The Taiwan insurance industry has experienced a bumper year, in terms of pre-tax profits.
But the chairman of Taiwan’s Financial Supervisory Commission (FSC) has nonetheless issued a warning to insurance firms – that penalties will be dished out to companies that fail with their corporate governance.
FSC chairman Wellington Koo, who spoke at a forum hosted by the Taiwan Insurance Institute, said that the commission will adopt a “carrot and stick” approach in regulating financial companies, and that improving corporate governance was a major priority.
Koo lamented poor support for a financial stewardship code that was launched last year, with only 9.8% of insurers in Taiwan having subscribed to the code.
“The stewardship principles are an important tool to help companies build a culture of ethics and compliance, as external pressures from regulators alone cannot safeguard the interests of the investing public,” Koo said.
While Koo did not name any of the firms that may be punished, an article by the Taipei Times speculated that financial services firm SinoPac Financial Holdings Co., which has numerous infractions, could be among those sanctioned. State-run lenders Bank of Kaohsiung and First Commercial Bank could also be punished, based on an erroneous loan to the troubled Ching Fu Shipbuilding Co.
At the same forum, Taiwan Insurance Institute chairman Kuei Hsien-nung said that the insurance industry has had robust growth so far this year.
According to Kuei, life insurance companies posted NTD112.1 billion (US$3.73 billion) in pre-tax profits for the first 10 months of 2017, a 17% year-on-year increase, while premium income rose 13.4% to NTD2.78 trillion (US$92.57 billion).
Taiwan’s general insurance industry, on the other hand, saw pre-tax profits increase by 13.4% to NTD13.3 billion (US$442.9 million), while total premiums rose 7.4% to NTD130.3 billion (US$4.34 billion).
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