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On 12 December 2000, the Ministry of Finance (MOF) announced amendments to its Guidelines on the Scope and Content of Overseas Invest-ments by Insurance Companies. The main points are as follows:
The upper limit on an insurance company's overseas investments is raised from 10% to 20% of its capital (shareholders' equity plus various reserves).
Under a new provision, as well as being per-mitted to invest in overseas insurance compa-nies, an insurance company may also invest in the holding company of an overseas insurance company in which it is investing.
The combined total of an insurance company's overseas investments and investments requir-ing special approval must not exceed 40% of its paid-in capital.
The overseas loans business is deleted from the list of permitted overseas investments.
To hedge its risk when investing overseas, an insurance company may trade in derivative products with the approval of the MOF.
