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Cathay Financial Holdings acquires two ailing life insurers

Cathay Financial Holdings acquires two ailing life insurers

Taipei, March 23 (CNA) Cathay Financial Holdings (????) agreed Monday to absorb two ailing insurance companies by accepting NT$30.3 billion (US$963.6 million) in compensation payments from the Insurance Stabilization Fund. The fund conducted three rounds of auctioning earlier that day. However, each one failed to elicit a bid that exceeded the reserve price, leading to a round of negotiations among the highest bidders. Cathay Financial's offer to take over both insurance companies in exchange for NT$30.3 billion in compensation was deemed the most favorable and the transaction is expected to be completed at the beginning of August. The fund urged the winning bidder to uphold the interests of the employees of the two insurance companies. The Financial Supervisory Commission (FSC) last year placed Global Life Insurance Co. (????) and Singfor Life Insurance Co. (????) into government receivership following a lengthy period of mismanagement. As of June 30 last year, Global Life's negative net worth had swelled to NT$25.2 billion (US$801.4 million), while the figure was tallied at NT$23.9 billion for Singfor Life. Cathay Financial President Lee Chang-ken (???) said that Taiwan's insurance sector will benefit from the auction's outcome, as the company does not need to raise new capital to acquire the two companies. Meanwhile, a number of social movement groups staged demonstrations accusing the government of reimbursing the mismanagement with taxpayer dollars. (By Wu Ching-chun and Ted Chen)


Updated : 2021-06-25 20:57 GMT+08:00