10/20 03:06 Kyoei Life to File for Court Protection, Insurer Says (Update1) By Tomomi Sekioka with reporting by Teo Chian Wei

Tokyo, Oct. 20 (Bloomberg) -- Kyoei Life Insurance Co., Japan's 11th-largest life insurer, said it will file for court protection from creditors.

Kyoei Life spokesman Masahiro Takami declined to give further details, saying the company would hold a media briefing at 6:30 p.m. Japan time today.

Japanese life insurers are struggling to boost capital and improve their finances as they pay out more money on policies -- most of which were sold when interest rates were higher -- than they can make from their investments amid the country's near-zero interest rates.

Kyoei -- which had assets of 4.6 trillion yen ($42.4 billion) as of March 31 -- is the second insurer to seek court protection this month. Chiyoda Life Insurance Co., Japan's 12th largest life insurer, filed for bankruptcy on Oct. 9.

Chiyoda Life's assets exceeded its liabilities by more than 34.3 trillion yen in liabilities exceeding assets.

Kyoei in June said Prudential Insurance Co. of America would buy 30 billion yen ($277 million) in new shares, becoming its largest shareholder with a stake of less than 20 percent.

A Prudential spokesman declined to comment.

In June, Kyoei said the value of its new policies for individuals fell 19.4 percent to 4.5 trillion yen, while policy cancellations increased 1.2 percent on a year ago.

Kyoei in August said it would sue Daiichi Mutual Fire & Marine Insurance Co. -- which collapsed in May -- for 29.3 billion yen it invested in the insurer last year.

Reports that Kyoei may seek protection hurt bank stocks, amid investor concern the lenders may have loaned it money.

Mizuho Holdings Inc. fell 17,000 yen to 813,000 yen and Bank of Tokyo-Mitsubishi Ltd., Japan's largest commercial lender, fell 18 yen to 1,272 yen.

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-- Carl Jenkins (Somewherepress@aol.com), October 20, 2000

Answers

The falling of dominoes is starting to pick up the pace in Japan. Ten years ago when there stock market was inflated to 40,000 they were buying up America. My how things have changed. I'm not sure of the intricacies of the macroeconomic impact of spreading corporate bankruptcies in Japan because they just carry uncollectible debt on there books for years without writing it off. So I don't know if there is really any measurable impact when they finally do file for bankruptcy. Anybody have any wisdom on the subject?

-- Guy Daley (guydaley@altavista.com), October 20, 2000.

Here's my "wisdom" (opinion) on this subject. Insurance companies invest $. I would assume that since the US market has been so hot, alot of their investment has been here. Our troubles of late are undoubtedly having an effect and if I'm right they will have to unload US equities etc.-if they haven't already. poconojo

-- poconojo (jberman478@aol.com), October 20, 2000.