Taiwan expects to adopt “IFRS 17: Insurance Contracts” in 2026, which will require evaluation of insurance liabilities at fair value. In the Insurance Capital Standard (ICS) 2.0 issued by the International Association of Insurance Supervisors (IAIS) in November 2019, assets and liabilities are both measured at fair value. Using the same basis of measurement in accounting systems and solvency systems helps companies to carry out comprehensive asset-liability management. Therefore, by making reference to the ICS, the FSC develops the new generation insurance solvency regime, which can better reasonably reflect insurers’ overall risks, safeguard the interests of policyholders, maintain financial stability, and make Taiwan’s insurers more internationally competitive.

 

 

With an eye to how this new regime will affect business, insurers will be encouraged to adjust their financial and operational structure as soon as possible and waste no time in directing needed resources to the undertaking so that insurers would improve their financial health. To smoothly promote the new regime and take a gradual approach toward aligning with international practices, the FSC is planning to adopt the new

solvency regime in three phases:

1. Phase 1 (on-site field testing phase), 2020 - 2021: This phase will include the conduct of on-site field testing and research projects, and the drafting of localized supervisory rules.

2. Phase 2 (parallel run phase), 2022 - 2024: This phase will include parallel run each year and the drafting of transitional measures and localized supervisory rules, and there will be review and amendments of supervisory legislation.

3. Phase 3 (preparatory phase), 2025: During this period, insurers will review all related process to implement the new regime.

4. Implementation timetable: Implementation of the New Generation Insurance Solvency Regime is scheduled to take place in 2026, to coincide with the adoption of IFRS 17.