Taiwan: Global custody services launched onshore for insurers
Source: Asia Insurance Review | Feb 2016
Citibank Taiwan has launched localised onshore global custody services for domestic insurance companies, setting a precedent for retaining insurers’ investment funds at home.
“Investments by Taiwan’s insurance sector are estimated at about US$560 billion... of which 40% to 50% is abroad,” Citibank Taiwan chairman Victor Kuan said. “About NT$7.5 trillion [US$226.8 billion] in insurance investments are expected to return to the Taiwanese market,” he said.
“With the new service, domestic insurers would no longer have to navigate through the complexities of different time zones, markets, currencies, taxes and settlement processes,” Mr Kuan said.
Taiwanese insurers have been turning to overseas markets for higher returns due to limited product choices in the domestic market. They use custody and settlement services for foreign securities through offshore custodian banks, a practice that has complicated regulatory efforts.
With the new service, Citibank Taiwan serves as the signing party and open custodial accounts for its corporate clients, a move which is expected to strengthen regulatory oversight. Nan Shan Life Insurance is the first company to sign up for it.