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| (Provisional Translation) June 4, 1999 Financial Supervisory Agency The Government of Japan |
| Statement by the Commissioner of the Financial Supervisory Agency |
- On Toho Mutual
Life Insurance Company
| 1. | This afternoon, Toho Mutual Life Insurance company (hereafter referred to as
"Toho Life") has notified to the Financial Supervisory Agency (hereafter
referred to as the "Agency") that they have decided to discontinue its business
at the board meeting, and has asked the Agency to issue an order to suspend its business,
in pursuance of Article 241 of the Insurance Business Law. |
| 2. | Immediately after this notification, we have ordered Toho Life to suspend part
of its business and to prohibit any activities which may cause further deterioration of
its asset quality, in pursuance of the said Article. In order to implement - based on the Article - the "order to place operations of an insurance company and management of its assets under Insurance Administrator", we will promptly appoint an Insurance Administrator of the company. |
| 3. | Following the order to partially suspend business, the company's operations
related to cancellation of insurance contracts, loans to policyholders, and dividend
payment will be suspended, but maintenance operations such as disbursement of insurance
money and receiving of insurance premium will continue. Since Toho Life delegates cancellation business to the GE Capital Edison Life Insurance Company, the latter company's delegated operations related to cancellation will be suspended in actual practice. |
| 4. | Since the Agency believes that the continuation of insurance contracts should be
the best solution to protect insurance policyholders, we are planning to order the
Insurance Administrator to draw up a plan of insurance contracts transfer, and the
disposal scheme for Toho Life will be set by this plan formulated by the Insurance
Administrator. |
| 5. | Since the following safety net for insurance policyholders is in place, we
strongly encourage the insurance policyholders to act rationally instead of basing their
actions on unfounded rumors. |
| 6. | Namely, the Life Insurance Policyholders Protection Corporation is established
as the safety net for bankrupted insurance company, and the policyholders are protected by
the Corporation compensating up to 90% of technical provision (reserve money that has been
accumulated for the payments of insurance money) through financial assistance and/or
continued underwriting of existing insurance contracts. Moreover, it should be noted that
all sum payable at death that have to be paid within the specified term until the end of
March, 2001 are fully protected and will be paid back in full amount. |
| 7. | In the light of low interest-rate economic environment in recent years, each
insurance company has been working hard toward strengthening management base through
increasing its capital. The Agency will continue to make use of its supervisory power in an appropriate manner through the strengthened on-site inspection and off-site monitoring, and strict enforcement of the Prompt Corrective Action, which was introduced in April of this year. With these supervisory efforts, we intend to ensure sound management of insurance companies and protection of insurance policyholders. |