High-ranking representatives from American International Group (AIG) are slated to pay the Financial Supervisory Commission (FSC) a visit today to better understand the regulator’s stance on its plan to divest Taiwan subsidiary Nan Shan Life Insurance Co (南山人壽).
FSC Chairman Chen Yuh-chang (陳裕璋), who has called on AIG to retain its 97.57 percent stake in Nan Shan and promised to provide help, is expected to meet AIG officials in person, according to the Chinese-language Economic Daily News.
“The commission will not tell the US firm which buyer to pick except to reiterate its five principles on the issue,” an insurance bureau official said yesterday by telephone on condition of anonymity.
The official confirmed a visit by AIG officials last week, but refused to comment on the rumored meeting today.
AIG reportedly asked the commission to help screen potential buyers to avoid a second failed sale attempt, after the commission blocked its first attempt on Aug. 31 on concerns over the Hong Kong buyer group’s capital increase capability and long-term commitment.
“The commission cannot remark on the potential buyers before AIG formally files share transfer applications and submit necessary documents,” the official said.
The official declined to comment on whether Cathay Financial Holding Co (國泰金控), one of the potential buyers, is qualified to bid for Nan Shan, as its life insurance arm, Cathay Life -Insurance Co (國泰人壽), already has 30 percent of market share by first-year premiums.
“Fair trade rules forbid a market share exceeding 50 percent and subject a 33 percent market share to review,” he said.
Fubon Financial Holding Co (富邦金控), the parent of Fubon Life Insurance Co (富邦人壽), also offered to acquire Nan Shan this time.
As to professional background, the official said prior experience in operating an insurance firm is not necessary. Three other potential buyers — Chinatrust Financial Holding Co (中信金控), Ruentex Group (潤泰集團) and Primus Financial Holdings Ltd (博智金融) — have not owned an insurer.
“If the buyer can put together a professional team to run Nan Shan, the professional requirement is met,” he said.
The commission also asks prospective buyers to guarantee the rights of Nan Shan employees and policyholders. Nan Shan employees demand at least two years of employment and retirement benefits.
In related news, Bank of Taiwan Life Insurance Co (台銀人壽) is studying the acquisition of Kuo Hua Life Insurance Co (國華人壽), with no further progress so far, Sherry Chen (陳素甜), spokeswoman for state-owned parent Taiwan Financial Holding Co (台灣金控) said yesterday.
Kuo Hua has been under government control since Aug. 4 last year as its capital adequacy failed to meet requirements.
Taiwan Financial is expected to perform due diligence on a possible purchase of Kuo Hua before the year ends, the Chinese-language Economic Daily News reported yesterday.
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