Sat, Jan 08, 2011 - Page 12 News List

FSC wants foreign insurers to invest for the long term

By Crystal Hsu  /  Staff Reporter

Foreign insurance companies must demonstrate their long-term commitment when investing in Taiwan, the Financial Supervisory Commission said yesterday.

“Foreign insurance firms mustn’t think they can come and go anytime they want,” Huang Tien-mu (黃天牧), director-general of the commission’s Insurance Bureau, told a media briefing.

“That would be unfair to Taiwanese policyholders,” Huang said, adding that the commission would serve as a “prudent guard” to safeguard local policyholders’ interests.

Huang made the remarks in response to criticism that the commission has blocked foreign insurers’ efforts to pull out of Taiwan in the wake of the global financial crisis and forthcoming international accounting rule changes.

US insurance giant American International Group Inc has sought unsuccessfully to sell a 97.57 percent stake in its Taiwanese subsidiary, Nan Shan Life Insurance Co (南山人壽).

British insurer Aviva PLC is also considering selling its 49 percent stake in First-Aviva Life Insurance Co (第一英傑華人壽), a two-year joint venture with First Financial Holding Co (第一金控), amid disagreements over operations and product strategy.

“We have yet to reach a conclusion on the Aviva case before it can satisfy our questions,” Huang said. ‘

Huang said two years is too short for the British insurer to fulfill its long-term commitment.

He said it was not uncommon for foreign insurers to pull out, with more than a dozen cases since 1991. He attributed the recent exodus to stricter capital requirements as a result of the international accounting rule changes.

“In fact, one or two foreign firms are contemplating re-entering the Taiwanese market,” he said, but declined to elaborate.

The commission also refused to comment on the ongoing bidding for Nan Shan Life.

FSC Chairman Chen Yuh-chang (陳裕璋) said the commission would not comment on moves by potential buyers as its comments might be misinterpreted.

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