The Financial Supervisory Commission (FSC) said yesterday it would extend the government’s receivership of Kuo Hua Life Insurance Co (國華人壽) for another nine months, beginning on Nov. 4.
The move marked the third time the receivership has been extended, as the current one is due to expire early next month and there remains no immediate solution to the impasse over compensations and other issues that hinder Taiwan Financial Holding Co’s (台灣金控) plan to acquire the insolvent life insurer.
The financial regulator took control of the insolvent life insurer on Aug. 4, 2009, and appointed the semi-official Insurance Stabilization Fund (ISF, 保險安定基金) its official receiver.
The fund will be the receiver until Aug. 3 next year under the latest extension, the commission said. Kuo Hua was the first local life insurer to be brought under government receivership in 40 years.
The FSC voiced objection to a legislative bill that would grant back wages to the priority claim in bankruptcy cases.
The planned legal revision, if approved, would devalue banks’ collateral, prompting them to stiffen lending terms in order to meet statutory requirements, the commission said.
That in turn may lead to a credit crunch for medium- and small enterprises since bank loans account for 78 percent of corporate financing, the FSC said.
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