The Financial Supervisory Commission (FSC) is still reviewing China Development Financial Holding Corp’s (中華開發金控) application to acquire China Life Insurance Co (中國人壽) due to concerns over the company’s capital adequacy, it said on Thursday.
China Development Financial, which holds a 34.82 percent stake in China Life, announced on Nov. 27 that it would acquire another 21.13 percent of the life insurer through a public tender, which would boost its stake in China Life to 55.95 percent, company data showed.
The Insurance Bureau said that it is still reviewing the case, even though the Banking Bureau has approved China Development Financial’s plan for the acquisition.
Photo: Wang Meng-lun, Taipei Times
The company plans to use NT$10 billion (US$350.37 million) raised through bond sales, NT$3 billion of capital from its two units, CDIB Capital Group (中華開發資本) and KGI Securities Ltd (凱基證券), and other funds for the acquisition, company data showed.
“We are still evaluating if China Development Financial is capable of handling China Life’s demand to raise capital over the next decade,” Insurance Bureau Director-General Shih Chiung-hwa (施瓊華) told the Taipei Times by telephone on Thursday.
As the FSC would in 2026 impose on life insurers the stricter requirements for the calculation of liabilities stipulated in the International Financial Reporting Standards 17, China Life would likely need to raise fresh capital to maintain solid capital adequacy, Shin said.
It is important that China Development Financial can support the life insurance business, she said.
Given that the company would take control of China Life, the Insurance Bureau is also reviewing China Development Financial’s qualifications, Insurance Bureau Chief Secretary Lin Yao-tung (林耀東) told a news conference in New Taipei City.
The bureau is assessing if China Development Financial is knowledgeable and competent in the insurance business, and if it would be able protect the rights of policyholders, honor existing policies and commit to operating the business, Lin said.
Meanwhile, the Insurance Bureau earlier this month received Taishin Financial Holding Co’s (台新金控) application to purchase Prudential Life Insurance Co of Taiwan (保德信人壽), Lin said.
Taishin Financial on Aug. 11 announced that it wants to purchase Prudential Life for between NT$5.5 billion and NT$8.5 billion, company data showed.
The Insurance Bureau is reviewing Taishin Financial’s qualifications, with the assessment expected to be completed within two months, Lin said.
The Insurance Bureau has asked Taishin Financial to elaborate on its outlook for Prudential’s business over the next decade, including how much capital Prudential would need and when the acquisition would pay off, he said.
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