The legislature’s Finance Committee yesterday completed a preliminary review of amendments to the Insurance Act (保險法) that would require an insurance company’s major shareholders to submit to a qualification review if they have a more than 10 percent stake.
The proposed amendments also stipulate that regulators should be notified of any shareholders who have a stake of more than 5 percent, something already required in the Financial Holding Company Act (金控法).
This move came after thousands of Nan Shan Life Insurance Co (南山人壽) sales agents staged a protest on Tuesday against their US parent company’s sale of Nan Shan to a Hong Kong-based consortium.
The protestors called on the government to strictly review qualifications of major shareholders in insurance firms. They called Nan Shan’s buyer a “vulture” group more interested in quick gains than the local firm’s long-term operations.
The Financial Supervisory Commission (FSC), however, dismissed speculation in the legislature that the proposed bill was tailor-made to prevent the China-backed consortium from acquiring Nan Shan, although the Nan Shan deal would be the first to be affected if the amendments pass.
“Whether there is a Nan Shan deal or not, we will push the bill,” commission Chairman Sean Chen (陳冲) said, adding that “any change of control” in a company is subject to regulatory approval, according to the International Association of Insurance Supervisors’ regulations.
“This is in line with global practices and establishes a legal basis,” Chen said.
He said the commission has always undertaken qualification reviews of major shareholders in a company, whether required to by law or not.
“Amending the law is neutral and does not curry favor with any party,” Chen said.
Legislators across party lines threw their support behind the proposed amendments, saying tightening the qualifications for an insurer’s major shareholders would help the development of the sector in the long run.
The Ministry of Economic Affairs’ Investment Commission is still reviewing the Nan Shan deal and yesterday it received the additional paperwork the FSC asked Nan Shan to submit.
In other developments, Chen confirmed that he had been invited to replace Vice Premier Eric Chu (朱立倫), who will resign to run as the Chinese Nationalist Party (KMT) candidate for Sinbei City in the November special municipality elections.
However, Chen said he felt more suited to his current position, given his financial expertise, and that he had had no personal career plans since he entered public service by joining the Ministry of Finance 21 years ago.
“As a civil servant, I cannot decide on my own career … whether or not I’ll assume a post depends on national and social needs,” Chen said, adding that he would let the Cabinet make the final decision.
An official announcement on the reshuffle is expected today.
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