Regulations Governing Implementation of Internal Control and Auditing System of Insurance Enterprises Article 11

An insurance enterprise should set up an internal audit unit that is directly subsidiary to the board of directors which should perform audit business honestly and independently. The chief auditor is required to report its audit business to the board of directors and supervisors or audit committee at least semiannually.The internal audit unit shall establish a chief auditor system to manage all audit business. The qualifications of chief auditor shall comply with the Regulations Governing Required Qualifications for Responsible Persons of Insurance Enterprises, and has the power as an vic general manager. The auditor is not allowed to take a job that will cause conflicts or limitations to the audit work.The employment, dismissal or transfer of chief auditor shall have the consent of more than two-thirds of the board of directors and report to the competent authority for ratification.If an insurance enterprise has an audit committee, the appointment, dismissal or transfer of chief auditor mentioned in the preceding paragraph shall first have the consent of at least the majority of all audit committee members. In the absence of the consent of the majority of all audit committee members, the decision of the audit committee shall be recorded in the meeting minutes of the board of directors. Where an insurance enterprise does not have an audit committee but independent directors, any dissenting opinion or reservation expressed by the independent directors regarding the chief auditor shall also be recorded in the meeting minutes of the board of directors.