life Insurers, +1-202-624-2418, firstname.lastname@example.org
Web site: http://www.acli.com/