Japanese Regulators Shut Down Insurer

A medium-sized life insurer plagued with bad debts today was ordered shut down, the first time in 50 years that Japanese financial regulators forced an insurer to close. Finance Minister Hiroshi Mitsuzuka said the liquidation of Nissan Mutual Life Insurance Co. was an isolated case stemming from bad investments. Japan’s financial industry has been shaken by a massive bad debt problem left over from the wild speculative spending of the late 1980s, when land and stock prices soared before crashing in the early 1990s. Hanwa Bank, a regional bank in western Japan on the verge of collapsing under a heap of bad debt, was ordered shut down last November--the first commercial bank to be ordered closed in 50 years. In an effort to keep up with the rest of the world, Japan has recently announced a reforms of its financial sector, including allowing banks to enter the securities business and freeing up stockbrokers’ commissions. A Nissan Life spokesman said the company, which was not publicly traded, had assets of about $16.6 billion.