Finance ministry relaxes rules for insurance firms

The Ministry of Finance yesterday relaxed restrictions on cross-strait financial links, allowing Taiwanese insurance companies to set up branches and subsidiaries there.

"The measure aims to increase domestic insurers' international competitiveness in reaction to the post-WTO challenge,'' the ministry's statement said.

Such a move will allow Fubon Insurance Co (富邦產險), the nation's largest property insurer; Cathay Life Insurance (國泰人壽), the nation's largest life insurer; Shin Kong Life Insurance Co (新光人壽); and Mingtai Fire and Marine Insurance (明台產險) to apply to China's regulators to set up branches once their previously approved representative offices complete two years of operations in China.

Because China has set down a minimum net-capital requirement of 200 million yuan (NT$800 million) for foreign insurers to set up subsidiaries there, the ministry sees no difficulties in allowing insurers to branch out under the 20-percent ceiling that Taiwan has laid down for China-bound investment.

Upon application, more local insurers can now follow suit and submit their branch-expansion plans to the ministry for review.