Newsletter
Issue the Interpretative Letter for the standards and rules for investments in real estate by an insurance enterprise that can be used immediately and from which benefit may be derived
To implement Paragraph 1 of Article 146-2 of the Insurance Act, the FSC has been reviewing the relevant regulations on the real estate investment of insurance enterprises, depending on changes in economic and financial circumstances and the actual investment made by insurance enterprises, from time to time since 2009. The FSC issued the amended Interpretative Letter for the standards and rules for investments in real estate by an insurance enterprise that can be used immediately and from which benefit may be derived, per the letter Ref. No. Jin-Guan-Bao-Cai-Zi No. 10400084291 dated 24 September 2015. The amendment is explained as follows:
1. New addition: definition of acquisition date
It is clearly stipulated that the acquisition date on which the insurance company acquires the real estate shall mean the date of registration of transfer of ownership or the date of registration of the right of superficies. However, based on trust and for the protection of legitimate rights, for objects under contracts signed or awarded to bidders prior to 19 November 2012, the earliest of the dates on which the ownership was transferred and registered, the right of superficies was registered, the contract was signed or the bid was won shall apply in relation to the standards for real estate that can be used immediately and from which benefit may be derived after the insurance company filed with the competent authority for approval and recordation.
2. Deleted content: the request of submitting the audit report to the board of directors
Delete Subparagraph 3 of Point 3 of the Interpretative Letter, per the letter Ref. No. Jin-Guan-Bao-Cai-Zi No. 10402502361 dated 6 March 2015, issued by the FSC, "if the value of each object divided by its rental income exceeds thirty-five (35), the board of directors shall approve an efficiency improvement plan to use the benefits and the audit department shall submit quarterly audit report on the execution of the plan to the board of directors."
However, the FSC noted that insurance enterprises shall include investment income from relevant objects in risk management to evaluate the performance of its allocation of funds.