Tue, May 14, 2013 - Page 14 News List

FSC extends Global Life ban to cover local shares

By Crystal Hsu  /  Staff reporter

The Financial Supervisory Commission (FSC) has banned Global Life Insurance Co (國寶人壽) from making new investments in local shares after the unlisted insurer failed to heed the regulator’s warning not to interfere with Long Bon International Co’s (龍邦) board reshuffle.

The restriction will make it more difficult for Global Life to reverse its poor financial showing as the insurer has already been banned from making property investments.

The commission’s Insurance Bureau posted the ban on its Web site on Friday and may hand out further punishments as an ongoing probe pans out, Joanne Tseng (曾玉瓊), director-general of the commission’s Insurance Bureau, said by telephone.

Global Life angered the commission on Tuesday last week by casting its vote in the board election at Long Bon, a Greater Taichung-based firm which primarily engages in hotel services and property leasing and distribution.

Insurers are not allowed to influence the management decisions of companies in which they own stakes to bolster their investment gains.

Global Life has also been prohibited from making new overseas investments, the commission said, adding that the insurer cannot exercise its voting rights in other companies in which it owns shares.

Global Life’s current local holdings total about NT$26.43 billion (US$83.46 million), accounting for 50.33 percent of the company’s working capital of NT$52.52 billion, local media reported.

The stock purchase ban, which does not apply to Exchange Traded Funds and Grade-A bonds, will stay in place until Global Life shows improved internal oversight, the FSC’s insurance bureau said.

Global Life incurred a net loss of NT$3.16 billion last year and failed to meet minimum capital adequacy requirements.

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