The Financial Supervisory Commission (FSC) yesterday fined Farglory Life Insurance Co (遠雄人壽) NT$8.5 million (US$277,905) over breaches of corporate governance regulations in real-estate development projects.
That followed a NT$14.4 million fine it issued Farglory in April last year over the same corporate governance issues, Insurance Bureau Chief Secretary Lin Yao-tung (林耀東) told a news conference in New Taipei City.
“A special financial examination at the end of last year showed that the company still has a lot of problems... We have to continue fining it, as it failed to improve its business and correct the problems,” Lin said.
Farglory Life Insurance is a unit of Farglory Group (遠雄集團), whose core business is land development, construction and real estate.
The insurance company did not set an internal control system for supplier evaluation and price comparison when choosing contractors for its real-estate development projects, Lin said.
The staff responsible for choosing the suppliers only reported their decisions to management, but they were supposed to report to the board, he said.
Farglory Life offered loans to clients who had not secured enough money from banks, but they set the lending rates without taking credit risks into account, Lin said.
The firm was fined NT$3.6 million over these issues, he said.
The investigation revealed that Farglory Life did not follow the rules for transactions and lending between insurance enterprises and interested parties, disregarding its internal controls, he said.
The commission found that the life insurer had favored one firm and awarded it two contracts to advertise its real-estate projects worth more than NT$5 million each, without reporting to the board of directors.
The company did not have its compliance sector review the compliance of its affiliates, he said, adding that it was fined NT$3.3 million over such transactions.
“These problems were systematic, as they existed in all development projects,” Lin said, adding that the commission urged the firm to improve quickly.
Over the past three years, Farglory Life has been fined more than NT$31.7 million by the commission.
In a separate case, it fined Transglobe Life Insurance Co (全球人壽) NT$1 million for not reporting real-estate investments and returns within the regulatory period, it said.
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