Local insurance companies may be allowed to set up branches and subsidiaries in China next month after the government completes the drafting of legal measures, an official at the Mainland Affairs Council (MAC) said yesterday.
James Chou (周慶生), deputy director at the economic department in the MAC, said the Executive Yuan approved plans proposed by the Ministry of Finance on Tuesday, allowing local insurers to branch out or establish subsidiaries in China by way of direct investment.
Chou said the Cabinet's move is in line with the conclusions reached during last August's Economic Development Advisory Conference (
"The only thing pending is the method and details related to investment controls, which should be established very soon, in less than a month, followed by an announcement,'' Chou said.
An official from the insurance department of the Ministry of Finance said the department is speeding up its efforts to write the regulations and hopes the ministry will be able to submit the draft for approval to the Cabinet by the end of the week.
After that, the draft will still need the approval of the legislature.
Several local insurers -- including the Cathay Financial Holding Co (國泰金控) the Cathay Life Insurance Co (國泰人壽), the Shin Kong Financial Holding Co (新光金控), the Shin Kong Life Insurance Co (新光人壽) the Fubon Financial Holding Co (富邦金控) and the Fubon Insurance Co (富邦產險) -- have had representative offices in China for over a year.
Representative offices establish an insurer's presence, although they cannot sell services.
Taiwan's insurers want to expand into the world's most populous nation, as competition intensifies in Taiwan, with the financial industry being increasingly deregulated after Taiwan's WTO accession on Jan. 1.
Under the government's proposal, an insurer's total investment in insurance-related businesses, branches and foreign companies in China must not exceed 40 percent of its paid-up capital, less its accumulated losses, Chou said.
Separately, the official said that the reason the government isn't letting banks set up branches in China is because there's no urgency.
Since May, Chang Hwa Bank (彰化銀行) and United World Chinese Commercial Bank (世華銀行) have opened representative offices in China, with six more awaiting approval from Chinese authorities.
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