Life insurance companies’ liability reserve interest rates on savings-type policies would be lowered by 25 basis points next year, which is expected to cause an average increase of 2 to 3 percent in premiums for new policyholders, Financial Supervisory Commission (FSC) Chairman Wellington Koo (顧立雄) said yesterday.
Koo’s latest announcement on the rate change came at a meeting of the Legislative Yuan’s Finance Committee, after he last week revealed his intention to modify the rate to improve insurers’ financial strength.
Asked about concern that the change might have a negative effect on sales of savings-type policies next year, as consumers would have to pay higher premiums, Koo said he is not worried, as life insurers “always manage to sell their products.”
The size of aggregate premiums increases more than NT$3 trillion (US$98 billion) a year on average, which means the industry has considerable funds, Koo said.
As most of the funds are invested in domestic bonds or overseas, the commission needs to lower the rates as 10-year US Treasury bond yields have declined this year, with Taiwanese goverment 10-year bond yields also falling, he said.
Some insurers have been urging people to buy policies before the end of this year, saying premiums would rise next year, Democratic Progressive Party (DPP) Legislator Wang Jung-chang (王榮璋) said, citing an online advertisement by Shin Kong Life Insurance Co (新光人壽).
Koo said the commission does not allow insurance companies to promote their products this way and would review the company’s marketing campaign.
Liability reserve interest rates are also known as discount rates, which insurance companies use to estimate their liabilities at the present value, the Insurance Bureau said.
As lower discount rates would lead to higher liabilities, they could drive insurers to raise premiums for new policyholders so as to gain more revenue to offset the increase in liabilities, the bureau said.
The change in discount rates is based on the policy periods, booking at 1.25 percent for New Taiwan dollar-denominated polices with periods shorter than six years; 1.5 percent for those between six years and 10 years; 1.75 percent for those between 10 years and 20 years; and 2 percent for those longer than 20 years, it said.
Discount rates for US dollar-denominated policies range from 1.75 percent to 2.5 percent, it said.
They would all be reduced by 25 basis points next year, the bureau said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day