Thu, Jul 15, 2004 - Page 11 News List

FSC eyes Asia market for insurers

MORE COVERAGE The government's supervisory body is pushing insurance companies to internationalize as it seeks to make Taiwan a major financial-service hub

By Joyce Huang  /  STAFF REPORTER

While briefing over 200 representatives from the nation's insurance industries on new regulatory changes, Cabinet-level Financial Supervisory Commission Chairman Kong Jaw-sheng (龔照勝) yesterday vowed to facilitate the private sector's expansion plans to bank on shares in the Asia-Pacific markets.

"We hope to help develop at least one to three domestic insurers into regional key players in a bid to meet the goal of upgrading Taiwan into a financial-service hub in the Asia-Pacific region," Kung told reporters yesterday afternoon after chairing a meeting to exchange views with local insurers.

Using the success of Cathay Life Insurance Co (國泰人壽) as an example, head of the commission's insurance bureau Mark Wei (魏寶生) yesterday said that, in the future, he hopes to see more Taiwanese insurers squeeze into the Fortune 500 list. Cathay Life is poised to be on the list.

Wei added that his bureau will make efforts to help the sector branch into overseas markets including those in Vietnam, India, Bermuda and the US.

He also highlighted long-term challenges facing the sector, including a lack of insurance expertise, such as actuaries.

More know-how and talent is needed in specific insurance positions to upgrade the sector's innovation capabilities to meet the goal of developing Taiwan into an asset management hub.

Furthermore, Kong yesterday reiterated his organization's policies to liberalize and internationalize the local financial sector to beef up its competitiveness locally and internationally.

Wei noted that he is satisfied with the country's internationalized life-insurance sector, with foreign participants taking up at least 11 percent of local market share.

But he expressed dissatisfaction with internationalization of the nation's property-insurance sector, with foreign participants making up only 4 percent of market share.

Stressing the importance of self-discipline and corporate governance principles to prevent financial irregularities, the banker-turned-chairman also added that the commission is drafting a single law -- the financial service industry law, which would incorporate regulations for all financial industries including the banking, securities and insurance sectors.

The commission plans to push forward the law within the next two years, Kong said.

Urging the insurance industry to highlight the importance of financial-product innovation, Kong said that the sector has played an important role in the country's development of its financial service industries.

According to Kong, the insurance sector had over 410,000 employees with NT$1.24 trillion in premium incomes as of last December while accumulating a total of NT$4.9 trillion in assets.

Despite acknowledging the commission's efforts in providing better regulatory services, most participating insurers at yesterday's event expressed opposition to its charging a 0.03 percent supervision fee.

In addition, they urged the government to allow insurers to take part in the future management of the nation's labor pension fund scheme, which may translate into NT$500 million-worth of business opportunities for insurers and other financial institutions each year.

In response, Wei said that insurers and other businesses should have no problem taking part in the pension fund's management once the scheme is facilitated by the government.

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