E N F O R C E M E N T   AND   C O M P L I A N C E

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What are these Agreements and what do they do?

Who benefits from these Agreements?

How can these Agreements help my company?

Can the U.S. Government help me if I have a problem?

How can I get more information?

What are these Agreements and what do they do?

In two agreements signed in 1994 and 1996, the Japanese Government committed to improving market access for foreign insurance providers by reforming the laws, regulations and administrative guidance that have impeded access in the past. Japan has the second largest insurance market in the world after the U. S. The foreign share of that market as of the end of 1998 was 4.9 per cent.

The Agreements consist of exchanges of letters between the U.S. Trade Representative and the Japanese Ambassador to the United States dated October 11, 1994, and December 24, 1996. They have no expiration dates. The Japanese Government has bound most of the commitments that it made in these bilateral Agreements under the WTO Understanding on Commitments in Financial Services.

Who benefits from these Agreements?

Any U.S. (or other foreign) insurance company that wants to sell its products and services in Japan can benefit from the deregulating that is occurring in connection with these Agreements.

How can these Agreements help my company?

Japan's insurance market consists of two primary sectors: life and non-life (property and casualty). A third sector includes specialized products such as cancer, hospitalization and personal accident insurance. This third sector has both life and non-life components. The third sector represents 5 percent of the domestic market. Foreign firms have approximately a 42 percent market share of this sector, with U.S. firms controlling about 90 percent of the life component and 40 percent of the non-life component.

The main U.S. objective in negotiating the U.S.-Japan Insurance Agreements was to improve access for foreign companies to Japan's primary insurance sectors through deregulation, which would include facilitating market entry, product innovation, and price competition. During the deregulation period, Japan would avoid "radical change" in the third sector. The 1996 Agreement listed five specific deregulation measures for the primary sector that would have to be in place by July 1, 1998, in order to start a 2.5 year countdown, at which time Japan would allow companies in the primary sector to enter the third sector. It is anticipated that this will occur on January 1, 2001.

Progress has been made in implementing the measures that were set forth in the two U.S.-Japan Insurance Agreements. These measures can be summarized as follows:

Transparency and Procedural Reforms

In the 1994 Agreement, the Japanese Government agreed to publish standards relating to the licensing of insurance providers and the approval of new products and rates. It also agreed to protect the confidentiality of information included in applications and notifications relating to licenses, products and rates.

The Japanese Government stated that it will "strongly request" insurance advisory groups to allow foreign companies to attend meetings and submit statements. It agreed that Japanese government agencies will give foreign insurance providers the opportunity to be informed of, comment on and exchange views with Japanese officials on measures that affect the provision of insurance in Japan.


In the 1994 Agreement, Japan agreed to expedite and simplify the process for reviewing applications for products and rates. The number of officials who process insurance applications would be increased. Permission to use flexible rates was expanded for certain products, and insurance brokers were allowed to operate in Japan.

More specific deregulation measures were spelled out in the 1996 Agreement. These included: allowing companies to sell automobile insurance by mail or telephone without meeting the consumer, and permitting payment for premiums by credit card; authorizing companies to offer commercial fire insurance at different rates by changing the minimum amount insured per contract; eliminating the obligation for companies to use rates calculated by rating organizations; and allowing applications for differentiated auto insurance (different rates, forms and methods of distributing insurance products based on risk factors).

"Mutual Entry"

Until 1996, life and non-life insurance firms were prohibited from doing business in each other's sectors. An Insurance Business Law enacted on April 1, 1996, allows competitive activity by subsidiaries.

Government Corporations

In the 1994 Agreement, Japan agreed to encourage government corporations to give foreign insurance providers access to their insurance programs on a nondiscriminatory basis.


Japan pledged in the 1994 Agreement that it would enforce its antitrust laws strictly in the insurance sector.

Can the U.S. Government help me if I have a problem?

Yes. If your company is experiencing difficulties providing insurance in Japan because the Japanese Government is not complying with these Agreements, contact the Office of Trade Agreements Negotiations and Compliance's hotline at the U.S. Department of Commerce. The Center can help you understand your rights under the Agreements, and it can alert the appropriate U.S. Government officials to help you resolve your problem. With your concurrence, the U.S. Government can also, if appropriate, raise the particular facts of your situation with the Japanese Government and ask Japanese officials to review the matter. Japan has also bound its commitments under the U.S.-Japan Insurance Agreements in the WTO.

How can I get more information?

The complete texts of the 1994 Measures by the Government of the United States and the Government of Japan Regarding Insurance and the 1996 Supplementary Measures by the Government of the United States and the Government of Japan Regarding Insurance are available on the Office of Trade Agreements Negotiations and Compliance's web site.

If you have questions about these Agreements or how to use them, you can e-mail the Office of Trade Agreements Negotiations and Compliance (TANC), which will forward your message to the Commerce Department's Designated Monitoring Officer for the Agreements. You can also contact the Designated Monitoring Officer at the following address:

Designated Monitoring Officer

U.S.-Japan Insurance Agreements

Office of Finance

International Trade Administration

U.S. Department of Commerce

14th Street & Constitution Avenue, N.W.

Washington, D.C. 20230

Phone: (202) 482 - 0346

Fax: (202) 482 - 5702

The Designated Monitoring Officer can also provide you with useful trade leads and contacts.

Information on the implementation of the U.S.-Japan Insurance Agreements is available in a report entitled "Implementation and Monitoring of the U.S.-Japan Insurance Agreements" that was issued by the General Accounting Office in September, 1999. You can obtain a copy by writing to the U.S. General Accounting Office, Box 37050, Washington, DC 20013 or by visiting the GAO's Home Page. The first copy of any GAO report is free.

You can obtain additional information by visiting the following web sites in the International Trade Administration of the Department of Commerce:

The U.S. Commercial Service, American Embassy, Tokyo The American Embassy in Tokyo helps U.S. companies enter the Japanese market and expand their sales there.

TANC offers these agreements electronically as a public service for general reference. Every effort has been made to ensure that the text presented is complete and accurate. However, copies needed for legal purposes should be obtained from official archives maintained by the appropriate agency.