The Financial Supervisory Commission said yesterday it had amended its regulations governing investments in Chinese securities by Taiwanese insurance companies. The new rules will take effect later this month.
The commission said in a statement on its Web site that the new regulations were designed to provide domestic insurers with more investment channels, while helping enhance the efficiency of fund utilization.
Under the amended regulations, local insurers planning to invest in Chinese securities must have operated for at least five years and have a risk-based capital (RBC) ratio of 250 percent or above. They must also have a risk-control mechanism and a chief risk officer, the commission said.
Moreover, the insurer must have securities holdings worth a minimum US$5 billion in its most recent fiscal year, the commission said.
The Chinese securities which Taiwanese insurers are allowed to invest in include stocks, corporate bonds, government notes, treasury bonds and exchange traded funds, the commission said.
The financial regulator said it was considering allowing Taiwanese insurers to increase to 10 percent the overseas investment limit in Chinese securities, according to the statement, but said it would cap investment in Chinese government notes and treasury bonds at 5 percent of an insurer’s overseas investment limit.
The commission said it would soon release the amended regulations for public review for seven days and would weight both public and administrative views before implementing the new regulations later this month.
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