The nation’s life insurance market might continue its downturn due to new regulations that took effect yesterday, but the market is expected to stabilize by the end of this year, Cathay Financial Holding Co (國泰金控) president Lee Chang-ken (李長庚) said yesterday in Taipei.
“It is foreseeable that sales of life insurance products would continue to fall in the short term as consumers are likely to purchase fewer policies after premiums went up,” Lee said at the Cathay Service Ecosystem Partnership Day.
“However, it seems to me that consumer demand for insurance products tends to be rigid and they might reconsider if they really need insurance products,” he said. “Nonetheless, insurance sales are expected to recover gradually.”
Photo: CNA
The new regulations would help the life insurance industry develop in a healthier way in the long term, he said.
Four new regulations took effect yesterday as the Financial Supervisory Commission (FSC) aims to boost life insurers’ financial solvency and prepare them for the implementation of new insurance contracts standard IFRS 17 in 2025.
The commission lowered life insurance companies’ liability reserve interest rates on all policies denominated in New Taiwan dollars and US dollars by 25 basis points and 50 basis points respectively to keep them in line with declining market rates.
The commission also set a new lower limit on the death benefit-to-policy value ratio, which would incentivize insurers to sell fewer savings plans or policies linked with wealth management, as they provide fewer death benefits.
Insurance companies must calculate the contractual service margins of their products and make sure the margins are positive when applying to the FSC.
Companies are also requested to adopt a mechanism to stabilize their products’ declared interest rates, which determine the bonuses that policyholders receive.
When Lika Megreladze was a child, life in her native western Georgian region of Guria revolved around tea. Her mother worked for decades as a scientist at the Soviet Union’s Institute of Tea and Subtropical Crops in the village of Anaseuli, Georgia, perfecting cultivation methods for a Georgian tea industry that supplied the bulk of the vast communist state’s brews. “When I was a child, this was only my mum’s workplace. Only later I realized that it was something big,” she said. Now, the institute lies abandoned. Yellowed papers are strewn around its decaying corridors, and a statue of Soviet founder Vladimir Lenin
UNCERTAINTIES: Exports surged 34.1% and private investment grew 7.03% to outpace expectations in the first half, although US tariffs could stall momentum The Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) yesterday raised its GDP growth forecast to 3.05 percent this year on a robust first-half performance, but warned that US tariff threats and external uncertainty could stall momentum in the second half of the year. “The first half proved exceptionally strong, allowing room for optimism,” CIER president Lien Hsien-ming (連賢明) said. “But the growth momentum may slow moving forward due to US tariffs.” The tariff threat poses definite downside risks, although the scale of the impact remains unclear given the unpredictability of US President Donald Trump’s policies, Lien said. Despite the headwinds, Taiwan is likely
UNIFYING OPPOSITION: Numerous companies have registered complaints over the potential levies, bringing together rival automakers in voicing their reservations US President Donald Trump is readying plans for industry-specific tariffs to kick in alongside his country-by-country duties in two weeks, ramping up his push to reshape the US’ standing in the global trading system by penalizing purchases from abroad. Administration officials could release details of Trump’s planned 50 percent duty on copper in the days before they are set to take effect on Friday next week, a person familiar with the matter said. That is the same date Trump’s “reciprocal” levies on products from more than 100 nations are slated to begin. Trump on Tuesday said that he is likely to impose tariffs
HELPING HAND: Approving the sale of H20s could give China the edge it needs to capture market share and become the global standard, a US representative said The US President Donald Trump administration’s decision allowing Nvidia Corp to resume shipments of its H20 artificial intelligence (AI) chips to China risks bolstering Beijing’s military capabilities and expanding its capacity to compete with the US, the head of the US House Select Committee on Strategic Competition Between the United States and the Chinese Communist Party said. “The H20, which is a cost-effective and powerful AI inference chip, far surpasses China’s indigenous capability and would therefore provide a substantial increase to China’s AI development,” committee chairman John Moolenaar, a Michigan Republican, said on Friday in a letter to US Secretary of