In line with the implementation of the Limited Partnership Act and Housing Act, the abolishment of the Public Housing Act and the amendments to the Enforcement Rules of the Act for Promotion of Private Participation in Infrastructure Projects and the Regulations Governing Consultations for Venture Capital Enterprises as well as to encourage and speed up financing from insurance enterprises for investment in domestic new ventures and five major innovation industries, the Financial Supervisory Commission amended the Regulations Governing Use of Insurance Enterprise's Funds in Special Projects, Public Utilities and Social Welfare Enterprises (the Act), per the letter Ref. No. Jin-Guan-Bao-Cai-Zi No. 10502503501 dated August 31, 2016. The main points are as follows:
1.Amend the public investment items which may be invested by insurance enterprises (Article 3 amended):
The public investment items stipulated pursuant to the government policies are amended by deleting the public housing construction and excluding cemeteries and columbarium in line with relevant laws and regulations.
2.Insurance enterprises are now permitted to invest in limited partnerships (Article 5 amended):
In line with the implementation of the Limited Partnership Act, considering the nature of limited partnership and reflecting on Article 3 of the Regulations Governing Consultations for Venture Capital Enterprises, in cases where the invested enterprises are the venture capital enterprises referred to in the Regulations Governing consultations for Venture Capital Enterprises or the institutions for preservation or conservation of culture and education stipulated in the Act, such enterprises may be established and registered as limited partnership organizations referred to in the Limited Partnership Act. Further, the insurance enterprises may merely act as limited partners. In addition, an insurance enterprise shall implement relevant operating rules when investing in the invested enterprises and the RBC ratio of such insurance enterprise shall not be lower than 200%.
3.Investment in limited partnerships shall in principal be conducted with a prior approval (Articles 9 and 10 amended):
Since a limited partnership is still in the preparation or initial process of establishment and the investment risk is relatively higher, after-the-fact review is not recommended for investment in limited partnerships. Accordingly, in the event that an insurance enterprise invests in a limited partnership pursuant to relevant regulations, it shall prepare and submit the application documents for special approval to the competent authority in advance and such investment shall be conducted with prior regulatory approval; provided, however, that an insurance enterprise may participate in the rights issue of such limited partnership as approved by the competent authority following the after-the-fact review, within its original total investment.
4.The threshold of after-the-fact review is eased (Article 10 amended):
To encourage and speed up financing from insurance enterprises for investment in domestic new ventures and five major innovation industries through investing in venture capital enterprises, the threshold of after-the-fact review of investments in the same venture capital enterprise by the same insurance enterprise is eased. Before the amendment of the Act, the maximum total investment amount of the same invested enterprise was NTD 100 million and it is raised to NTD 200 million now; in addition, the equity of the insurance enterprise remains at 5% or lower.