The Financial Supervisory Commission (FSC) yesterday fined Chaoyang Life Insurance Co (朝陽人壽) NT$6 million (US$181,615) and issued three citations for a number of irregularities.
The troubled insurer faces being placed under government receivership as soon as the first quarter of next year, the commission said.
The insurer would be placed under government receivership if it fails to raise its risk-based capital (RBC) ratio to more than 50 percent within 90 days of Dec. 31, the commission said.
The RBC ratio is a measure of a company’s financial strength. At the end of the third quarter, Chaoyang Life, which currently has about 100,000 policy holders, said its negative net worth had expanded to NT$2.2 billion.
Although the insurer’s board of directors in September approved a NT$1.55 billion capital increase plan, the commission said that the amount is not sufficient to cover the company’s negative net worth.
Chaoyang Life’s capital increase plan is backed by a plot of land adjacent to Taichung’s Chaoyang University of Technology (朝陽科技大學), where the insurer plans to build a student dormitory and commercial complex and raise funds through rental fees, the company said last month.
The company has also readied a NT$500 million cash injection, it said.
Among the infractions that led to the commission’s imposition of fines on the company were irregularities relating to its purchase of a plot of undeveloped land, as Chaoyang Life had failed to generate the required investment returns from the parcel.
In related news, despite appeals by the Life Insurance Association of the Republic of China (壽險公會) for RBC requirements to be eased to help companies weather heightened volatility in global markets, the commission’s Insurance Bureau seems to be gearing up to impose more stringent guidelines on the sector.
Insurers said that their efforts this year to increase capital would be nullified by the bureau’s intent to raise the interest rate and C3 market risk components of the RBC metric for annuities from 0.1 times to 0.3 times.
Mercuries Life Insurance Co (三商美邦人壽) said that its NT$1.7 billion capital increase plan was expected to elevate its RBC ratio by at least 10 percent, but following the change, newly raised funds through its issuance of 100 million new shares at NT$17 each would barely make a difference to its RBC ratio.
Other insurers said that they would have no option but to reduce their holdings of more risky assets in order to meet the new RBC requirements set to take effect next year.
“We found no compelling reasons to grant insurers eased RBC requirements,” Insurance Bureau Director-General Jenny Lee (李滿治) said, adding that the bureau intends to continue raising the C3 rate on an annual or biannual basis.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS