The Financial Supervisory Commission (FSC) yesterday placed Chaoyang Life Insurance Co under government receivership to prevent further deterioration of the company’s financial condition.“The company has repeatedly failed to carry out its proposed financial improvement measures and its negative net worth continued to worsen on an annual basis. It was NT$2.2 billion [US$65.23 million] in the red as of last month,” Insurance Bureau Director-General Jenny Lee said at a news conference.
Insurers with risk-based capital (RBC) ratios of less than 50 percent might be taken into government control to ensure the interests of customers and employees, she said.
The company is to present a NT$5.05 billion capital increase program before its board of directors tomorrow.
The RBC requirement establishes a minimum liquid reserve that protects a financial institution, its customers and the economy by ensuring that the firm has sufficient capital to sustain possible operating losses.
The commission emphasized that the company would continue its day-to-day operations and all ongoing insurance policies and contract terms would be unaffected by the government takeover.
The company has about 123,000 active policies, 98,000 policyholders, and 600 employees.
It is the third of the nation’s insurers to be put under government receivership in the 18 months after the takeover of Global Life Insurance Co and Singfor Life Insurance Co in August 2014.
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