Taiwan Weighs Capital Charges on Insurer Sovereign Bond Holdings

Taiwan’s financial regulator is considering requiring life insurers to hold additional capital against certain lower-rated government bond holdings as authorities move to tighten risk controls over the industry’s $700 billion overseas portfolio, according to people familiar with the matter.

The Financial Supervisory Commission is considering risk provisioning for sovereign debt rated below A, the people said, asking not to be identified as the discussions are private. The specific methodology for calculating these risk charges is still under discussion, and the final details of the plan could change, they said.