TAIPEI, Taiwan -- The Financial Supervisory Commission (FSC) announced it has taken over financially troubled Kuo Hua Life Insurance Co. due to its weak finances.
FSC Chairman Sean Chen said at a press conference the move took effect at 5:30 p.m. yesterday, stressing that the interests of two million policyholders will not be affected because the insurance firm was not “dissolved.”
He said the Insurance Stabilization Fund will take over the management and business operations of Kuo Hua Life with the assistance from Taiwan Insurance Institute (TII). The takeover period is tentatively set for nine months which can be either cut short or extended.
Kuo Hua has failed several times to raise its capital as requested, the Cabinet-level commission said in a statement.
Shareholders of Kuo Hua recently adopted a resolution to slash corporate capital by NT$2 billion and then raise NT$4 billion in new capital.
An official supervising the stabilization fund said the financial restructuring plan will be accelerated. The extent of capital reduction and replenishment will be much bigger than the firm's own plan in order to beef up the financial viability of the company and its customers, he added.
Kuo Hua's total assets amount to about NT$246 billion but had run into a net deficit of NT$57.9 billion as of the end of June.
FSC Chairman Chen said the company will have a good chance to stand on its own feet again soon if the financial rescue plan works well and the staff of the company exert concerted efforts.
But people serving as board directors and supervisors of Kuo Hua in the past three years will be held accountable for any irregularities, if there were any, during the period, he said.
In addition to maintaining the normal operations at the insurance firm, the Insurance Stabilization Fund will invite existing shareholders to purchase the new shares to be floated or help find other interested investors.
The fund itself may also consider subscribing to the new stakes.
Kuo Hua became the first life insurance firm in Taiwan taken over by the government after Kuo Kuang Life Insurance was placed under government management almost four decades ago in 1970.
Kuo Hua's non-life insurance affiliate was already taken over by the government earlier for financial woes. In January, the FSC asked the TII to take over the operation of financially troubled Walsun Insurance Limited, a non-life insurer, to help deal with its liabilities and assets and safeguard customers' interests.
08-05-2009, 10:43 AM
FSC takes over Kuo Hua Life Insurance 
Similar Threads 
Linear Mode
