The capital adequacy of the nation’s life insurers would remain healthy even if the New Taiwan dollar continues trading above NT$29 to the US dollar, Financial Supervisory Commission Chairman Thomas Huang (黃天牧) told lawmakers at a meeting of the legislature’s Finance Committee on Thursday.
The NT dollar climbed above the central bank’s alleged threshold of NT$29 on Oct. 6 and central bank Governor Yang Chin-long (楊金龍) earlier this month said that it might become the new normal for the local currency to trade above NT$29 against the greenback.
In light of the strong NT dollar, the Insurance Bureau in August ran a stress test on the nation’s life insurance companies to assess the impact of exchange-rate risk on their finances, Huang said.
Photo: Wu Chi-lun, Taipei Times
In the test with a scenario that the local currency was trading at NT$28 to the US dollar, the net-worth-to-assets ratio of all the nation’s life insurance companies remained above 3 percent, the regulatory minimum, except for Hontai Life Insurance Co (宏泰人壽), the commission said.
Hontai Life, which registered an equity-to-asset ratio of 1.88 percent at the end of June, has been asked to improve its financial strength and if the insurer fails to lift the gauge above 3 percent by the end of this year, the commission would impose corrective measures on the firm, such as limiting its operations, it said.
“Overall, it seems that local life insurance companies could handle a strong NT dollar,” Huang told the meeting.
Increased net profit at life insurance companies last year are expected to help cushion their foreign-exchange losses, he said.
Local life insurance companies reported combined foreign-exchange losses of NT$195 billion (US$6.74 billion) as of the end of August, up 32 percent from a year earlier, as the fast appreciation of the local currency made their hedging strategies ineffective and slashed the monetary value of their assets denominated in US dollars, commission data showed.
However, investment gains, thanks to a booming local stock market and volatility on global financial markets, helped offset those losses, enabling the firms to post a combined pretax profit of NT$186 billion for the first eight months of the year, up 12 percent year-on-year, the data showed.
Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain the third-largest IC supplier this year, unchanged from last year, IC Insights said yesterday. IC designer MediaTek Inc (聯發科) is expected to become the 11th-largest, up from 16th last year, the semiconductor market research firm said. TSMC is expected to post US$45.42 billion in sales, up 31 percent from last year, IC Insights said in a report released on its Web site. TSMC’s sales growth is largely due to a surge in orders from Apple Inc and HiSilicon Technologies Co (海思半導體) — two of its major clients — which
SETTING AN EXAMPLE: The commission suspended the bank’s two top executives as ‘a warning to all banks,’ while the fine is the biggest to be given to a bank in a single case The Financial Supervisory Commission (FSC) yesterday fined E.Sun Commercial Bank (玉山銀行) NT$20 million (US$693,698) over a theft scandal and punished the bank’s two top executives. A customer relationship manager surnamed Pan (潘) at the bank’s branch in Kaohsiung’s Fengshan District (鳳山) stole NT$140 million from 41 clients over the past seven years, the commission said. Pan secretly transferred the stolen money to accounts belonging to her and her family members by using clients’ debit cards, passwords or documents that were stamped using the clients’ personal stamps between July 2013 and June this year, the commission said. The commission suspended Ben Chen (陳炳良), the
With the speed cryptocurrency is emerging as the millennial generation’s alternative asset of choice in India, it is hard to imagine that just two years ago a couple of blockchain pioneers were briefly in police custody. Sathvik Vishwanath and Harish BV, cofounders of a then five-year-old start-up, were arrested in late 2018. No, they had not pulled off a shady initial coin offering. Their “crime” was that they put up a kiosk in a mall in Bangalore where customers could swap bitcoin, ether or ripple for cash or vice versa. That was the whole point of unocoin, their crypto token exchange.
BREATH OF LIFE: The firm said the under-utilized plant should start mass production in the first quarter, timed to coincide with Intel Corp’s release of its Ice Lake server chip Hon Hai Precision Industry Co (鴻海精密) plans to assemble key components for Google servers at its plant in Wisconsin, people familiar with the matter said, finally breathing life into a factory that US President Donald Trump hailed as crucial to bringing manufacturing back to the US. The company has decided to locate production for this new contract at the existing complex rather than make the components at home or in China, the people said, asking not to be identified. The under-utilized plant should start mass production in the first quarter, timed with the release of Intel Corp’s Ice Lake server chips,