The Disclosure Practices of Life Insurers

Akira Komatsubara

Introduction

With each release of financial statements by life insurers， the mass media today reacts with a stream of sensational stories assessing each firm's viability and providing "penetrating analy-ses" of their financial condition. Interest in information disclosure by life insurance companies has reached an unprecedented level.

This interest stems from the Big Bang financial reforms， which make policyholders and other users of financial services accountable for their decisions， and from the once unthinkable spectacle of seeing a life insurer become insolvent. After Nissan Life failed in April 1997， net liabilities initially valued at 200 billion yen quickly grew to 300 billion yen by May， while policyholders helplessly watched the value of their policies wither. One outcome of this was a swell in public interest to know the actual financial condition of life insurers.

The disclosure that is done by life insurers is generally considered sketchy and of little practi-cal use. In this paper， we look at the present status and issues regarding disclosure practices in the life insurance business.