Yamato Life Insurance, a Japanese insurer with nearly JPY269 billion in liabilities, has filed for bankruptcy protection, making it the first Japanese financial institution to fall in the current global financial crisis.
A decline in the value of securities holdings has been stated as one of the reasons for widening losses exceeding nearly JPY11.5 billion. The company is expected to post a net loss of JPY11 billion in the first half of 2008.
According to the Daily Yomiuri Online, the management of the company, including the president Takeo Nakazono are expected to resign from their positions. The company may select a sponsor under an administrator to oversee the rehabilitation process.
The policy holders of the company cannot cancel their commitments until the company’s rehabilitation plan is approved by the court, however the insurance payouts will be guaranteed during the process. According to reports, the Life Insurance Policyholders Protection Corporation of Japan will protect about 90% of the company’s liability fund reserved for possible insurance payouts.