The Financial Supervisory Commission amended relevant regulations Nov. 11 to allow insurance firms to increase their investment in companies involved in public infrastructure projects.
According to the new rules, insurance companies can now own up to 25-percent paid-in capital of such companies, including electricity suppliers, telecom providers, and transport infrastructure and public housing companies. The previous investment ceiling was just 10 percent.
However, insurance firms will still not be allowed to have representatives serve on the board of directors of the companies in which they own a stake.
Also, the regulation restricting an insurance company’s investment in infrastructure projects to 10 percent of its total working capital has been kept in place.
According to sources, domestic life insurance companies had a total of roughly NT$10.35 trillion (US$338.99 billion) in working capital as of the end of this August. Their actual investment in public infrastructure projects at that time stood at just over NT$23.9 billion, leaving a lot of room for further investment in such projects.
Also under the revised regulations, insurance companies will be allowed to purchase up to 10 percent in value of the securities or bonds issued to finance individual infrastructure projects.
FSC officials said it is hoped the new rules will encourage more investment by the insurance sector in major government-led infrastructure projects, including those to develop the six emerging and four smart industries. (SB)