Cathay Life Insurance Co (國泰人壽), the nation’s largest life insurer, has obtained permission from the Financial Supervisory Commission (FSC) to increase its overseas investment ceiling to 45 percent of working capital from the current 40 percent.
Cathay Life was the nation’s first financial firm to adopt a higher overseas investment ceiling against an unfavorable domestic investment environment where interest rates remain low and competition is intensifying.
“The commission has given the go-ahead to the company’s application to raise the investment cap” to gain better investment returns, Financial Supervisory Commission Secretary-General Lin Tung-liang (林棟樑) said by telephone yesterday.
Lin did not elaborate on Cathay Life’s case, but it is -expected that other local life insurers and financial firms will view Cathay’s progress as a good omen to help them enhance the efficiency of their fund utilization.
Yesterday’s approval came after the commission in August amended its regulations governing domestic insurance companies’ investments in Chinese securities as a way to help boost investment gains.
Cathay Life is an insurance unit of Cathay Financial Holding Co (國泰金控), the nation’s largest financial services provider by revenue. At its quarterly investors conference earlier this month, Cathay Financial said it would increase investment in China’s real estate and equities sector.
Separately, Cathay Financial said yesterday it had acquired all of the 43.14 million outstanding shares of Cathay Securities Investment Trust Co (國泰投信) from its life insurance arm and other investors, making the fund management unit its wholly owned subsidiary.
In a filing to the Taiwan Stock Exchange, Cathay Financial said it had purchased the Cathay Securities Investment Trust shares at NT$64.3 per share, or NT$2.77 billion in total.
Prior to the share transaction, Cathay Securities Investment Trust was 40 percent owned by Cathay Life, 3.75 percent owned by Cathay Venture Capital Corp (國泰創業投資) and the remaining shares were owned by seven other parties.
“The deal is expected to make Cathay Securities Investment Trust an asset management platform within the [Cathay] group, It will also offer the company a better position to tap into the asset management business in the Greater Chinese market,” Cathay Financial said in the filing.
The deal still needs to receive the FSC’s approval, the company said.
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