萬國法律事務所

In order to assist domestic financial institutions to expand overseas, the Financial Supervisory Commission plans (FSC) to ease regulations to allow an insurance company to invest more than 40% of its owner's equity in its portfolio companies. This new policy strengthens the insurance companies’ power to conduct overseas M&A activities. In addition, the Insurance Bureau also announced that an insurance company with its average RBC reaching 250% or above in the most recent three years or with its net worth reaching 6% of its total assets in the most recent financial statement, can merge overseas banks. Many insurance companies are qualified, but they still have to provide evidence to prove that they have
professional ability to manage banks.

Furthermore, FSC also adopted US’s “instant takeover measure.” Under such policy, FSC will take control of an insurance company if its RBC is under 50% and its net worth is positive. The new amendment further allows insurance companies or their representatives to be elected as a director or supervisor of their invested companies, which shall be related to public construction or social welfare. In addition, FSC eased regulations to allow banks to do insurance broker or agent business because banks used to earn more than 2 billion commissions by investing in insurance broker or agent companies, but did not have to deal with the insurance policy disputes, which is not beneficial to consumers.

With respect to overseas real property, FSC also preliminarily promulgated new “Regulations Governing Foreign Investments by Insurance Companies.” Under such new policy, qualified insurance companies can purchase overseas real property first and report to FSC afterwards. With the above relaxed regulations, Taiwan’s insurance companies will have strong competitiveness to conduct cross-broader transactions or investments.