Cathay Life Buys Troubled Insurers

Cathay Life Insurance won the reverse  auction to acquire troubled firms Global Life Insurance Co. and Singfor Life Insurance Co., with a bid of NT$30.3 billion (about US$1 billion) – meaning that is the amount it will receive from the government to take over the two companies.

Both of the acquired firms were taken into receivership last year by the government’s Taiwan Insurance Guaranty Fund, due to their mismanagement and insolvency. Global Life had accumulated NT$25.2 billion in losses and Singfor NT$23.9 billion. Financial Supervisory Commission Chairman William Ming-chung Tseng called the bid a “milestone in the insurance industry” and thanked Cathay Life for helping reduce the government’s expense. The government had been expected to incur some NT$60 billion in costs to bail out the troubled firms, but the strong bid by Cathay is expected to reduce the amount to NT$22.3 billion.

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