Banks launch OTC sales of life insurance products.
Banks across Japan began over-the-counter sales of some life insurance products Tuesday after the government expanded the scope of insurance products they can sell as part of its financial deregulation steps.
Among the newly added types of products that banks can sell is individual annuity insurance, a kind of life insurance.
Banking industry officials said each of four major banking groups -- Mizuho Holdings Inc., Mitsubishi Tokyo Financial Group Inc., UFJ Holdings Inc. and Sumitomo Mitsui Banking Corp. -- plans to sell up to 100 billion yen worth of life insurance policies a year, with commission fees ranging from 3% to 5%.
The latest measure brought a step closer full liberalization of sales of insurance products by banks, following an initial deregulation in April 2001 allowing lenders to sell only limited types of nonlife products.
The Financial Services Agency (FSA) listed three types of nonlife insurance products and one type of life insurance policy when it first opened the doors for banks to conduct over-the-counter sales of insurance products.
However, special conditions attached had made it effectively impossible for banks to sell the life insurance product.
The three nonlife insurance policies that banks have been allowed to sell since April 2001 are long-term fire insurance linked to housing loans, overseas travelers' personal accident insurance and debt-repayment insurance.
The FSA also allowed securities subsidiaries of banks to sell life insurance products starting Tuesday, so banks can sell the new products in cooperation with their securities units.
Banks want the government to further expand the types of insurance they can sell, but insurers are opposed to further advances by banks into their business territory.
A senior official at one of the four banking groups said, ''We want to make our over-the-counter sales of insurance products a success so we can one day become an integrated financial services group'' with banking, insurance and brokerage units.
The FSA is to decide by the end of fiscal 2003 whether to further liberalize sales of insurance products by banks.
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|Publication:||Japan Weekly Monitor|
|Date:||Oct 7, 2002|
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