FSC: Insurance Industry Foreign Bond Investments Limited to Investment Grade (BBB- and Above)
The Financial Supervisory Commission (FSC) announced that insurance companies must limit new foreign government bond investments to investment-grade (BBB- or higher). Existing non-investment-grade holdings (approx. NT$374.4 billion) can be held but no new investments are allowed.
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- 📰 Published: June 2, 2026 at 20:11
- 🔍 Collected: June 2, 2026 at 20:22 (11 min after Published)
- 🤖 AI Analyzed: June 2, 2026 at 20:24 (2 min after Collected)
The Financial Supervisory Commission (FSC) announced today that it will propose amendments requiring insurance companies to limit future investments in foreign government bonds and treasury bills to investment-grade (BBB- or higher). Existing holdings below BBB- grade, totaling approximately NT$374.4 billion, can be held and managed, but no new investments are permitted.
The FSC stated that to assist the insurance industry in smoothly transitioning to the new Taiwan Insurance Solvency (TIS) regime implemented this year, and to maintain investment strategies under controlled risk, it has drafted amendments to the "Regulations Governing Overseas Investments by Insurance Enterprises." The amendments will be announced for a 60-day public comment period and could take effect as early as late August or September.
Tsai Huo-yen, Deputy Director-General of the Insurance Bureau, stated there are three key points. First, new investments in foreign government bonds and treasury bills must be investment-grade (BBB- or higher). Currently, there are no rating requirements for foreign government bonds. After discussions with industry associations, the FSC decided to guide funds toward higher-rated bonds.
FSC statistics show that as of the end of March, insurance companies held NT$2.88 trillion in foreign government bonds and treasury bills, with about 13% (approx. NT$374.4 billion) being below BBB-.
Tsai explained that most existing non-investment-grade holdings were investment-grade at the time of purchase but were later downgraded. Insurers have six months to improve these positions. If they cannot meet the requirements within six months, they must submit an improvement plan, but there is no mandatory deadline for liquidation.
Second, the FSC is relaxing capital requirements for establishing Special Purpose Vehicles (SPVs) overseas to facilitate capital raising. This is expected to help insurers like Mercuries Life Insurance raise funds abroad.
Third, considering the differences in risk measurement between the TIS and previous systems, insurers may maintain current investment items if they provide supporting documents and receive FSC approval, facilitating asset-liability management.
The FSC stated that to assist the insurance industry in smoothly transitioning to the new Taiwan Insurance Solvency (TIS) regime implemented this year, and to maintain investment strategies under controlled risk, it has drafted amendments to the "Regulations Governing Overseas Investments by Insurance Enterprises." The amendments will be announced for a 60-day public comment period and could take effect as early as late August or September.
Tsai Huo-yen, Deputy Director-General of the Insurance Bureau, stated there are three key points. First, new investments in foreign government bonds and treasury bills must be investment-grade (BBB- or higher). Currently, there are no rating requirements for foreign government bonds. After discussions with industry associations, the FSC decided to guide funds toward higher-rated bonds.
FSC statistics show that as of the end of March, insurance companies held NT$2.88 trillion in foreign government bonds and treasury bills, with about 13% (approx. NT$374.4 billion) being below BBB-.
Tsai explained that most existing non-investment-grade holdings were investment-grade at the time of purchase but were later downgraded. Insurers have six months to improve these positions. If they cannot meet the requirements within six months, they must submit an improvement plan, but there is no mandatory deadline for liquidation.
Second, the FSC is relaxing capital requirements for establishing Special Purpose Vehicles (SPVs) overseas to facilitate capital raising. This is expected to help insurers like Mercuries Life Insurance raise funds abroad.
Third, considering the differences in risk measurement between the TIS and previous systems, insurers may maintain current investment items if they provide supporting documents and receive FSC approval, facilitating asset-liability management.
FAQ
What changed in Taiwan's insurance investment rules?
A minimum credit rating of BBB- is now required for new foreign government bond investments.