Top insurer voices support for treasury stock system.
The leader of Japan's life insurance industry on Friday voiced support for easing restrictions on company share buybacks to allow companies to buy and hold their own shares as treasury stock a way to prop up weak stock prices.
The treasury stock system should be created ''as a step toward buybacks of shares for retirement,'' Ikuo Uno, chairman of the Life Insurance Association of Japan, told a regular press conference.
The ruling Liberal Democratic Party is considering lifting current restrictions on companies buying back their own shares and holding them as treasury stock.
Currently, such repurchases are permitted for specific purposes only such as stock option schemes.
The weakness of stocks is having a ''grave'' effect on life insurance companies, Uno said.
''Insurers must establish operations that do not rely on latent profits'' on stockholdings, he added.
Unlike other industrial countries, where companies are allowed to buy and hold their own shares as treasury stock, Japanese firms are allowed to do so only under certain conditions -- usually to feed stock option schemes or to cancel shares.
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|Publication:||Japan Weekly Monitor|
|Date:||Jan 22, 2001|
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