Over the past few years, the government has made a number of efforts to maintain discipline in the nation’s financial sector. In addition, the Financial Supervisory Commission (FSC) has tried to avoid looking like a paper tiger. Unfortunately, the commission’s latest punitive action against Global Life Insurance Co shows otherwise.
According to a statement posted on the commission’s Web site on May 10, it decided to ban Global Life from investing in shares of listed companies, with the exception of exchange traded funds (ETF) and Grade-A bonds, and prohibit the unlisted insurer from making new overseas investments for violating the Insurance Act (保險法).
The punishment came after Global Life on May 6 cast its vote in a board of directors election at the publicly listed Long Bon International Co, a Greater Taichung-based investment holding company which has subsidiaries including Taiwan Life Insurance Co, King Dragon Life Insurance Co and Reiju Construction Co.
Under the Insurance Act, insurers are not allowed to influence the management of companies in which they own stakes.
According to local media reports, Global Life had earlier promised the commission it would not interfere with the management of Long Bon.
However, this insurer was found to have not only voted during Long Bon’s shareholders’ meeting, but also supported its favored candidates to be elected to the board.
The commission’s disciplinary action against Global Life serves as a reminder to local insurance companies that they must abide by the law while conducting investments.
Despite no government receivership being considered, the commission’s actions are seen as a warning to Global Life — which has seen its financial structure deteriorate in recent years, with a negative net value of NT$20.92 billion (US$696 million), a net loss of NT$3.16 billion and a capital adequacy ratio of below the required 200 percent minimum last year — that it should not use policyholders’ money recklessly.
A closer look at the commission’s disciplinary action also shows the regulator’s effort to halt Global Life’s rumored attempts to acquire Taiwan Life Insurance Co through its investment in Long Bon, as the former is reportedly eyeing Taiwan Life’s ample funds to help it turn around its fortunes.
However, to provide an effective deterrent, the commission’s penalties have to be more severe.
What is needed is the removal of top management at Global Life because they have broken their pledge not to influence Long Bon’s management.
Moreover, if those at the top are found to not have real authority but are a mere rubber stamp for major shareholders, the commission must find out who the real players behind the scenes are and mete out punishment to them as well.
The financial regulator should also consider punishing Global Life for its continued failure to obtain fresh capital to improve its financial structure and closely monitor the company’s progress to seek a constructive way to exit the market.
Two other local insurers, Singfor Life Insurance and Chaoyang Life Insurance, have also seen their net value fall into negative territory, which means that the commission should also pay close attention to these firms.
The commission should not be discouraged from taking punitive action against Global Life, but it should take action that is severe enough to prevent market irregularities.
What the public wants to see is a financial regulator that has real teeth and is able to ensure rigorous market discipline and corporate governance.
The saga of Sarah Dzafce, the disgraced former Miss Finland, is far more significant than a mere beauty pageant controversy. It serves as a potent and painful contemporary lesson in global cultural ethics and the absolute necessity of racial respect. Her public career was instantly pulverized not by a lapse in judgement, but by a deliberate act of racial hostility, the flames of which swiftly encircled the globe. The offensive action was simple, yet profoundly provocative: a 15-second video in which Dzafce performed the infamous “slanted eyes” gesture — a crude, historically loaded caricature of East Asian features used in Western
Is a new foreign partner for Taiwan emerging in the Middle East? Last week, Taiwanese media reported that Deputy Minister of Foreign Affairs Francois Wu (吳志中) secretly visited Israel, a country with whom Taiwan has long shared unofficial relations but which has approached those relations cautiously. In the wake of China’s implicit but clear support for Hamas and Iran in the wake of the October 2023 assault on Israel, Jerusalem’s calculus may be changing. Both small countries facing literal existential threats, Israel and Taiwan have much to gain from closer ties. In his recent op-ed for the Washington Post, President William
A stabbing attack inside and near two busy Taipei MRT stations on Friday evening shocked the nation and made headlines in many foreign and local news media, as such indiscriminate attacks are rare in Taiwan. Four people died, including the 27-year-old suspect, and 11 people sustained injuries. At Taipei Main Station, the suspect threw smoke grenades near two exits and fatally stabbed one person who tried to stop him. He later made his way to Eslite Spectrum Nanxi department store near Zhongshan MRT Station, where he threw more smoke grenades and fatally stabbed a person on a scooter by the roadside.
Taiwan-India relations appear to have been put on the back burner this year, including on Taiwan’s side. Geopolitical pressures have compelled both countries to recalibrate their priorities, even as their core security challenges remain unchanged. However, what is striking is the visible decline in the attention India once received from Taiwan. The absence of the annual Diwali celebrations for the Indian community and the lack of a commemoration marking the 30-year anniversary of the representative offices, the India Taipei Association and the Taipei Economic and Cultural Center, speak volumes and raise serious questions about whether Taiwan still has a coherent India
RSS