The nation's financial regulator is considering loosening restrictions on domestic insurers' overseas investments, saying that the move can grant them more autonomy to pursue better profitability.
The ceiling on available funds, or working capital, that domestic insurers can invest in overseas markets will be raised from the current 35 percent to a proposed 50 percent, said Lu Daung-yen (
"We agreed to the easing of the rule during a meeting on Monday, which was convened to seek consensus" between the commission and the central bank, Lu said. However, he said the two are far from reaching a decision.
Lu said the commission and the central bank plan to undergo several rounds of exchanging official documents to detail the change. The final decision will soon take shape and be included in an amendment to the Insurance Law (
"I cannot predict the timetable as to when the new rule will be put into effect," he said.
According to the commission's statistics, domestic insurers' available funds have surpassed NT$5 trillion (US$160 billion). With the ratio to be raised by 15 percentage points to 50 percent, insurers will be able to divert at most NT$750 billion overseas, on top of the original amount of money.
Lu yesterday shrugged off market speculation that the proposal is aimed at easing pressure on the New Taiwan dollar to appreciate against its US counterpart, saying the move is designated to allow insurers more flexibility to make investments.
Lee Chang-ken (
Cathay Life now has available funds of NT$1.6 trillion. After the new rule takes effect, it expects to increase its overseas investment portfolio by up to NT$240 billion.