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Amendments to the Regulations Governing Capital Adequacy of Insurance Companies
To accommodate Articles 163-4 to 163-6 of the Insurance Act which grades capital adequacy ratio into five rankings and provides related supervision, the FSC issued the amended Regulations Governing Capital Adequacy of Insurance Enterprises (“Regulations”), per letter Ref. No. Jin-Guan-Bao-Cai-Zi No. 10402503001 on 18 May 2015. The Regulations will take effect on 1 January 2016. The main points are as follows.
1. Identify, monitor and control companies failing to meet capital adequacy ratio requirements
Clearly stipulate that if the capital adequacy ratio of an insurance company is graded as inadequate, significantly inadequate, or seriously inadequate, the competent authorities shall take relevant measures.
2. Disclosure of capital adequacy ratio
Full disclosure may contribute to the soundness of market and promotion of economic efficiency. To strengthen risk management of insurance companies, insurance companies shall file the capital adequacy ratio update each year within three months after the end of each fiscal year and their half-year update on the capital adequacy ratio shall be filed within two months after the end of each half of each fiscal year.