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Interpretation Letter of Restrictions for Responsible Persons of Financial Institutions Serving Concurrent Positions as Directors or Supervisors of Insurance Enterprises

Trisha Chang/Wei-Shun Hsu


On March 20, 2020, the Financial Supervisory Commission ("FSC") issued an interpretation letter, Ref. No. Jin-Guan-Bao-Sho-Zi No. 10904906651, of the principles for responsible persons of financial institutions serving concurrent positions as directors or supervisors of insurance enterprises as follows:
 
1.     According to the proviso in Paragraph 3 of Article 4 of the Regulations Governing Required Qualifications for Responsible Persons of Insurance Enterprises, Paragraph 1 of Article 12 of the Regulations Governing Qualification Requirements for the Founder or Responsible Persons of Financial Holding Companies and Concurrent Serving Restrictions and Matters for Compliance by the Responsible Persons of a Financial Holding Company, Proviso in Paragraph 3 of Article 3-1 of the Regulations Governing Qualification Requirements and Concurrent Serving Restrictions and Matters for Compliance by the Responsible Persons of Banks, Proviso in Subparagraph 13 of Paragraph 1 of Article 2 of the Regulations Governing Required Qualifications for Responsible Persons and Required Trust Expertise or Experience for Operations and Managerial Personnel of Trust Enterprises, Proviso in Article 17 of the Credit Cooperatives Act of the Republic of China, Proviso in Subparagraph 13 of Paragraph 1 of Article 4 of the Regulations Governing the Responsible Persons and Business Staff Members of Bills Houses, Proviso in Paragraph 1 of Article 11-1 of the Regulations Governing Responsible Persons and Associated Persons of Securities Firms, and the Proviso in Paragraph 1 of Article 7-1 of the Regulations Governing Responsible Persons and Associated Persons of Futures Commission Merchants, where there is an investment relationship between an insurance enterprise and a financial institution, the responsible person of a financial institution may concurrently serve as a director or supervisor of an insurance enterprise or may do so after obtaining approval from the competent authority.
 
2.     The "financial institutions" in said interpretation letter refer to insurance enterprises (excluding insurance agents, insurance brokers and insurance surveyors), financial holding companies, banks, trust companies, credit cooperatives, credit department of a farmers' (fishermen's) associations, bills finance companies, securities enterprises, securities finance enterprises, securities investment trust enterprises, securities investment consulting enterprises or futures enterprises.
 
3.     The "investment relationship" in said interpretation letter means
(1) The financial institution directly invests in the insurance enterprise.
(2) A holding company of a financial institution or its subordinate company directly invests in the insurance enterprise.
 
4.     According to Article 5 of the Regulations Governing Required Qualifications for Responsible Persons of Insurance Enterprises, to ensure the principal and concurrent positions are both effectively performed and to avoid any conflict of interest, except in the event that the insurance enterprise has a controlling and subordinate relation with the financial institution as defined in the Company Act, the responsible persons of a financial institution serving concurrently as the directors or supervisors of the insurance enterprise should abide by the following rules:
(1) If the following responsible person of a financial institution serving concurrently as the director or supervisor of an insurance enterprise has signed a statement declaring that there is no violation of Article 5 of the Regulations Governing Required Qualifications for Responsible Persons of Insurance Enterprises, it should be presumed there is no conflict of interest between the concurrent positions:
a. The responsible person of a financial holding company.
b.  The responsible person of a financial institution (excluding insurance enterprises) invested by a financial holding company.
c.  The responsible person of a financial institution (excluding insurance enterprises) invested by an insurance enterprise which is not a subsidiary of a financial holding company.
d.  The responsible person of a foreign insurance enterprise whose controlling company does not have an office in Taiwan.
e.  Manager of a non-business department of a domestic or foreign insurance enterprise whose controlling company does not have an office in Taiwan
(2) If the following responsible person of a financial institution serves concurrently as a director or supervisor of an insurance enterprise, it should be presumed to have a conflict of interest. The insurance enterprise and the financial institution should declare and provide an explanation of such conflict of interest to the FSC. In addition, the responsible person of a financial institution should sign a statement declaring that there is no violation of Article 5 of the Regulations Governing Required Qualifications for Responsible Persons of Insurance Enterprises:
a.  The director or supervisor of a domestic or foreign insurance enterprise whose controlling company has an office in Taiwan.
b.  Manager of the business department of a domestic or foreign insurance enterprise whose controlling company has an office in Taiwan conducting business different from the invested insurance enterprise.
(3) The following responsible person of a financial institution is presumed to have a conflict of interest with the director or supervisor of the insurance enterprise and cannot serve concurrently:
a.  The chairman of the board and the chief of executive officer of a domestic or foreign insurance enterprise whose controlling company has an office in Taiwan, except for serving concurrently in accordance with Subparagraph 4 of Paragraph 3 of Article 4 of the Regulations Governing Required Qualifications for Responsible Persons of Insurance Enterprises.
b.  Manager of the business department of a domestic or foreign insurance enterprise whose controlling company has an office in Taiwan conducting the same business as the invested insurance enterprise. 


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