Interpretive Order on Regulations for Property Insurers' Provision of Various Reserves for Commercial Earthquake and Typhoon/Flood Insurance Business

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Interpretive Order on the Stipulation of Regulations for Various Reserves to be Set Aside by Property Insurers Operating Commercial Earthquake Insurance and Typhoon and Flood Insurance Business

October 2, 2026

Financial Supervisory Commission Order

Issuance Date: October 2, 2026 (Republic of China Year 115)

Document No.: Jin-Guan-Bao-Cai-Zi No. 11501410122

1. This is handled in accordance with Articles 16 and 18 of the Regulations Governing the Provision of Various Reserves by Insurance Enterprises (hereinafter referred to as the 'Reserve Regulations').
2. Property insurers operating commercial earthquake insurance and typhoon and flood insurance businesses shall set aside special reserves. Except for the following provisions, they shall comply with Articles 15 to 17 of the Reserve Regulations:
   (1) For catastrophic special reserves that have been set aside for more than thirty years, the excess portion may be recovered and treated as income. (2) Risk Fluctuation Special Reserve:
3. When the actual claims for retained business of each type of insurance, after deducting the amount offset by the catastrophic special reserve for that type of insurance, are lower than the expected claims, 75% of the difference shall be set aside as a risk fluctuation special reserve. The expected claims shall be calculated at no less than 60% of the expected loss ratio.
4. When the cumulative total amount of risk fluctuation special reserves for commercial earthquake insurance exceeds eighteen times its retained earned premium for the current year, or when the cumulative total amount of risk fluctuation special reserves for typhoon and flood insurance exceeds eight times its retained earned premium for the current year, the excess portion shall be recovered and treated as income.
5. This Order shall take effect from the date of its issuance.

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Update Date: October 2, 2026

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