Newsletter
Partial Amendment to Insurance Act
President issued a decree (Ref. No. Hua-Tzung-1-Yi-10300085121) on 4 June 2014 to partially amend the Insurance Act effective on 6 June, 2014. Summary of main points of the amendment are as follows:
1. To strengthen the independence of directors and corporate governance, it is newly stipulated that insurance enterprises shall have independent directors and establish an audit commission to replace supervisors.
2. To review the suitability of insurance enterprises' exercise of shareholder's right to the company that such insurance enterprises invest in, restrictions are newly stipulated on insurance enterprises' exercise of voting right to elect directors and supervisors of the company that such insurance enterprises invest in. In addition, the calculation basis for shareholding limit on an insurance enterprise in a single company has been amended.
3. To accommodate the development of domestic capital markets and increase the flexibility of insurance enterprises' fund utilization, it is newly stipulated that the amount of the insurance enterprises' investment in foreign currency denominated securities or debt certificates listed on domestic stock exchange or traded in domestic over-the-counter market pursuant to the Insurance Act and in foreign insurance related businesses approved by the competent authority that such investment amount may not count toward the foreign investment amount will not count toward the foreign investment amount limit.