Financial Supervisory Commission Order Against SinoPac MetLife for Insufficient Capital Adequacy and Failure to Implement Capital Reinforcement Plan

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SinoPac MetLife Insurance Co., Ltd. was ordered to complete the capital reinforcement plan submitted on August 30, 2024, by the end of 2025, and to submit a new specific and complete capital reinforcement plan within one month that would bring the company's capital adequacy ratio to the statutory standard. Additionally, the company is restricted from making new real estate investments until its capital adequacy ratio reaches the statutory standard and the plan is approved by the Commission. The Chairman, Weng [Name Redacted], is ordered to have his 2025 compensation reduced to 70% of the total compensation paid to him in 2024, for a period of one year.

2025-07-31

Financial Supervisory Commission Order

Addressee: As listed in the original and copies Date of Issue: July 31, 2025 (Republic of China Year 114) Document Number: Jin Guan Bao Shou Zi No. 11404929782 Respondent: SinoPac MetLife Insurance Co., Ltd. Unified Business Number: [Redacted] Address: [Redacted] Representative or Manager Name: Weng [Name Redacted] Address: [Redacted]

Subject: Your company's capital adequacy ratio (hereinafter referred to as "capital adequacy ratio") at the end of 2024 did not reach the capital adequacy level prescribed by the Insurance Act, and you failed to actively implement the submitted capital reinforcement plan (including capital increase, financial, or business improvement plans, hereinafter referred to as "capital reinforcement plan"). This constitutes a violation of relevant provisions of the Insurance Act. Pursuant to Article 143-6, Paragraph 1, Item 1 and Paragraph 2, Item 1 of the Insurance Act, you are ordered to complete the capital reinforcement plan submitted on August 30, 2024, by the end of 2025. You are also ordered to submit a new specific and complete capital increase, financial, or business improvement plan within one month that can bring the company's capital adequacy ratio to the statutory standard. Furthermore, pursuant to Article 143-6, Paragraph 1, Item 3, Paragraph 2, Item 1, and Item 7 of the same article, you are restricted from making new real estate investments (including investment in land use rights, excluding construction in progress) starting from the day following the service of this order, until your company's capital adequacy ratio reaches the statutory standard and the Commission approves the resumption of such investments. Additionally, you are ordered to reduce Chairman Weng [Name Redacted]'s total compensation for 2025 to 70% of the total compensation paid to him in 2024, for a period of one year.

Facts:

1. Your company's capital adequacy ratio at the end of 2024 was 136.30%. This falls within the range of above 50% but below 150%, which constitutes the level of "significantly insufficient capital" as defined in Article 5, Paragraph 1, Item 3 and Paragraph 2 of the "Insurance Industry Capital Adequacy Management Measures." This constitutes a violation of Article 143-4, Paragraph 1 of the Insurance Act and related regulations. Investigation reveals:

(1) Pursuant to the order issued by this Commission on July 11, 2024 (Jin Guan Bao Shou Zi No. 11304925052), your company submitted a capital reinforcement plan on August 30, 2024, aimed at bringing the capital adequacy ratio to comply with legal requirements by the end of 2024. This plan included two cash capital increases totaling 600 million shares, the private placement of 5 billion New Taiwan Dollars (NTD) in liability-type preferred shares, and the issuance of 15 billion NTD in subordinated corporate bonds. It was stated that based on financial forecasts as of July 31, 2024, and assuming all capital increase plans were completed, the capital adequacy ratio was expected to increase by approximately 58.5% to reach 201.9%, thereby meeting the statutory capital adequacy standard. This plan was approved by this Commission via letter dated September 9, 2024 (Jin Guan Bao Shou Zi No. 1130145465).

(2) According to the aforementioned capital reinforcement plan, your company planned to issue a total of 20 billion NTD in subordinated corporate bonds by December 31, 2024, including a backup plan of issuing 5 billion NTD in subordinated corporate bonds in conjunction with the liability-type preferred shares. However, as of the end of 2024, your company had only issued 2.5 billion NTD in subordinated corporate bonds. The remaining 17.5 billion NTD in bond issuance quota had not been applied for or completed with this Commission. Consequently, the company failed to achieve the planned effect of increasing the capital adequacy ratio by approximately 58.5% compared to the financial forecast base of July 31, 2024, and the capital adequacy ratio still did not reach the required capital adequacy level.

2. Furthermore, the duties of the Chairman include supervising and managing the overall operations of the company and ensuring the sound operation of the company. Although your company reported the progress of the capital reinforcement plan to the Board of Directors monthly, and this Commission issued letters on November 7, 2024 (Jin Guan Bao Shou Zi No. 1130148866) and December 2, 2024 (Jin Guan Bao Shou Zi No. 1130150527), and held multiple meetings to urge the company to actively implement the planned progress of the capital reinforcement plan to ensure the capital adequacy ratio at the end of 2024 would reach the required level, your company held the 18th and 19th meetings of the 11th Board of Directors on November 13 and December 19, 2024, respectively. At that time, Chairman Weng [Name Redacted] should have foreseen that the company would fail to complete the bond issuance and capital increase plan for the capital reinforcement plan by the end of 2024. However, there was no evidence that he required the management to develop alternative feasible and effective capital increase or other capital reinforcement plans. This clearly shows that Chairman Weng failed to fulfill his duties as Chairman, which was detrimental to the sound operation of the company and the protection of policyholders' interests.

Reasons and Legal Basis:

1. According to Article 143-4, Paragraph 1 of the Insurance Act and Article 4, Paragraph 1 of the "Insurance Industry Capital Adequacy Management Measures" promulgated under the authorization of Paragraph 4 of the same article, the capital adequacy ratio of an insurance industry shall not be lower than the capital adequacy level. Regarding Fact 1 above, your company's capital adequacy ratio (136.30%) at the end of 2024 did not reach the capital adequacy level prescribed in Article 4, Paragraph 1 and Article 5, Paragraph 1, Item 1 of the "Insurance Industry Capital Adequacy Management Measures," and falls under the "significantly insufficient capital" level defined in Item 3 of the same paragraph. Your company failed to actively implement the capital increase plan for the issuance of subordinated corporate bonds proposed in the capital reinforcement plan, resulting in the failure to increase the capital adequacy ratio and reach the capital adequacy level by the end of 2024 as scheduled. The facts of the violation are clear, and they do not comply with Article 143-4, Paragraph 1 of the Insurance Act and related regulations. Pursuant to Article 143-6, Paragraph 1, Item 1 and Paragraph 2, Item 1 of the Insurance Act, you are ordered to complete the capital reinforcement plan submitted on August 30, 2024, by the end of 2025. You are also ordered to submit a new specific and complete capital increase, financial, or business improvement plan within one month that can bring the company's capital adequacy ratio to the statutory standard. Furthermore, pursuant to Article 143-6, Paragraph 1, Item 3 and Paragraph 2, Item 1 of the same article, you are restricted from making new real estate investments (including investment in land use rights, excluding construction in progress) starting from the day following the service of this order, until the company's capital adequacy ratio reaches the statutory standard and this Commission approves the resumption of such investments.

2. Regarding Fact 2 above, although Chairman Weng supervised the company's promotion of the capital reinforcement plan, in 2024, only two cash capital increases of 600 million shares and the issuance of 2.5 billion NTD in subordinated corporate bonds were completed. The remaining 17.5 billion NTD in bond issuance quota was not applied for or completed with this Commission. Ultimately, the capital reinforcement plan was not effectively implemented, and no timely request was made to the management to develop capital increase or other capital reinforcement plans. The facts of the violation of the Insurance Act are clear. Pursuant to Article 143-6, Paragraph 2, Item 7 of the Insurance Act, you are ordered to reduce Chairman Weng [Name Redacted]'s total compensation for 2025 to 70% of the total compensation paid to him in 2024, for a period of one year, starting from the day following the service of this order.

Important Notice: If the respondent disagrees with this order, an appeal may be filed with the Administrative Yuan via this Commission (18th Floor, No. 7, Section 2, Xianmin Avenue, Banqiao District, New Taipei City) within 30 days from the day following the service of this order, in accordance with Article 58, Paragraph 1 of the Administrative Appeal Act. However, pursuant to Article 93, Paragraph 1 of the Administrative Appeal Act, unless otherwise provided by law, the filing of an appeal does not suspend the execution of this order.

Original: SinoPac MetLife Insurance Co., Ltd. (Representative: Mr. Weng [Name Redacted]) Copy: Inspection Bureau, Insurance Bureau of this Commission Copy: Insurance Bureau (Life Insurance Supervision Group) of this Commission

Number of Views: 20,741 Last Updated: 2025-07-31

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