The Financial Supervisory Commission (FSC) has voiced concern over the health of three domestic life insurers after they released their financial statements for the first six months.
The commission on Thursday said it would send warning letters to Shin Kong Life Insurance Co (新光人壽), Mercuries Life Insurance Co (三商美邦人壽) and Hontai Life Insurance Co (宏泰人壽) for failing to keep their risk-based capital above the required 200 percent.
Insurance rules also require all life insurers to maintain a net worth of more than 3 percent in at least one of the latest two inspection periods, the commission said.
Life insurers unable to meet the requirements must come up with enhancement measures such as increasing their capital, real-estate disposals or other solutions, the commission said.
Shin Kong Life failed the first test, while Mercuries Life and Hontai Life failed both requirements, Insurance Bureau Deputy Director Lin Chih-hsien (林志憲) said.
Shin Kong Life’s capital adequacy ratio slipped to 184.38 percent based on its financial statement at the end of June.
Lin said the commission first noticed the company’s capital adequacy ratio falling last year and suggested improvements to prevent further deterioration. The situation failed to improve and the commission is to request concrete measures to remedy the situation, Lin said.
However, Shin Kong Life kept its net worth ratio at 4.34 percent, higher the required minimum, the commission said.
Mercuries Life had a capital adequacy ratio of 140.23 percent and last month introduced a plan to shore up its capital by issuing 500 million new shares, it said.
The life insurer’s risk-based capital declined from 155.83 percent in the second half of last year to 140.23 percent in the first half of this year, much weaker than the 200 percent benchmark, the commission said.
At the same time, the company’s net worth ratio improved from 2.19 percent to 2.84 percent, but still lagged behind the statutory 3 percent, it said.
That explained why Mercuries Life in March increased its capital by NT$2.53 billion (US$79.41 million) and put forth plans for additional capital augmentation plans and property disposals, Lin said.
Hontai Life had a risk-based capital of 145.82 percent and a net worth ratio of 2.42 percent, and has proposed enhancing its capital by selling real estate, but it has so far failed to find buyers, Lin said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS