ABSTRACT
This chapter discusses when and under what process Japanese corporate governance style emerged in the life assurance business, and helps to understand its distinctive features from historical perspective. Japanese life assurance companies intensified sales competition by sheer force of numbers. Life assurance companies in the pre-war period enjoyed a free-hand over their life funds. Life assurance companies in the post-war period had to obey guidelines on investments, as stipulated by the authorities. Since profits from securities should be transferred into a reserve fund, life assurance companies selected so-called 'gentle' investment policies, which preferred long-term capital gains to short-term dealing. The chapter focuses on internal corporate governance style rather than corporate behaviour as a stakeholder. As a result, the role of shareholders in the internal corporate governance of major life assurance companies was completely swept away. Such a system indicates the different style of corporate governance between the United States and Japan.
