Stop destroying insurance cooperatives!

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Stop destroying insurance cooperatives!
Akahata, editorial (excerpts)

Many insurance cooperatives (kyosai) are being negatively affected by the revised Insurance Business Law that is to place restrictions on these cooperatives by regarding them as insurance companies.

An insurance cooperative is not like an insurance company that seeks profits from its business with the general public.

However, the new system requires most of the insurance cooperatives to raise capital of at least 10 million yen, hire insurance experts, deposit security money, and pay corporate taxes.

These are burdens too heavy to bear for these cooperatives in which members chip in and voluntarily take part in the management so as to minimize the running cost to return to members most of their membership dues.

To cite an example, a cooperative in which parents of mentally retarded children pool 1,000 yen each a month provides its members with subsidies for private nurses and beds. This mutual assistance really supports these parents and children, since most of insurance companies refuse to contract with the intellectually-disabled.

A National Federation of Traders and Producers Organizations-run cooperative (Zenshoren) in which members chip in 1,000 yen a month provides its members with some money for hospitalization and money for childbearing. It also provides medical checkups. In this way, small business owners support each other in the severe business environment.

The government has explained that the purpose of revising the Insurance Business Law is to protect consumers from fraudulent business disguising themselves as insurance cooperatives. If so, it is obviously wrong to prevent the activities of these cooperatives by applying the revised law which is supposed to protect consumers' interests.

However, in the background of this move is a scheme by Japanese and U.S. insurance industries seeking to expand business opportunities through restrictions imposed on insurance cooperatives.

The U.S. government in its Annual Reform Recommendations under the U.S.-Japan Regulatory Reform and Competition Policy Initiative requests Japan to apply the Insurance Business Law to all insurance cooperatives. The U.S. Recommendations last year urged Japan to impose the same restrictions as insurance companies on such insurance cooperatives as labor unions' mutual aid programs that are currently exempted from the Insurance Business Law.

It will be a great loss for Japanese society to allow insurance industries take a big bite out of people's voluntary mutual aid associations.

The Japanese Communist Party is demanding that the government exempt voluntarily-run insurance cooperatives from the Insurance Business Law.
- Akahata, October 13, 2006