The Taiwan Insurance Guaranty Fund (TIGF, 保險安定基金) said yesterday it would auction off troubled Kuo Hua Life Insurance Co (國華人壽) today after halting the sale last month after an injunction order.
“The fund has decided to auction off Kuo Hua anew after the court overturned the injunction on Nov. 2,” TIGF said in a statement.
The fund has acted as receiver for Kuo Hua since Aug. 4, 2009, at the request of the Financial Supervisory Commission.
Last month, the insurer’s former owner, Wong Da-ming (翁大銘), challenged the legality of the auction.
Wong accused TIGF and the commission of an illegal tradeoff by reportedly agreeing to grant the winning bidder NT$100 billion (US$3.43 billion) in compensation to cover losses and free the buyer from capital increase requirements for the next 20 years.
TIGF said it respected Wong’s right to freedom of speech, but the auction was being carried out legally.
Chinatrust Life Insurance Co (中信人壽), Taiwan Life Insurance Co (台灣人壽) and Mercuries Life Insurance Co (三商美邦人壽) are reportedly interested in the company, which has NT$75.3 billion (US$2.57 billion) in net losses, with liability costs averaging 4.5 percent as of September.
The winning bidder is expected to receive record compensation of between NT$80 billion and NT$100 billion from TIGF to cover losses and negative interest spreads.