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Association to push for more government deregulation in 2014

TAIPEI, Taiwan -- The Life Insurance Association, R.O.C. (LIA, 人壽保險商業同業公會) yesterday announced its intention to urge the government to expand deregulatory measures during its pre-Chinese New Year's banquet.

According to Chairman Hsu Shu-po (許舒博), the LIA this year will focus its efforts on lobbying regulators to allow life insurance companies overseas investment, including real estate, municipal bonds, government bonds, collateralize lending and bonds issued by banks abroad with a risk-based capital (RBC) ratio of 200 percent.

On investing in overseas real estate properties, Hsu stated that the LIA will compile a list of ideal candidate regions for review by the Financial Supervisory Commission (FSC, 金管會). Hsu added that overseas real estate investments are likely to utilize avenues such as trusts or special purpose vehicle (SPV) routes, where a designated subsidiary borrows the funds from its parent company for the transaction.

The LIA also hopes to ease risk assessment requirements for the life insurance sector, saying that RBC rating should be less stringent if a company's investments are less than 40 percent of available capital. In addition, according to the LIA's findings, municipal bonds issued by foreign governments are not subject to higher risk levels than corporate bonds, and may be less susceptible to default. A report will be supplied to regulators to discuss the feasibility of investing in foreign municipal bonds, said the LIA.

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