DAILY YOMIURI ONLINE + AP Associated Press
You are here:

Main

FSA eyes insurance deregulation / Banks would be free to use customer info in marketing products

The Financial Services Agency is considering completely deregulating sales of insurance products by banks and other financial institutions, enabling them to make use of their depositors' personal information in marketing, financial sources said Monday.

Currently, the practice is banned under the Insurance Business Law.

If fully deregulated, banks will be able to strengthen their sales of insurance products just as they do with investment trust products.

Though banks became allowed to sell insurance products over the counter in 2001, the Insurance Business Law bans banks from engaging in certain practices out of concern banks may capitalize on their superior position in selling insurance products.

For instance, banks are prohibited from selling insurance products to employees of medium- and small-sized firms with which they have business transactions, such as loan provisions. They are also prohibited from making use of their depositors' personal information in insurance product sales.

According to the Japan Institute of Life Insurance, only 2.5 percent of households across the nation have purchased insurance policies through banks over the past five years.

As it stands, banks are not allowed to offer insurance policies tailored to their customers based upon their financial information, with the scope of insurance products handled over bank counters significantly limited, to products such as pension insurance.

The agency expects that totally lifting these restrictions on banks will also boost customer convenience.

The agency plans to set up a panel of financial experts and representatives of related organizations next month to start discussing deregulatory measures before making a final judgment by the end of the current fiscal year ending March 31.

The panel is expected to draft a system under which bank officials can provide full explanations of insurance policies to customers over the counter. It also will draw up measures to prevent banks from forcibly selling insurance products to employees of firms banks have extended loans to.

(Dec. 21, 2010)
You are here: