Taiwan Financial approved to inject new capital in insurance unitDecember 6 2017 by InsuranceAsia News Staff
Taiwan Financial Holding has received approval to inject new capital into its life insurance unit.
The approval, issued by the legislature’s Finance Committee, will allow the company to prop up its capital and ease the burden of negative interest spreads.
Taiwan Financial proposed adding NT$10 billion (US$332.93 million) to the capital of Bank Taiwan Life Insurance to improve its capital adequacy ratio, which has fallen to 168%.
The ratio is lower than the 200% requirement.
According to Taiwan Financial chairman Joseph Lyu, negative interest spreads from insurance policies sold in previous years continue to be a drag on profitability.
Pre-tax losses at the insurer stood at NT$3 billion and could balloon to about NT$4 billion this year, as the New Taiwan dollar’s appreciation could result in foreign exchange losses.
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