Regulations Governing Foreign Investments by Insurance Companies Article 15-1

Where an insurance company satisfies the requirements enumerated below, the limit on foreign investment may be flexibly adjusted and calculated based on the flexible calculation formula within the maximum limit set forth under Article 146~4, Paragraph 2 of the Act after being submitted to and approved by the competent authority:I. The Foreign-currency Denominated Non-investment-linked Life Insurance Business as approved by the competent authority (hereinafter referred to as the Subject Business).II. Where satisfactory to the requirements set forth in Paragraphs I~III of the preceding Article.III. Where the various reserve funds amortized in accordance with the relevant requirements of the Act have been utilized for the fund utilization items set forth under the Act in the same foreign currency(ies) of the Subject BusinessThe term “flexible adjustment formula” as set forth in the preceding paragraph denotes the limit on foreign investment＝The limit on foreign investment approved under Paragraph IV of the preceding Article × (1＋ Various reserve funds for the Foreign-currency Denominated Non-investment-linked Life Insurance Business).Where the insurance company intends to calculate the investment limit in accordance with Paragraph I, it shall apply to the competent authority with the following documents for approval beforehand:I. Statements and supporting certificate(s) to prove satisfactory to the requirements set forth in Paragraphs I~III of the preceding article.II. Statements and supporting certificate(s) to prove no major fault in internal control handling procedures with regard to the usage of insurer’s funds over the past year, or the remedial measure for the fault, if any, have been satisfactorily implemented and officially acknowledged by the competent authority.III. The concrete evaluation opinions submitted by the certifying actuarial personnel or the external valuation institution about the appropriateness of the asset & liability match.IV. Integral Investment Handbook including the internal risk management system and relevant operating norms.V. Descriptions of the status quo of the Subject Business.VI. Statements and supporting certificate(s) to prove that the various reserve funds amortized in accordance with the Act have been utilized for the capital utilization items required by the Act for the Subject Business to be received, paid in the same foreign currency(ies) in full.VII. Statements and supporting certificate(s) to verify the limit on foreign assets investment portfolio, performance, strategies, risk tolerance extent and overall risk management policies and systems as traced and reviewed by the board of directors case by case over the past year.VIII. Statements of various reserve funds amortized and about the proof of adequacy thereof.IX. The latest financial statements as audited or verified by the Certified Public Accountant.X. Other document(s) as required by the competent authority.Where an insurance company has been approved by the competent authority for calculation of the limit on foreign assets investment in accordance with Paragraph I, and in the Subject Business it is found that the various reserve funds amortized under the Act have not been utilized for the fund utilization items for the same currency(ies) under the Act, it shall complete the remedial adjustment plan, and get it approved by the board of directors and submitted to the competent authority for information within one month starting from the date of occurrence of such fact.Where an insurance company proves to have failed to operate in accordance with the preceding paragraph, and to fail to complete adjustment based on the adjustment plan or after it is approved by the Financial Supervisory Commission, Executive Yuan for calculation of the limit on foreign assets investment in accordance with Paragraph I, it has accumulated more than twice the required adjustment plans, the competent authority may annul the approval under Paragraph I.