保險業資金辦理專案運用公共及社會福利事業投資管理辦法

10If an insurer engages in public investment in accordance with Subparagraphs 6 and 7 of Paragraph 1 hereof where the insurer participates through equity investment according to the regulations of the competent authority, and receives residential real estate reassigned by the investee company for insurer’s equity share in the project, the percentage of the insurer’s capital contribution multiplied by the percentage of residential real estate reassigned by the investee company to the total area of the real estate project may not exceed 10%. In addition, the insurer may not acquire ownership of the residential property. This restriction does not apply if the residences are provided for lease only.

81. The insurer has established internal operating rules in accordance with relevant self-regulatory rules set out by the insurance association and filed with the competent authority for reference; and

92. The insurer’s ratio of total adjusted net capital to risk-based capital in the most recent period complies with the regulatory standard for capital adequacy set out in Subparagraph 1, Paragraph 2, Article 143-4 of the Act (hereinafter referred to as "the regulatory standard ").

98. Other information specified by the competent authority.

10The post-investment management method in Subparagraph 4 of the preceding paragraph shall at least include the following:

111. Post-investment management mechanisms.

122. Regular review of whether the actual investment conditions meet the original investment plan and scope, regulations of the competent authority or the competent authorities of other industries, and evaluation and plans for the required response measures.

13For the invested entities listed in Subparagraph 2, Article 2 of the Act, the post-investment management methods in the preceding paragraph must include a review to ensure that the invested entity does not involve itself in management right disputes of enterprises in which it has direct or indirect investment, and such requirements must be included in the contracts or other agreement documents it has signed.

14If the insurer invests in an enterprise listed in Article 3 or Article 4, and appoints more than half of the directors of the investee, the investee must have at least one independent director who may not be a government agency, a juristic person shareholder or its authorized representative according to Article 27 of the Company Act, and must have the professional knowledge necessary for the business operations of the investee company. The independent director must also maintain independence within the scope of its business operations and may not have direct or indirect interests with the insurer or its affiliate companies.

8(I) The insurer’s ratio of total adjusted net capital to risk-based capital as of the end of most recent period shall comply with the regulatory standard.

9(II) The investment shall be approved by the board of directors, and an independent director shall be appointed. In addition, except for the insurer entirely held by a financial holding company, an audit committee shall be established.

10(III) There have been no major violations of the internal control procedure governing various applications of funds in the immediately preceding year, or the violations have been rectified and the rectification has been affirmed by the competent authorities with relevant supporting document.

11(IV) There have been no major sanctions and disciplinary actions related to the usage of insurer’s funds imposed by the competent authority in the most recent year, however, this does not include violations that have been rectified and affirmed by the competent authority.

12(V) Where this is not the first-time investment in an entity and the total investment amount has reached above 45% of the outstanding shares or paid-in capital of the invested entity, the invested entity shall not show accumulated losses in its most recent financial statements, unless the invested entity is a private institution set out in the PPP Act.

13(4) Except for invested entities prescribed in the preceding three Items, total investment in any entity shall not exceed 10% of the outstanding shares or paid-in capital of the invested entity.

144. In case of securitization products issued by an insurer aiming at the contents set forth in Article 3 and 4 as the target, such insurer may invest within the limit of 10% of the total amount of the securitization products, free of the restriction of the investment ratio set forth in the preceding Subparagraph.

155. The total amount of an insurer invested in the entity listed in Paragraph 2 of Article 5 shall not exceed 2% of its total funds.

16The major sanctions and disciplinary actions as prescribed in Item 3-4, Subparagraph 3 of the preceding Paragraph and Item 1-5, Subparagraph 2, Paragraph 3 of Article 10 refer to Article 2 of the Regulations Governing Public Disclosure by the Financial Supervisory Commission of Material Enforcement Actions for Violations of Financial Legislation.

17Where, after an insurer invests in a special project, or a public investment or social welfare enterprise, and the invested entity is qualified to accept investments under Subparagraph 3 or 4, Paragraph 1 of Article 146-1 of the Act, the investments in such entity shall be governed by the provisions of the aforementioned Subparagraph clauses and the following rules instead:

181. Where the funds of the invested entity are used in any project under Article 3 or Article 4 herein, and the insurer’s investment ratio exceeds the limits set forth in Subparagraph 3 or 4 of Paragraph 1 or Paragraph 2 of Article 146-1 of the Act, no additional funds shall be invested in the entity unless the additional investment is made to maintain the original equity share in the entity.

192. Where the funds of the invested entity are used originally in a project under Article 3 or Article 4 herein which subsequently exceeds the scope of projects under Article 3 or Article 4 herein, and the invested entity undergoes significant changes in its major business items or operational policies, the insurer shall, within 7 working days after the occurrence of event, report the reasons and relevant information to the competent authority. If it is deemed by the competent authority that investment in the invested entity clearly does not align with the original investment purpose, the insurer shall, within three years from the next day following the receipt of competent authority’s letter, reduce its investment ratio to the level that complies with Subparagraph 3 or 4, Paragraph 1, Article 146-1 of the Act. However the preceding provision does not apply, provided the insurer applies, within two months before the aforementioned adjustment period expires, to the competent authority for an extension of the adjustment period by submitting the reasons why it is unable to dispose its shares in the invested entity within the specified time limit.

20For insurers that apply for an extension of the adjustment period according to the provision of Subparagraph 2 of the preceding paragraph, each extension shall not exceed one year and extension will be allowed for a maximum of two times.

21Where an insurer and its interested parties jointly invest in an investee listed in Subparagraph 2 of Article 2 or Subparagraph 1, Subparagraph 2, and Subparagraph 4, Paragraph 2 of Article 5 of the Regulations or take any methods to achieve controlling and subordinate relations with the same investee, the following regulations must be met:

221. The insurer may not take any direct or indirect methods via the investee to intervene in the business management and investment decisions of the same investee and its investees;

232. The combined investments of the insurer and the invested entity in a company stock whose public issuance is approved by law as prescribed in Subparagraph 3, Paragraph 1 of Article 146-1 of the Act may not exceed the limit as prescribed in Subparagraph 3, Paragraph 1 of Article 146-1 of the Act.

24The Subparagraph 2 of the preceding Paragraph regarding the invested entity’s investment in a company stock whose public issuance is approved by law as prescribed in Subparagraph 3, Paragraph 1 of Article 146-1 of the Act, which shall be combined calculation with the insurer’s investment in the same company stock, is based on the insurer’s investment or contribution ratio in the invested venture investment enterprise. Where the limit is exceeded, the insurer shall comply with the following regulations before the condition is improved:

251. The insurer’s shareholding in the aforementioned company stock may not be increased;

262. The combined calculation of the insurer and the invested entity’s shareholding in the aforementioned company stock may not be increased.

76. The subsidiaries shall comply with the required control procedure according to the “Regulations Governing Implementation of Internal Control and Auditing System of Insurers” and “Regulations Governing Establishment of Internal Control Systems by Public Companies”.

87. The insurer shall establish a monitoring and audit management system. Such monitoring and audit system shall at least include the regulations prescribes in the preceding six subparagraphs and be submitted to and passed by the board of directors. If the independent directors have objections or reserve their opinions, the meeting minutes shall record the details.

9The audit and tracking report prescribed in Subparagraph 5 of previous Paragraph shall be signed by the general manager, the general auditor, and the compliance officer of the headquarter of the insurer. The content of the audit report shall at least include the followings:

101. Operating status of the invested entity;

112. Quarterly financial statement of the invested entity;

123. The meeting minutes and the implementation status of the resolutions passed by the board of directors of the invested entity;

134. The implementation status of the resolutions passed by the shareholders meeting of the invested entity;

145. The existence of violation or abnormalities in the internal control system of the invested entity; and

156. Whether the invested entity has a major violation or has been involved in any illegal activity.

16Non-life and life insurers shall comply with Article 11 of the “Regulations Governing Public Disclosure of Information by Non-life Insurers” and “Regulations Governing Public Disclosure of Information by Life Insurers” to disclose the audit report for the implementation of investment improvement plans listed in Subparagraph 4 of Paragraph 1 as well as the complete audit report of the invested entity listed in Subparagraph 5 in the same Paragraph to the public under the notes which shall be made under the information disclosure website. The aforesaid disclosure information shall be updated within ten days after submission to the board of directors.

17Where an invested entity specified in paragraph 1 and its subordinate companies having a controlling-subordinate relationship with the entity based on the entity’s shareholding in the company do not have substantial operating activities, the provisions of Subparagraphs 1 ~ 5 and Subparagraph 7 of Paragraph 1 hereof and the provisions of Paragraphs 2 and 3 hereof do not apply.

65. Documents regarding decisions resolved or powers authorized by the board of directors.

76. Post-investment management methods and evaluation and plans for the response measures. If the invested entity is an enterprise listed in Article 3 or Article 4 and requires environmental impact assessment report in accordance with the Environmental Impact Assessment Act, insurer shall explain Post-investment management methods of environmental impact assessment items.

87. If the invested entity is listed in Subparagraph 2, Article 2, provide the fundraising plans and investment decision-making mechanisms, post-loan management, information disclosure, and mechanisms for preventing conflicts of interest.

98. If the invested entity is an enterprise listed in Article 3 or Article 4, provide an explanation of the list of directors and supervisors it has appointed, management mechanisms for ensuring proper exercise of rights, material decisions, and post-investment management mechanisms. If the total number of directors appointed by the insurer exceeds half of all directors, it must provide explanation documents for the criteria for the independence of directors specified in Paragraph 4, Article 6.

109. An opinion statement issued and signed by the head office chief compliance officer undertaking that the use of funds and/or investment complies with applicable regulations and internal rules.

1110. Documents evidencing insurer’s use of funds complies with applicable regulations and supervision / management methods, provided the invested entity invests in a project under Articles 2 ~ Article 4 herein through a subordinate company having a controlling-subordinate relationship with the entity based on the entity’s shareholding in it.

1211. Letters of approval issued by the relevant authorities.

1312. Other information specified by the competent authority.

14Where, after the date of receipt of the application package for use of funds for a special project or for investment in public or social welfare utilities submitted by the insurer, the competent authority makes no objection thereto or does not require for supplementary or explanatory documents within 15 working days, the application shall be deemed as approved.

15Where the aforementioned supplementary or explanatory documents are required by the competent authority, if the competent authority makes no objection within 15 working days after the date of receipt of the supplementary or explanatory documents, the application shall be deemed as approved.

16If an insurer’s investment in a special project or a public investment or social welfare enterprise has any significant changes below after the investment has obtained approval from the competent authority, the insurer shall, within 7 working days after the occurrence of event, report the reasons and relevant information to the competent authority:

171. The invested entity has unexpected significant changes in its major business items or operational policies that the investment no longer aligns with the insurer’s original investment plan and purpose.

182. Insurer’s investment amount increases NT$100 million or more than the originally approved amount and reaches 20% or more than the originally approved amount. Notwithstanding the foregoing, the provision does not apply if the insurer undergoes capital increase in accordance with Subparagraph 1, Paragraph 3 of Article 7 or Subparagraph 1, Paragraph 1 of Article 10 herein.

193. The investment project’s time line falls behind the originally planned schedule or there are other situations that produce significant negative effect on financial assessment performed by the insurer.

20With regard to the report under the preceding paragraph, if the competent authority makes no objection, thereto or does not require supplementary information or explanations within 15 working days after the delivery of report to the competent authority, the report shall be deemed as being submitted for reference.

21When an insurer invests in an enterprise under Article 3 or Article 4 herein with approval of the competent authority, and there is a change to the enterprise’s director or supervisor appointed by the insurer or an independent director appointed by the invested enterprise, the insurer shall, within 7 working days after the occurrence of event, submit a report describing the changes and the compliance of such changes to the competent authority for reference.

65. Other circumstances regulated by the competent authority.

7For an insurer engaging in the investment set forth in preceding Paragraph, the ratio of total adjusted net capital to risk-based capital thereof should comply with the regulatory standard.

8If the invested entity is an entity regulated by the PPP Act and complies with the following investment amount and criteria, the insurer may invest in such an entity without going through the application procedure. The foregoing does not apply when an insurer makes an investment according to Article 3 or Article 4 herein, but the invested enterprise is still in development stage that requires environmental impact assessment (EIA) in accordance with the Environmental Impact Assessment Act and the EIA report has not been approved by the relevant regulatory authority:

91. The total amount of investment in one and the same project of the insurer is under NT$2 billion and 10% of its owner’s equity, and the following conditions are met:

10(1) The ratio of total adjusted net capital to risk-based capital of the insurer in the most recent period shall comply with the regulatory standard.

11(2) The documents of the investment project prescribed in preceding article have been submitted to and resolved and approved by the board of directors before the investment is made.

122. The total amount of investment in one and the same project of the insurer is under NT$5 billion and 10% of its owner’s equity, and the following conditions are fulfilled:

13(1) The financial conditions, corporate governance, and internal control of the insurer must fulfill the following conditions:

14(i) Both of the ratio of total adjusted net capital to risk-based capital of the insurer in the most recent period and the average ratio of total adjusted net capital to risk-based capital of the insurer over the most recent two years are 125% of the regulatory standard at least.

15(ii) The documents of the investment project prescribed in preceding article have been submitted to the board of directors and resolved and approved by over half of the directors at the board meeting attended by over two thirds of all directors before the investment is made.

16(iii) Except for a Taiwan branch of a foreign insurer, independent directors shall be appointed. In addition, except for the insurer entirely held by a financial holding company, an audit committee shall be established.

17(iv) There have been no major violations of the internal control procedure governing various applications of funds in the immediately preceding year, or the violations have been rectified and the rectification has been affirmed by the competent authority.

18(v) There have been no major sanctions or disciplinary actions related to the usage of insurer’s funds imposed by the competent authority in the most recent year, however, this does not include violations that have been rectified and affirmed by the competent authority.

19(2) The investment project complies with the financial standards set forth by the insurance association and filed with the competent authority for reference, has the guarantee or risk sharing mechanism provided by the authority in charge, and stipulates dispute settlement mechanism, and meets the following conditions:

20(i) The ratio of total adjusted net capital to risk-based capital of the insurer in the most recent period shall comply with the regulatory standard.

21(ii) The documents of the investment project prescribed in the preceding article have been submitted to and resolved and approved by the board of directors before the investment is made.

22The total amount of investment made in accordance with the PPP Act and mentioned in the preceding paragraph refers to the total amount of royalty, construction cost, and rent paid by the insurer under the investment contract.

23Where the insurer proceeds with investment in accordance with regulations in Paragraph 1 and Paragraph 3, shall provide the documents specified in Paragraph 1 of the proceeding Article submitted to the competent authority for subsequent review.

24The competent authority may, on a regular basis, audit the investment made by an insurer in such special projects, or public investments and or social welfare enterprises as are set forth in Paragraph 1 and Paragraph 3, and may, in light of the social and economic circumstances and the actual performance of the projects, impose restrictions on or require review of such investment.