The government may consider setting numerical criteria for life insurance companies seeking approval to cut the yields they guaranteed to policyholders, Financial Services Minister Heizo Takenaka said Friday.

“On items related to insurance contracts, we will apply objective, appropriate criteria,” Takenaka told the House of Representatives Financial Affairs Committee.

The unfavorable investment environment, including razor-thin interest rates and the stock market slump, has prevented life insurers from securing enough returns on investments to match fixed yields on policies.

While life insurers have been hit hard by negative spreads, the Insurance Business Law only permits them to lower their guaranteed yields when they go under.

The government has drafted a bill to amend the law so insurers can cut yields guaranteed to policyholders before they go bankrupt, but the bill has been criticized as being too vague about cases in which cuts are permitted.

Takenaka said the government will decide whether to approve yield cuts after it takes into account insurers’ efforts to improve operations.

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