Taiwanese life insurers warned against investment practicesMarch 13 2018 by InsuranceAsia News Staff
The Financial Supervisory Commission in Taiwan has warned the country’s insurance companies about their risky investment portfolios.
According to FSC vice-chairman Cheng Cheng-mount, fixed-income assets constitute less than 20% of local life insurers’ total investments — compared to between 80% and 90% of the portfolios of their peers abroad.
Cheng revealed the staggering data on the sidelines of a forum on economic trends and the bond market outlook in Taipei.
In addition, Cheng noted that local life insurers had cut their government bond holdings to 8% at the end of last year. The historical average was 10%, he said.
Foreign life insurers traditionally make the majority of their investments in government debt issued in their home markets.
But in Taiwan, local life insurers have raised their overseas investments to levels close to the regulatory ceiling.
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Chinese regulator is examining could increase the cap on investments in equities of insurers' assets.
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The move will help insurers and reinsurers to transfer foreign capital home.
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Insurers will be allowed to use the instruments to hedge their risks.