News Life and Health26 Apr 2018

Taiwan:Regulator to impose more controls on insurers with large FX losses

| 26 Apr 2018

Taiwan's financial watchdog has said that it will impose tighter controls over insurers with large foreign exchange losses, reports Reuters.

Financial Supervisory Commission (FSC) Chairman Wellington Koo told a parliamentary meeting last week that overseas investments of Taiwan’s insurance companies account for 65% of total investment.

In addition, Mr Koo said that stress tests have been conducted on insurance companies which have a relatively high proportion of overseas investments.

As for whether the FSC would raise the limit on investments by insurance companies in Taipei Exchange-listed bonds that are denominated in foreign currencies and issued by foreign entities, he said, “Currently, there is no discussion on this."

At present, the FSC intends to use stress tests to supervise insurers' investments in such bonds. The tests were conducted by a selected number of insurers at the beginning of this year and the outcomes were favourable.

According to official data, at the end of January 2018, the amount of investments by life insurers in foreign-currency denominated bonds listed in Taiwan stood at NT$3.42 trillion (US$115 billion). The five life insurers with the largest investments in these bonds were Nanshan, Fubon, Shin Kong, China Life and Taiwan Life.



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