The Ministry of Finance is planning to raise the cap on domestic insurers' overseas investments to increase investment returns, a Chinese-language newspaper said yesterday.
Under the new plan, the ministry may by January raise its 20 percent limit on how much of their total assets insurers can invest overseas to at least 35 percent, the paper said, quoting Wei Pao-sheng (
DPP lawmaker Yu Jan-daw (
Wei also announced new measures -- such as more flexibility in the utilization of income from the cut on life insurers' business tax -- to help strengthen insurers' financial structure, after Cathay Life Insurance Co (國泰人壽), the nation's biggest life insurer, and others on Monday posted losses on stockholdings.
Cathay Life yesterday reported it took a one-time charge of NT$7 billion in the first nine months to provide for short-term investment losses. It posted third-quarter profit of NT$1.13 billion.
The government is mulling suggestions to raise the limit to as high as 40 percent, said Kao Fu-yuan (
``The main point is to allow the companies to set aside money to strengthen their capital structure,'' Kao said.
Cathay and Shin Kong Life Insurance Co (
Taiwan's central bank cut its key interest rate 13 times between December 2000 and June. The TAIEX fell 24 percent in the first nine months of this year.
Cathay Life expects the tax cut to yield it about NT$800 million (US$23 million) in annual savings, said Lee Chang-ken (
``We can move funds overseas into assets with higher returns,'' he added.
Shin Kong Financial Holdings Co (新光金控), which owns Shin Kong, more than doubled its net loss forecast to NT$19.3 billion for this year, it said in a statement on Monday to the Taiwan Stock Exchange.
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