ACLI CAUTIOUSLY OPTIMISTIC ON NEW DRAFT POSTAL PRIVATIZATION PLAN.

(Full text of statement. Contact details below.)

WASHINGTON, Aug. 31 /PRNewswire - AsiaNet/ --

A new draft report released on August 31 by Japan's Council on Economic and Fiscal Policy (CEFP) that sets forth a plan for privatizing Japan Post's Kampo insurance operations contains positive new recommendations, says ACLI President and CEO Frank Keating.

"ACLI must, of course, reserve judgment until the CEFP's privatization plan is complete," said Keating, "but we are encouraged by some of the recommendations which appear in this draft."

The CEFP, the Prime Minister's advisory body in Japan, was entrusted with crafting a plan for privatizing Japan's giant postal businesses -- including Kampo, the world's largest life insurer. Private sector insurers, both foreign and domestic, have warned that Kampo must operate on a "level and fair playing field" before it is permitted to expand the range of life insurance products it sells.

While not a complete privatization plan, the CEFP draft endorses the principle of ensuring equal competitive footing between a privatized Kampo and the private insurance sector from the beginning of a transition period set to begin in 2007. The report states that "from the beginning of the transition period," the new companies will be placed under the same regulations and supervision as private firms, have their government guarantees abolished and have obligations such as those of paying taxes and participating in safety net programs.

"These recommendations clearly move in the right direction. At the same time, the draft basic policy contains ambiguities and unresolved issues, which could be problematic. It does not make clear the recommended organizational structure of the privatized Kampo or the extent to which the various postal businesses will be completely separated. The degree to which income from Kampo's existing policies, backed by a government ...