The Lower House’s plenary session Thursday passed a bill that will revive in April 2002 a limit on refunds on deposits at insolvent banks.

The Lower House also authorized a bill that will increase funding to protect life-insurance policyholders by using government money.

Both bills face deliberations in the House of Councilors. Officials said the government and the ruling coalition hope to enact the legislation in mid-May.

The bill to revise the Deposit Insurance Law is scheduled to take effect in April 2002. The government had originally planned to impose the deposit limit a year earlier.

The government suspended the refund limit in 1996, hoping to reassure depositors and prevent a possible run on banks amid heightening concerns of a banking crisis.

Under the deposit-refund legislation, a guarantee limit of 10 million yen in principal and interest per depositor would be introduced for time deposits, debentures — a type of bond offered by banks — issued to individuals, and money in trust with a contract guaranteeing repayment of principal.

Exceptions would be made for ordinary deposits and current-account deposits for financial settlements, with full guarantee beyond the 10 million yen limit offered until the end of March 2003.

The revised Deposit Insurance Law would also institute a contingency plan for the government to take steps such as recapitalization or nationalization of large banks or banks serving key financing roles in regional economies, if they face collapse.

The bill for revising the Insurance Business Law would increase the funds allocated to the insurance industry for the protection of life insurance policyholders to 960 billion yen from the current 460 billion yen.

The expanded sum includes a maximum of 400 billion yen from government coffers.

The bill would also facilitate the restructuring of financially troubled insurance companies.