Rules Relaxed for Funds Use by Insurance Companies

        On Dec. 5, the Financial Supervisory Commission (FSC) implemented a relaxation of rules governing the utilization of funds by insurance companies, a move which is expected to encourage the investment of about NT$70 billion in the securities, real estate, and other markets. This will add greatly to the efficiency of funds utilization in the insurance industry.

Under a new FSC revision of the Regulations for Credit Lines Extendable by Insurance Enterprises in Making Loans to and other Transactions with the Same Person, with the exception of government agencies the ceiling on the sale or purchase of securities, real estate, or other assets conducted by an insurance enterprise with the same person, same interested party, or same affiliated enterprise, is raised from 30% to 35% of stockholder equity in the insurance enterprise, and the ceiling on the aggregate amount of such transactions is boosted from 60% to 75% of stockholder equity. The ceiling on the total amount of transactions with stakeholders remains unchanged at 40% of stockholder equity.

In response to the needs of insurance enterprises with relatively low amounts of equity, the ceiling is maintained at NT$100 million for single transactions and NT$200 million for aggregate transactions. This will offer local small and medium enterprises as well as foreign insurance companies with greater flexibility in the utilization of funds. For the content of the revision, please visit these websites: http://www.fscey.gov.tw/ct.asp?xItem=2113454&ctNode=17&mp=2, and http://www.fscey.gov.tw/ct.asp?xItem=2070435&ctNode=19&mp=2.

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