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
With an approval rating of just two percent, Peruvian President Dina Boluarte might be the world’s most unpopular leader, according to pollsters. Protests greeted her rise to power 29 months ago, and have marked her entire term — joined by assorted scandals, investigations, controversies and a surge in gang violence. The 63-year-old is the target of a dozen probes, including for her alleged failure to declare gifts of luxury jewels and watches, a scandal inevitably dubbed “Rolexgate.” She is also under the microscope for a two-week undeclared absence for nose surgery — which she insists was medical, not cosmetic — and is
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
RSS