In The prodigal West, the steady thrift of the Japanese is widely admired. But at home, Japan's consumers are getting progressively less thanks for their parsimony. In early November, the nation's chief financial regulator, Hideyuki Aizawa, called for legislative changes to allow life-insurance companies to cut the annual payouts that they have promised to their policyholders. Payout rates now average 3.5% a year. That is far in excess of what insurers can earn, in Japan's low-interest-rate environment, from investing their premiums. So far this year four life insurers have gone bust trying to make these awkward ends meet, and others will follow. Mr Aizawa wants to bail out the ailing companies, arguing that policyholders will be better off with their returns cut than with their companies collapsing. Japan's bankruptcy laws allow failed insurers to shave underlying policies when they mature and to cut annual payouts.
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