To beef up the financial competency of the troubled insurer and its customers
In what is being considered as an assurance to two million policyholders, Financial Supervisory Commission (FSC), the financial regulator of Taiwan, has taken over the cash strapped Kuo Hua Life Insurance – reported China Post.
With this, the Taiwan-based Kuo Hua has become the first life insurance company in Taiwan to be taken over by the government, after Kuo Kuang Life Insurance was placed under government management in the early 1970s. Kuo Hua’s non life insurance unit was already taken over by the Taiwan government due to its bad financial health.
Sean Chen, chairman of FSC said that the Insurance Stabilization Fund will undertake the management and business operations of Kuo Hua, taking help from Taiwan Insurance Institute (TII).
The company had failed to raise its capital many times in the past. Its shareholders had even adopted a resolution recently to cut corporate capital and then raise NT$4 billion in new capital. As a result, apart from managing the normal operations of the insurance company, the Insurance Stabilization Fund will allow the existing shareholders to buy the new shares to be floated or help find other interested investors – reported the newspaper.