Why Does the Financial Supervisory Commission Support Life Insurance? Key Reasons Revealed: Half-Year Report Becomes the Battleground
To assist the life insurance industry in smoothly transitioning by 2026, the Financial Supervisory Commission announced three measures on the 12th:
- Adopting the semi-annual average exchange rate to calculate RBC, smoothing out short-term exchange rate fluctuations.
- Raising the responsible reserve ratio by one point and adjusting mortality tables, releasing excess reserves to foreign exchange reserves.
- Introducing a plan to set aside foreign exchange reserves, along with a supporting plan for improving operational robustness.
These measures aim to increase the RBC of the life insurance industry's semi-annual report, enhance foreign exchange reserves to mitigate exchange loss, and save profits. The commission stated that operators must self-estimate the amount that can be released and have it signed by actuaries and confirmed by accountants. They must also propose a “Resilience Improvement Adjustment Plan,” which the commission will approve before allowing fund usage.
Currently, life insurance firms must achieve an RBC of 200% to enjoy a 15-year transition discount under the TW-ICS system, making the “half-year report” a critical battleground for this transition. Director Wang Li-hui of the Insurance Bureau emphasized that the half-year report is the declaration point for the transition, and companies need to clearly outline their future operational directions and improvement plans.
