Regulations Governing Foreign Investments by Insurance Companies Article 15-2

Any insurance company that meets the following conditions may file an application with the competent authority for the amount to be excluded from the calculation of the limit on the total amount of foreign investment under the first part of Paragraph 2, Article 146-4 of the Act (Hereinafter "Excluded Foreign Investment Amount"):1. Meeting the requirements under Subparagraphs 1 to 3, Paragraph 1 of the previous article.2. The total amount of funds utilized in domestic investments by the insurance company as a percentage of the amount of funds that may be utilized, less various reserves for non-investment-linked life insurance business collected and paid in foreign currency, meets the requirement of the applicable limit stipulated under these Regulations.3.The insurer’s ratio of total adjusted net capital to risk-based capital for the most recent period is above the regulatory standard.4. The board of directors will determine the risk limit every year and the risk control committee or the risk control department shall perform regular control.The Excluded Foreign Investment Amount referred to in the previous paragraph is calculated as follows:Excluded Foreign Investment Amount = (40% of various reserves for non-investment-linked life insurance business, or various reserves for non-investment-linked life insurance business collected and paid in foreign currency, whichever is lower) x (1 – determined percentage) - total amount of investment from various reserves for non-investment-linked life insurance business collected and paid in foreign currency in securities, bonds or Sukuk denominated in foreign currencies that are listed or traded over-the-counter as specified in Article 5, Subparagraph 12.“Determined percentage” referred to in the previous paragraph means the percentage of foreign investment by insurance company determined by the competent authority under Paragraph 4, Article 15. If such percentage is changed, the above limit shall be re-calculated based on the changed determined percentage.In filing an application for Excluded Foreign Investment Amount, the insurance company shall submit the following documents to the competent authority for approval:1. Documents listed under Paragraph 3 of the previous article.2. Explanatory or justification document showing compliance with Subparagraphs 2 to 4, Paragraph 1.3. Other documents as required by the competent authority.In cases where an insurer meets the relevant requirements as set forth in the preceding paragraph, and has obtained the approval from the competent authority that the investment shall not be included in the foreign investment limits in accordance with Paragraph 2, such company may submit the documents as required in the preceding paragraph, a business development plan, the proposed amount that is not included in the foreign investment limits and an explanation of assessment of reasonableness thereof, to the competent authority for special approval, and the formula set forth in Paragraph 2 is not applicable.After the competent authority grants an approval for any insurance company to calculate the amount of foreign investment in accordance with the flexible adjustment formula under the previous article, when the competent authority grants approval for the Excluded Foreign Investment Amount in accordance with Paragraph 1, it shall cancel the approval for calculation of foreign investment amount calculated based on such flexible adjustment formula.In case any of the following occurs after an insurance company is granted approval of Excluded Foreign Investment Amount, it shall prepare an adjustment plan, have it approved by its board of directors and file it with the competent authority for reference. The following correction shall also be completed within one month from the occurrence of the fact:1. The various reserve funds set aside under the Act for the operation of any non-investment type of personal insurance activity have not been utilized for the fund utilization items for the same currency(ies) under these regulations.2. Failure to comply with Subparagraph 2, Paragraph 1.Any insurance company fails to comply with the previous paragraph, fails to complete adjustment in accordance with the adjustment plan or fails to file the adjustment plan as required under the previous paragraph for 2 or more times on accumulated basis, the competent authority may revoke the approval for Excluded Foreign Investment Amount under Paragraph 1 and 5.