The Financial Supervisory Commission (FSC) on Thursday ordered four non-life insurance companies to raise new capital by the end of June after their capital solvency conditions worsened due to massive COVID-19 insurance policy payments.
At the end of last year, CTBC Insurance Co (中國信託產險), Fubon Insurance Co (富邦產險), Tokio Marine Newa Insurance Corp (新安東京海上產險) and Hotai Insurance Co (和泰產險) failed to meet risk-based capital (RBC) ratios, the commission said.
The FSC uses the ratio to gauge an insurer’s capital adequacy, setting 50 percent as the regulatory minimum and 200 percent as a healthy level.
Photo courtesy of Hotai Insurance Co
All four insurers’ RBC ratios fell into negative territory at the end of last year, as they suffered heavy losses due to massive compensation to COVID-19 policyholders, the commission said.
The four companies must restore their solvency levels by raising fresh capital by the end of June, or they would be taken over by the commission within 90 days, it said.
Fubon Insurance had an RBC ratio of minus-37.25 percent, while Hotai Insurance had an RBC ratio of minus-321 percent, Tokio Marine Newa Insurance minus-1,078 percent and CTBC Insurance minus-1,680 percent, FSC data showed.
Fubon Insurance’s board of directors yesterday approved a plan to issue 1 billion new common shares via a private placement, as the insurer’s accumulated losses have exceeded half of its share capital, its parent Fubon Financial Holding Co (富邦金控) said in a statement to the Taiwan Stock Exchange.
Fubon Insurance aims to raise NT$16 billion this time after a capital injection of NT$15 billion in August last year to address the problem.
Hotai Insurance plans to scrap NT$4.5 billion from its share capital to absorb losses and then raise NT$4.5 billion by issuing 450 million common shares via a private placement to improve its financial status, its parent Hotai Motor Co (和泰汽車) said in a filing to the Taiwan Stock Exchange yesterday.
Hotai Insurance last year raised NT$20 billion and NT$6 billion after two separate share issues.
Another insurer, Chung Kuo Insurance Co (兆豐產險), had an RBC ratio of minus-8.8 percent at the end of last year, but was able to restore it to 200 percent after a fresh capital injection of NT$6 billion, the commission said.
Overall, the nation’s six major non-life insurers that sold a majority of the COVID-19 insurance policies have raised fresh capital of NT$112.5 billion to increase their adequacy ratios, the commission’s data showed.
Meanwhile, Mercuries Life Insurance Co (三商美邦人壽保險) and Hontai Life Insurance Co (宏泰人壽) are required to submit plans to enhance their capital adequacy as their equity-to-assets ratio have slid below 3 percent, the commission added.
The capital inadequacy issues mark the latest challenge facing local insurers after rate hikes and tumbling stock markets.
Additional reporting by Lisa Wang
CHIP RACE: Three years of overbroad export controls drove foreign competitors to pursue their own AI chips, and ‘cost US taxpayers billions of dollars,’ Nvidia said China has figured out the US strategy for allowing it to buy Nvidia Corp’s H200s and is rejecting the artificial intelligence (AI) chip in favor of domestically developed semiconductors, White House AI adviser David Sacks said, citing news reports. US President Donald Trump on Monday said that he would allow shipments of Nvidia’s H200 chips to China, part of an administration effort backed by Sacks to challenge Chinese tech champions such as Huawei Technologies Co (華為) by bringing US competition to their home market. On Friday, Sacks signaled that he was uncertain about whether that approach would work. “They’re rejecting our chips,” Sacks
NATIONAL SECURITY: Intel’s testing of ACM tools despite US government control ‘highlights egregious gaps in US technology protection policies,’ a former official said Chipmaker Intel Corp has tested chipmaking tools this year from a toolmaker with deep roots in China and two overseas units that were targeted by US sanctions, according to two sources with direct knowledge of the matter. Intel, which fended off calls for its CEO’s resignation from US President Donald Trump in August over his alleged ties to China, got the tools from ACM Research Inc, a Fremont, California-based producer of chipmaking equipment. Two of ACM’s units, based in Shanghai and South Korea, were among a number of firms barred last year from receiving US technology over claims they have
It is challenging to build infrastructure in much of Europe. Constrained budgets and polarized politics tend to undermine long-term projects, forcing officials to react to emergencies rather than plan for the future. Not in Austria. Today, the country is to officially open its Koralmbahn tunnel, the 5.9 billion euro (US$6.9 billion) centerpiece of a groundbreaking new railway that will eventually run from Poland’s Baltic coast to the Adriatic Sea, transforming travel within Austria and positioning the Alpine nation at the forefront of logistics in Europe. “It is Austria’s biggest socio-economic experiment in over a century,” said Eric Kirschner, an economist at Graz-based Joanneum
OPTION: Uber said it could provide higher pay for batch trips, if incentives for batching is not removed entirely, as the latter would force it to pass on the costs to consumers Uber Technologies Inc yesterday warned that proposed restrictions on batching orders and minimum wages could prompt a NT$20 delivery fee increase in Taiwan, as lower efficiency would drive up costs. Uber CEO Dara Khosrowshahi made the remarks yesterday during his visit to Taiwan. He is on a multileg trip to the region, which includes stops in South Korea and Japan. His visit coincided the release last month of the Ministry of Labor’s draft bill on the delivery sector, which aims to safeguard delivery workers’ rights and improve their welfare. The ministry set the minimum pay for local food delivery drivers at
RSS