Insurance Deregulations
Regulations regarding asset management on insurance companies will be greatly eased. The limit of foreign assets which can be invested by insurance businesses will be expanded, while the ownership requirement of investment subsidiaries will be abolished as well.
The Financial Services Commission (FSC) heralded on April 24 that it will change a revised bill related to restrictions on insurance business operation as a follow-up measure of “Insurance Industry Competitiveness Reinforcement Roadmap.”
Until now, insurance firms have been able to invest foreign currency securities only when they have credit ratings approved by international credit ratings agencies, including Standard & Poor's. However, the businesses will now be able to trade foreign currency securities when they have the investment-grade status received from credit rating firms that are selected by financial supervisory authorities of countries without credit ratings from international credit ratings agencies.
The limit of financial derivatives transaction will also be eased. So far, the limit of derivatives traded through financial investment products transaction clearing firms has been produced based on agreed prices but it will be based on customer margins in the future.
In addition, the FSC has abolished the ownership requirement of investment subsidiaries, such as venture capital (VC), real estate investment trusts (REIT) and private equity fund (PEF), while relaxing regulations on the investment of foreign currency-denominated revenue securities, which requires deliberation of investment committees, in order to help insurance companies to make an overseas investment more easily.
The FSC will gradually bring the revision to effect from August.