The Financial Supervisory Commission (FSC) yesterday fined Chaoyang Life Insurance Co (朝陽人壽) NT$6 million (US$181,615) and issued three citations for a number of irregularities.
The troubled insurer faces being placed under government receivership as soon as the first quarter of next year, the commission said.
The insurer would be placed under government receivership if it fails to raise its risk-based capital (RBC) ratio to more than 50 percent within 90 days of Dec. 31, the commission said.
The RBC ratio is a measure of a company’s financial strength. At the end of the third quarter, Chaoyang Life, which currently has about 100,000 policy holders, said its negative net worth had expanded to NT$2.2 billion.
Although the insurer’s board of directors in September approved a NT$1.55 billion capital increase plan, the commission said that the amount is not sufficient to cover the company’s negative net worth.
Chaoyang Life’s capital increase plan is backed by a plot of land adjacent to Taichung’s Chaoyang University of Technology (朝陽科技大學), where the insurer plans to build a student dormitory and commercial complex and raise funds through rental fees, the company said last month.
The company has also readied a NT$500 million cash injection, it said.
Among the infractions that led to the commission’s imposition of fines on the company were irregularities relating to its purchase of a plot of undeveloped land, as Chaoyang Life had failed to generate the required investment returns from the parcel.
In related news, despite appeals by the Life Insurance Association of the Republic of China (壽險公會) for RBC requirements to be eased to help companies weather heightened volatility in global markets, the commission’s Insurance Bureau seems to be gearing up to impose more stringent guidelines on the sector.
Insurers said that their efforts this year to increase capital would be nullified by the bureau’s intent to raise the interest rate and C3 market risk components of the RBC metric for annuities from 0.1 times to 0.3 times.
Mercuries Life Insurance Co (三商美邦人壽) said that its NT$1.7 billion capital increase plan was expected to elevate its RBC ratio by at least 10 percent, but following the change, newly raised funds through its issuance of 100 million new shares at NT$17 each would barely make a difference to its RBC ratio.
Other insurers said that they would have no option but to reduce their holdings of more risky assets in order to meet the new RBC requirements set to take effect next year.
“We found no compelling reasons to grant insurers eased RBC requirements,” Insurance Bureau Director-General Jenny Lee (李滿治) said, adding that the bureau intends to continue raising the C3 rate on an annual or biannual basis.
This time was supposed to be different. The memorychip sector, famous for its boom-and-bust cycles, had changed its ways. A combination of more disciplined management and new markets for its products — including 5G technology and cloud services — would ensure that companies delivered more predictable earnings. Yet, less than a year after memory companies made such pronouncements, the US$160 billion industry is suffering one of its worst routs ever. There is a glut of the chips sitting in warehouses, customers are cutting orders and product prices have plunged. “The chip industry thought that suppliers were going to have better control,” said
Enimmune Corp (安特羅生技) has obtained marketing approval from the Food and Drug Administration (FDA) for its EnVAX-A71 vaccine for enterovirus 71 (EV-71), becoming the nation’s first enterovirus vaccine completely made in Taiwan, it said yesterday. After spending 13 years and NT$1.5 billion (US$49.77 million) on the research and development of the vaccine, Enimmune plans to start manufacturing and marketing it by the end of March, the company said in a statement, without disclosing customer order figures. “It is possible that the vaccine would not be included in a national vaccination program initially, and consumers would need to pay for it themselves,” parent
Hon Hai Technology Group (鴻海科技集團), also known as Foxconn Technology Group (富士康科技集團) internationally, yesterday said it was confident that its performance would improve in the second half of this year. Investment plans related to electric vehicles (EVs) in different parts of the world are expected to gradually start coming to fruition, Hon Hai chairman Young Liu (劉揚偉) told reporters after leading a new year’s prayer at the company’s headquarters in New Taipei City’s Tucheng District (土城). Major challenges stemming from the COVID-19 pandemic and the Russia-Ukraine war continue to affect the global economy. However, Liu said that he expects a turnaround in
‘BLUE OCEAN HIGHWAY’: The private cost of dredging is the main obstacle to having potentially thousands of new marine tourists make port calls, a marina operator said A company executive is betting big on marina development in Taiwan, as the government aims to boost the number of dedicated recreational yacht berths to 1,600 from 1,138 by 2025. Taiwan could make its dream of having thousands of sailboats and yachts make port calls in the country a reality by speeding up the construction of new marina berths, ARGO Yacht Club (亞果遊艇會) president Ho Yu-lin (侯佑霖) said. ARGO operates three marinas, in Kaohsiung, Penghu County and Tainan’s Anping District (安平). The 12-hectare Tainan Anping Yacht City is a members-only yacht club providing an array of amenities including restaurants and a hotel resort