A key subsidiary of Japan Post Holdings Co. will refrain from offering cancer insurance for the time being, removing a major thorn in Japan-U.S. talks on a prospective Trans-Pacific Partnership (TPP) free trade deal.
"I have no intention of standing in the way of the (Japanese) government's TPP talks," Japan Post Holdings President Jiro Saito told The Asahi Shimbun on May 8.
He did not elaborate on how long Japan Post Insurance Co. will shy away from the cancer insurance business.
The U.S. insurance industry has argued that private companies face an unfair advantage if they have to compete against Japan Post Insurance, which is backed by the government. Aflac Inc. of the United States, which has a 70-percent share of the cancer insurance market in Japan, is particularly wary of Japan Post Insurance's potential emergence as a rival.
To join the TPP negotiations, Japan has to win the approval of all nine countries that are already parties to the talks.
Tokyo has already obtained the consent of Vietnam, Brunei, Chile, Peru, Singapore and Malaysia, and is holding talks with the United States, Australia and New Zealand to seek their approval.
The bilateral talks with the United States have been rocky. The insurance issue is regarded as a key obstacle, along with beef and automobiles.
Senior Foreign Ministry and industry ministry officials in Japan whooped for joy at the decision by the Japan Post group.
"That will clear away one of the pending issues," said one official.
A postal privatization review law, enacted in April, allows Japan Post Insurance to enter new businesses without government approval as long as it does not affect the Insurance Business Law. In such cases, Japan Post Holdings, which currently wholly owns Japan Post Insurance, must have sold at least half of its shares in the insurance subsidiary.
Japan Post Holdings is wholly owned by the government.
The postal privatization review law allows the government to retain more than a one-third stake--and therefore exert strong influence--in Japan Post Holdings, even if it decides to part with the remainder of its shares.
During talks in Washington on April 30 with Prime Minister Yoshihiko Noda, U.S. President Barack Obama singled out three issues that the United States regards as obstacles to the bilateral negotiations for Japan's participation in the TPP talks: insurance, automobiles and beef.
The insurance issue specifically refers to Japan Post Insurance's potential foray into the cancer insurance market.
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