Wed, Mar 18, 2009 - Page 4 News List

Chunghwa Post reviewing rates on insurance products

HIGH INTEREST Given the high assumed rates it offers, ranging from 2 percent to 2.75 percent, the firm has a large base of life insurance clients

By Shelley Shan  /  STAFF REPORTER

Chunghwa Post Co said yesterday it was still conducting a review of the company’s insurance life products and the interest rates they offer and had not made a decision on whether to suspend some products.

Company vice president Yen Yung-an (閻永安) said that the post office is required by law to review the interest rates of all postal life insurance products.

Yen said that the review was focused on insurance products that offer high periodic income payments given their relatively high assumed interest rates of between 2 percent and 2.75 percent.

SIX-YEAR PRODUCTS

The most popular product is the six-year life insurance policy, with the assumed interest rate topping 2.75 percent. This compares with a fixed interest rate of less than 1 percent offered by most banks in the country.

Yen said the post office had to consider various factors, including prevailing market conditions, before making any changes to the postal life insurance products.

Last year, the post office was rated the nation’s fifth-largest life insurer, after Cathay Life Insurance, Nan Shan Life, Shin Kong Life Insurance and Fubon Life Insurance.

POLICYHOLDERS

The post office has about 2.5 million life insurance policyholders, of which approximately 1.4 million hold six-year life insurance policies.

Revenue generated through sales of postal life insurance topped NT$14.01 billion last year.

The post office has suspended some of its life insurance products in the past, with some of them having an assumed interest rate of up to 3.25 percent.

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