Taipei, June 10, 2008 (CENS)--Cathay Life Insurance Co., Taiwan`s largest life insurer, said that it will issue NT$2 billion (US$66.22 at US$1:NT$30.2) in new shares at NT$75 (US$2.48) per share this year, enabling the firm to raise NT$15 billion (US$496.68 million) in new capital. The capital-increase project will be the largest of ever launched by Cathay Life in its 46-year history. The Cathay Life`s move to increase capital has jolted domestic life-insurance sector as the company already has the strongest financial structure in the domestic life sector, with an insider expecting such capital raising to put increasing pressure on other life insurers to do the same. Domestic life insurers are pressured to increase capital due impact from the U.S. subprime mortgage crisis, loss from currency exchange, and revision to the risk-based capital (RBC) regulation for the insurance industry.Taking into account suggestions from domestic life insurers, the Cabinet-level Financial Supervisory Commission will review the revision of the RBC regulations as necessary. Cathay Life`s parent Cathay Financial Holding Co. holds NT$20 billion (US$662.25 million) in cash, enough to meet the capital-increase project without resorting to more fund raising. Two other two large-sized life insurers, including Shin Kong Life Insurance Co. and Taiwan Life Insurance Co., have also decided to follow in Cathay`s footsteps. Cathay Life will, after capital increase is complete, see its capitalization rise to NT$52.6 billion (US$1.74 billion) from present NT$50.6 billion (US$1.67 billion).
news source : http://news.cens.com/
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