The Legislative Yuan's finance committee reached a consensus with the Ministry of Finance yesterday, allowing local insurers to inject up to 35 percent of their assets into outbound investments, including those bound for China.
The finance ministry will now submit the proposed revisions of article 146 of the Insurance Law (
In his proposal, DPP Legislator Yu Jane-daw (余政道) yesterday urged the ministry to raise the outbound investment ceiling to 40 percent of insurers' assets -- up from the current 20 percent -- a proposal local insurers have long hoped for. The move will make it easier for them to expand overseas, especially in China.
"Facing a saturated market and low investment returns in Taiwan, insurers can expand their economy of scale by making greater overseas investments," Yu told the committee meeting.
The finance ministry, however, disagreed with Yu. Vice Finance Minister Susan Chang (
She said that a drastic relaxation of restrictions on outbound investments by insurers is likely to generate rapid capital outflow, hurting the economy.
If the overseas-capital-investment ceiling is raised to 40 percent of assets, it is estimated that insurers will quickly move as much as NT$1.35 trillion out of Taiwan.
The finance ministry wants to raise the ceiling to only 30 percent, Chang said.
Chang's proposal was endorsed by several lawmakers, including the DPP's Alice Wang (
Stepping in to mediate, DPP Legislator Chu Hsing-yu (朱星羽), who also chaired yesterday's finance-committee meeting, suggested compromising at 35 percent.
The nation's insurance companies have total assets of NT$3.88 trillion, 15.2 percent of which, or NT$510 billion, is placed in overseas investments, the ministry said. If the investment ceiling is raised to 35 percent, an estimated NT$500 billion would then be allowed to move out of Taiwan.
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