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FSC sanctions Shin Kong Life Insurance

During a targeted examination on the securities investment operations at Shin Kong Life Insurance, the FSC discovered serious internal control deficiencies at Shin Kong Life in its: conduct of evaluation and control of asset allocations and solvency; investment strategies; risk control operations; and prevention of conflicts of interest among its equity product traders. The deficiencies, moreover, were serious enough to pose a possible hindrance to sound management of the company, in violation of Article 5, Paragraph 1, Subparagraphs 4, 5, and 14 of the “Regulations Governing Implementation of Internal Control and Auditing System of Insurance Enterprises” (which were issued by the FSC upon the authority of Article 148-3, Paragraph 1 of the “Insurance Act”). The FSC, acting in accordance with Article 171-1, Paragraph 4 of the “Insurance Act,” handed the company an administrative fine of NT$27.6 million. Also, acting in accordance with Article 149, Paragraph 1 of the “Insurance Act,” the FSC issued 5 official reprimands, lowered the company‘s foreign investments cap to 39% of enterprise funds, and declared that, until the total amount of the company‘s current foreign investments meets the new cap, Shin Kong Life will not be allowed to make any new foreign investments. The company‘s investments must not exceed the risk appetite adopted by its board of directors, and until it gets existing investments in line with the risk appetite limit the company will not be allowed to make new investments in domestic or foreign stocks or ETFs. In addition, Shinkong Life‘s Chairman Wu was suspended from his positions as a director and as Chairman until the board of directors completes its current term, and as long as Mr. Wu remains suspended from his duties as a director and as company chairman, the company will not be allowed to pay Mr. Wu any form of remuneration or benefits. The FSC also ordered that Shinkong Life‘s Vice President Yuan be dismissed from his positions as Vice President and Chief Investment Officer, and prohibited his appointment to any investment-related position.
Visitor: 2837   Update: 2021-04-01
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