[0] Taisho Life suspected of deceiving policyholders.

As Taisho Life Insurance Co. began bankruptcy proceedings Tuesday, after being ordered by the Financial Services Agency (FSA) to suspend part of its operations a day earlier, some people in the nation's insurance industry are asking whether the firm's management lied to insurance policyholders and the government as to the company's financial viability.

The insurer continued to operate, even though it was being swindled out of 8.5 billion yen, by three times boosting its capital during the seven months after the corporate financial crisis initially surfaced in January. The crisis led to the fourth collapse of a life insurance company since World War II.

However, management continued to stress that the company was …