Shin Kong Financial Holding Co (新光金控) yesterday said that its insurance unit would adjust its investment portfolio after being banned from buying new stocks a day earlier by the Financial Supervisory Commission (FSC).
“We will research what we can do based on the commission’s specific instructions after we receive the regulator’s formal documents,” Shin Kong Financial spokesman Sunny Hsu (徐順鋆) told the Taipei Times by telephone.
The commission on Tuesday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$941,722) for reckless investment, and demanded that the insurer reduce its overseas investment ratio from 43 percent to 39 percent.
The fine would affect the insurer’s return on investment, but rising sales of foreign currency-denominated policies would help offset any negative effects, Hsu said.
Insurance companies are allowed to use foreign funds generated from their foreign currency-denominated policies to invest overseas without any restrictions, as there are no foreign exchange risks.
First-year premiums from foreign currency products totaled NT$32.24 billion for the first six months, making up 73.9 percent of all first-year premiums, the highest level Shin Kong Life has ever reported, company data showed.
The insurer cannot buy new local stocks until it lowers its overseas investment ratio, and Hsu said it remains unknown how long it will take for the ratio to drop to 39 percent.
Shin Kong Life had a pool of NT$3.02 trillion investment funds as of the end of June, with a recurring yield of 3.32 percent.
As Shin Kong Life chairman Eugene Wu (吳東進) was suspended by the commission on Tuesday, Shin Kong Financial chairman Victor Hsu (許澎) is to fill in for him as a board member, the insurer said in a filing to the Taiwan Stock Exchange (TWSE), adding that it has not yet appointed a new chairperson.
The commission on Tuesday also demanded that Shin Kong Life set up a better mechanism for its asset and liability management committee as it was responsible for the reckless investment decisions.
The committee did not hold meetings frequently and basically gave guidelines to the firm’s investment team, Hsu said, without saying whether it would be abolished or overhauled.
The commission’s press release announcing the Shin Kong Life fine reached more than 11,000 page views as of press time last night, a relatively high number for a government press release.
“All insurers are studying what mistakes Shin Kong made, trying to improve themselves to avoid a similar penalty,” Peng Jin-lung (彭金隆), chairman of National Chengchi University’s department of risk management and insurance, said by telephone.
As major insurance companies are running more internal committees to manage matters, the regulator is paying more attention to whether the committees’ power matches their responsibility and accountability, and whether companies have solid self-control measures in place, Peng said.
The commission’s regulations on insurance companies are likely to become more strict, as insurers have more money from the public and a bigger influence on capital markets, he added.
CHANGE OF FORTUNES: Concern over a pricey valuation and the risk of tighter US curbs on chip sales to China have poured cold water on TSMC’s bullish momentum Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares fell the most in three months yesterday upon trading resumption, joining a global technology rout as investors dramatically soured on the promises of artificial intelligence (AI). The shares declined 5.62 percent to close at NT$924 in Taipei, dragging down the benchmark TAIEX, which fell 3.29 percent to 22,119.21 points amid a technical correction, Taiwan Stock Exchange data showed. Other chip stocks also fell, with ASE Technology Holding Co (日月光投控) plunging 9.86 percent, MediaTek Inc (聯發科) dropping 2.35 percent, Realtek Semiconductor Corp (瑞昱) falling 1.33 percent and United Microelectronics Corp (聯電) retreating 1.17 percent, while Apple
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
South Korean battery maker LG Energy Solution Ltd is slowing construction of its third plant with General Motors Co (GM) in Michigan amid lackluster demand for electric vehicles (EVs) and worries about political change in the US. LG Energy is “adjusting the speed of overall investment” and “seeking ways for the flexible operation” of its plants, the company told Bloomberg News yesterday, but added that it does not mean the company is suspending construction. LG and General Motors started construction of the facility in 2022, pledging to spend about US$2.6 billion. Operations were supposed to begin in the first half of