The FSC issued an interpretative ruling on July 1, 2016 to strengthen the regulations governing FX basket hedge transactions of insurers. According to the ruling, FX basket hedge transactions by insurance companies for FX hedging purpose are transactions in which the underlying instruments of the hedging derivatives are different from the hedged item as stipulated in subparagraph 3, paragraph 2 of Article 2 of Regulations Governing Derivatives Transactions Conducted by Insurance Companies and thus he requirements for internal financial derivative transaction procedure shall apply.

Moreover, insurance companies shall specify all underlying instruments of the hedging derivatives and hedged items in formal written documents before the transaction. Records about components of the FX basket hedging instruments and their weighting methods or models should be kept and such methods or models faithfully followed when carrying out the transactions.