The Financial Supervisory Commission (FSC) has banned Mercuries Life Insurance Co (三商美邦人壽) from trading with or granting credit to interested parties, and demanded detailed capital enhancement measures within a month to meet regulatory requirements.
The punitive measures do not affect old deals and should not cause substantive damage, but they should help the Taipei-based insurer improve its capital strength in a timely fashion, Insurance Bureau Deputy Director-General Tsai Huo-yen (蔡火炎) told a media briefing on Thursday.
Mercuries Life at the end of last year had a risk-based capital ratio of 111.09 percent and a net worth ratio of 2.97 percent, lagging behind the required minimums of 200 percent and 3 percent respectively, Tsai said, adding that the inadequacy dates back to the second half of 2022.
Photo: Wu Hsin-tien, Taipei Times
The remedial measures the company filed in May would not correct the inadequacy this year and beyond, not to mention the grave uncertainty involved, he added.
Mercuries proposed enhancement measures including the transfer of real estate as investment, the issuance of 300 million new common shares, the issuance of special debts through private placement, and the issuance of NT$5 billion (US$153.56 million) in subordinated bonds, Tsai said.
The official further cited the insurer as saying that the company plans to complete the issuance of common or special shares and convertible bonds next year and then conduct a review if supplementary measures are needed.
However, Mercuries Life has not yet inked a deal with potential investors over the timetable for share issuances and other details, raising doubts it could obtain the needed funds by the end of this year, Tsai said.
Even if all things were to go smoothly, the cash injection would only lift the company’s capital by a maximum of 30.4 percentage points to 180.4 percent, still below the 200 percent benchmark, the official said.
The insurer must come up with more concrete remedies detailing how and when it would comply with the capital requirements, Tsai said, adding that the commission would otherwise deal out further punishments.
Mercuries Life said it is working hard and has gained headway in bolstering its capital and protecting the interests of shareholders and policyholders.
Net income in the first half totaled NT$6.32 billion, or earnings of NT$1.24 per share, raising its net worth ratio to 3.34 percent and its risk-based capital to 150 percent, meaning the remedial measures would work if carried out successfully.
The financial improvement came from stable increases in fixed income and capital gains, bolstered by stock market rallies at home and abroad, the insurer said.
Profit improvement should be sustainable in the second half, as the US Federal Reserve is widely expected to lower interest rates toward the end of the year, which would be favorable to its bondholdings, it said.
Currency hedging costs would remain high in the short term, and the company would maintain active and balanced wealth management practices by guiding more cash to blue-chip stocks and add foreign debt without straining its liquidity, it said.
RUN IT BACK: A succesful first project working with hyperscalers to design chips encouraged MediaTek to start a second project, aiming to hit stride in 2028 MediaTek Inc (聯發科), the world’s biggest smartphone chip supplier, yesterday said it is engaging a second hyperscaler to help design artificial intelligence (AI) accelerators used in data centers following a similar project expected to generate revenue streams soon. The first AI accelerator project is to bring in US$1 billion revenue next year and several billion US dollars more in 2027, MediaTek chief executive officer Rick Tsai (蔡力行) told a virtual investor conference yesterday. The second AI accelerator project is expected to contribute to revenue beginning in 2028, Tsai said. MediaTek yesterday raised its revenue forecast for the global AI accelerator used
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has secured three construction permits for its plan to build a state-of-the-art A14 wafer fab in Taichung, and is likely to start construction soon, the Central Taiwan Science Park Bureau said yesterday. Speaking with CNA, Wang Chun-chieh (王俊傑), deputy director general of the science park bureau, said the world’s largest contract chipmaker has received three construction permits — one to build a fab to roll out sophisticated chips, another to build a central utility plant to provide water and electricity for the facility and the other to build three office buildings. With the three permits, TSMC
TEMPORARY TRUCE: China has made concessions to ease rare earth trade controls, among others, while Washington holds fire on a 100% tariff on all Chinese goods China is effectively suspending implementation of additional export controls on rare earth metals and terminating investigations targeting US companies in the semiconductor supply chain, the White House announced. The White House on Saturday issued a fact sheet outlining some details of the trade pact agreed to earlier in the week by US President Donald Trump and Chinese President Xi Jinping (習近平) that aimed to ease tensions between the world’s two largest economies. Under the deal, China is to issue general licenses valid for exports of rare earths, gallium, germanium, antimony and graphite “for the benefit of US end users and their suppliers
Dutch chipmaker Nexperia BV’s China unit yesterday said that it had established sufficient inventories of finished goods and works-in-progress, and that its supply chain remained secure and stable after its parent halted wafer supplies. The Dutch company suspended supplies of wafers to its Chinese assembly plant a week ago, calling it “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms,” Reuters reported on Friday last week. Its China unit called Nexperia’s suspension “unilateral” and “extremely irresponsible,” adding that the Dutch parent’s claim about contractual payment was “misleading and highly deceptive,” according to a statement
RSS