A life insurance industry trade group is upset over a Japanese company’s application for approval to sell a cancer insurance product, saying Japan Post Insurance has an unfair advantage when selling against U.S. competitors in that country.

Frank Keating, president of the American Council of Life Insurers, said the trade group, representing about 340 insurers, is “particularly concerned” by the statements of Minister Kunio Hatoyama March 19, the day JPI applied for approval to sell the cancer product in Japan.

Hatoyama’s Ministry of Internal Affairs and Communications, which formerly was Japan Post’s parent ministry, is responsible with the Financial Services Agency for evaluating and ultimately approving JPI’s application.

According to the ACLI, Hatoyama was quoted as saying, “By all means, I would like to approve sales of the cancer insurance… I want this from the bottom of my heart.” The statement was made before the agency had even engaged in evaluating JPI’s application, which was filed March 19.

“It is both revealing and genuinely disturbing that the regulator set up by law to review the application should exhibit no regard for even the pretense of impartiality,” Keating said in a statement. “It demonstrates that the existing regulatory process clearly favors JPI. Just as troubling is the Minister’s public expression that the issues involved in processing JPI’s application, which implicate the depth of Japan’s bilateral and GATS (General Agreement on Trade in Services) commitments to national treatment, are ‘not for other countries to object to.’ Given Japan’s promises, this is an outrageous statement.”

JPI is government controlled and owned, but has recently been considered for privatization.

As U.S. insurance companies increasingly seek to globalize their sales, the potential for conflicts over regulation also grow.

Because the JPI product would compete directly with similar products offered by U.S. and other private insurers, the advantage that JPI would have over its strictly regulated private-sector counterparts from the U.S. is particularly worrisome, Keating said.

The Japanese government has pledged to provide a fair market before new products would be approved for the state-owned insurer, the ACLI said.

“A level playing field simply doesn’t exist,” ACLI President and CEO Frank Keating said in a statement.

The ACLI says consideration of an application under these circumstances would be a violation of Japan’s international commitments.

“In addition to our industry, the world is watching what Japan’s government will do. We intend to firmly and persistently insist on adherence to the commitments Japan has made,” said Keating.