Newsletter
Insurance Transactions Between Taiwan and Mainland China
On June 29, 2010, representatives from Taiwan and Mainland China signed the Cross-Strait Economic Cooperation Framework Agreement and the Cross-Strait Intellectual Property Right Protection Cooperation Agreement at the fifth Chiang-Chen Meeting held in Chongqing, China. In connection with the early harvest lists and the liberalization of trade rules under the new trade pact, China will allow Taiwanese insurance groups to enter the Chinese market by way of merger or strategic alliance if they satisfy certain conditions (which are: (1) the total assets of the group must be worth US$5 billion or more; (2) at least one member of the group has been in operation for at least 30 years, and (3) at least one member of the group has had a representative office in China for at least two years). Taiwan, on the other hand, did not open its insurance market.
Around three months before the trade pact was signed, the Financial Supervisory Commission of the Executive Yuan revised the Regulations Governing Approval of Insurance Transactions and Investments between the Taiwan Area and the Mainland Area to allow Chinese insurance companies to set up representative offices in Taiwan and make equity investment in Taiwan. However, the representative offices can conduct only non-operating activities such as collection of information, liaison and market research, and their equity investment in Taiwanese companies will also be subject to certain restrictions.