Taiwan Life Insurance shareholders have voted to cancel a planned merger with CTBC Financial, the parent company of Chinatrust Commercial Bank.

CTBC Financial, which signed an agreement in October 2013, to acquire Taiwan Life in a TWD26.6bn ($904m) deal, revealed the Taiwan Life’s decision in a stock exchange filing.

Reports emerged that Taiwan Life’s shareholders overturned a board decision in April to extend the deadline to decide on a merger from April 30 to June 30 and cancelled all consolidation moves.

Taiwan Life started the merger claiming that the business environment is becoming difficult for insurers without the support of banks and other financial affiliates to boost cross-selling efficiency.

A statement by Taiwan Life Insurance was cited by taipeitimes.com as saying: "Taiwan Life has yet to give a reasonable account today for the turnabout that is hurting the company’s creditability, image and share price."

As per the original agreement, CTBC was supposed to take over the insurance firm through a share swapping arrangement.

In a statement, the two companies said that each share of Taiwan Life will be exchanged for 1.44 shares in CTBC Financial.

If the planned takeover would have materialized, it would have enabled CTBC to position itself among the ten leading insurance carriers in Taiwan.

Earlier in April 2014, Chinese Financial Supervisory Commission (FSC) granted approval to the planned acquisition of Taiwan Life Insurance by CTBC Financial.