Taiwan: Regulator urges insurers to hedge against global volatility
Source: Asia Insurance Review | Oct 2015
The head of the Financial Supervisory Commission (FSC) has urged the island’s insurers and other financial institutions to step up risk hedging and other measures to weather global market volatility.
FSC Chairman William Tseng said: “Factors such as a potential interest rate hike in the US and a weakening yuan are likely to spur volatility in global markets, affecting all aspects of domestic financial institutions’ operations, including individual finances, investments and lending.”
He noted that many insurance companies have more than 50% of their total investments allocated overseas, and that they must be prepared to make appropriate adjustments according to their risk profiles.
He said that he is not issuing warnings to specific companies, but he stressed the playing field had changed dramatically. Companies must protect the interests of consumers, and avoid selling derivatives such as RMB-linked target redemption forwards, he said.