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The chairman of the Life Insurance Association of Japan welcomed the Financial Services Agency’s plan to allow life insurers to cut yields promised to policyholders.

But at the same time, Ikuo Uno, who is also president of Nippon Life Insurance Co., flatly denied that any insurer needs to do so.

“Debating the issue is different from saying whether it is necessary,” Uno said.

Noting the life insurance industry faces obligations that last 20 to 30 years, he said, “You never know what could happen, and to protect the ultimate interest of policyholders, many means should be prepared besides bankruptcy.”

He emphasized that life insurers would not collectively decide to lower interest rates, as that would be “against the conscience of market principles.”

Life insurers collectively affirmed that they would not need to lower promised rates when announcing their earnings for fiscal 2000.

The industry is suffering a slow squeeze on their profits as promised returns continue to exceed profits from investments.

The industry saw five collapses in the 12 months to March 31.

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