The nation's insurance companies are asked not to exploit the premium pool to acquire or control other companies for their own interests, the Financial Supervisory Commission said yesterday after unveiling a package of
self-discipline regulations at a press conference.
The new regulations were mapped out by the Cabinet-level commission following a month-long consideration in order to prevent insurers from getting involved in the management of invested firms through financial investment.
Currently, some insurers like China Life Insurance Co (中國人壽), Shin Kong Life Insurance Co (新光人壽) and Fubon Life Assurance Co (富邦產險), have designated representatives as board directors of invested firms.
Susan Chang (張秀蓮), the commission's vice chairperson, said a few insurers do violate one clause of the new regulations. But she didn't specify who these companies are.
The clause she referred to stipulates that the insurance companies and their subsidiaries can take no more than a total of a quarter, or two seats at the
most, on the invested companies' board of directors.
The investments must be categorized as the insurance companies' long-term investment items, the clause reads.
Under the new regulations, Shin Kong Life, which controls 10 percent of
shares as well as six seats of Shih Kong Insurance C新光產險) board of directors, may need to give up four seats in a bid to comply with the stipulation as soon as it becomes effective.
Violators would be fined between NT$200,000 and NT$600,000, according to the regulations.
Hsu Pon (許澎), spokesman of Shin Kong Financial Holdings Co (新光金控),
which is the parent company of both insurers, was not available for comment as of press time.
The self-discipline regulations were approved by the commission in principle
yesterday and will be put into practise in the near future, Chang said.
RSS