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.
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices
DOLLAR SIGNS: The central bank rejected claims that the NT dollar had appreciated 10 percentage points more than the yen or the won against the greenback The New Taiwan dollar yesterday fell for a sixth day to its weakest level in three months, driven by equity-related outflows and reactions to an economics official’s exchange rate remarks. The NT dollar slid NT$0.197, or 0.65 percent, to close at NT$30.505 per US dollar, central bank data showed. The local currency has depreciated 1.97 percent so far this month, ranking as the weakest performer among Asian currencies. Dealers attributed the retreat to foreign investors wiring capital gains and dividends abroad after taking profit in local shares. They also pointed to reports that Washington might consider taking equity stakes in chipmakers, including Taiwan Semiconductor
A German company is putting used electric vehicle batteries to new use by stacking them into fridge-size units that homes and businesses can use to store their excess solar and wind energy. This week, the company Voltfang — which means “catching volts” — opened its first industrial site in Aachen, Germany, near the Belgian and Dutch borders. With about 100 staff, Voltfang says it is the biggest facility of its kind in Europe in the budding sector of refurbishing lithium-ion batteries. Its CEO David Oudsandji hopes it would help Europe’s biggest economy ween itself off fossil fuels and increasingly rely on climate-friendly renewables. While
RSS