International insurers unable to leave local market: reports
The China Post news staff
October 14, 2012, 12:03 am TWN
The China Post news staff--The Financial Supervisory Commission (FSC, 金融監督管理委員會) has rejected Canadian-based insurance company Manulife's proposed withdrawal from the Taiwan market, according to the Financial Times.
The withdrawal refusal issued by the FSC has sent shockwaves all the way to the Canadian government and has also sparked controversy within Taiwan's Ministry of Foreign Affairs.
In a statement, the Canadian government slammed the FSC's move as a violation of the equality assured by the World Trade Organization's free trade operation code.
Manulife is among the many international insurance companies which are attempting to withdraw from the Taiwan market, according to the reports. Other insurers reportedly seeking to exit include Aviva, New York Life, MetLife and TransGlobe.
The FSC has stated that in order for Manulife and other international insurance firms to withdraw from the local market, assets from their Taiwan branches need to be merged, sold or redirected to a potential subsidiary.
Under FSC requirements, however, willing buyers require an insurance business permit to legally operate the purchased assets.
Yuanta Financial Holdings (元大金控), a perspective buyer of Manulife's assets, has stated it would be difficult to receive the insurance business permit even after acquiring the company.
A three- to five-year business plan is required to be submitted to and evaluated by the FSC before the permit can be issued, according to an Apple Daily report.
Yuanta Deputy General Manager Chuang Yu-ye (莊有德) has refused to comment on the issue. Manulife and Aviva also declined to comment.
The FSC, which is yet to issue an official statement on the matter, did not confirm nor deny the reports.