The Financial Supervisory Commission (FSC) yesterday said that it would review US-based health service provider Cigna Corp’s sale of its life insurance business to US insurer Chubb Ltd to safeguard Cigna’s local employees and clients.
Cigna Corp’s local unit, Cigna Taiwan Life Assurance Co Ltd (國際康健人壽), had 340,000 policyholders and 902 employees as of the end of June, and its total assets were NT$40.7 billion (US$1.45 billion) as of the end of August, the commission said yesterday.
Cigna Taiwan had operated a stable business since it was launched in 1989 and it distributed cash dividends regularly, it said.
Chubb on Thursday announced that it had signed an agreement with Cigna to acquire the company’s life and non-life insurance businesses that provide personal accident, supplemental health and life insurance in seven Asia-Pacific markets for US$5.75 billion in cash.
The seven markets are Taiwan, South Korea, New Zealand, Thailand, Hong Kong, Indonesia and Turkey, Chubb said in a statement, adding that the transaction is expected to be completed next year and is subject to regulatory approvals and customary closing conditions.
The FSC said that it would review the deal to determine whether the buyer is capable of running the insurance business.
The commission is to assess whether Chubb would protect the rights of policyholders, honor existing policies and commit to operating the business in the long term, the commission told reporters.
The FSC would also evaluate whether Chubb has enough capital to support the insurer, as with stricter solvency rules, the International Financial Reporting Standards 17, to take effect in 2026, it is likely that life insurers would need to raise fresh capital, it said.
While Chubb already owns two local units, Chubb Life Insurance Co (安達人壽) and Chubb Corp Taiwan (安達產險台灣), the FSC would still examine whether the company is knowledgeable and competent in the insurance business, it said.
Chubb Life Insurance had NT$140 billion in assets as of the end of August and a market share of 1.06 percent last year, while Cigna Taiwan’s market share was 0.38 percent last year, FSC data showed.
The transaction, if approved by the FSC, would mark the second sale of a foreign life insurer after Prudential Life Insurance Co of Taiwan (保德信人壽) was sold to Taishin Financial Holding Co (台新金控), while it would be the first consolidation of two insurers in Taiwan in the past few years.
Cigna Taiwan chief executive officer Tim Shields yesterday said in a statement that the company was proud that it had built a top life insurance business in Taiwan and being acquired by Chubb showed that Cigna Taiwan’s achievement had been recognized.
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