The Financial Services Agency might partially deregulate the life insurance sector in fiscal 2005, including expanding the range of insurance products with discounted premiums, according to agency sources.
It is also considering easing restrictions on comparative advertisements for life insurance products to boost competition in the sector, they said.
If such steps are introduced, insurers would be prompted to create new products and services, including products with low premium rates for a set campaign period, they said. That would be similar to how banks are allowed to offer lower interest rates on home mortgages during special campaigns.
The current insurance business law prohibits insurers from offering discounted premiums for certain policyholders when conditions, including age, are the same. The only exceptions are group discounts and discounts for nonsmokers.
But the financial regulator is considering liberalizing discount rates on insurance products, while setting a minimum guideline to prevent excessive dumping among insurers, the sources said.
The government lifted a ban on comparative advertisements in 1996. But insurers are required to make minute comparisons comprehensively under the current law.
The agency is expected to allow insurers to launch comparative ads that would be easier for consumers to understand by limiting the items being compared, the sources said.
At the same time, the FSA is considering enhancing supervision on the insurance sector to protect consumers, the sources added.