Compulsory adoption of IFRS standards became applicable to all Taiwanese insurers in 2013. In 2018, adoption of IFRS 9 became compulsory, thus ushering in the measurement of assets at fair value. The IFRS 17 standard is scheduled for adoption in 2026, which will mean the measurement of insurance contract liabilities at fair value. These changes can resolve the current problem of asset-liability mismatches, and will ensure that financial report presentations more accurately reflect the actual state of an insurer‘s business operations.

Also, in order to push for the New Generation Insurance Solvency Regime to align more closely with the Insurance Capital Standard (ICS) issued by the International Association of Insurance Supervisors (IAIS), the FSC on 7 July 2020 held a meeting on the new regime and invited top insurance company executives and representatives of various insurance industry organizations to discuss the direction of policy, and everyone in attendance expressed support for the FSC‘s policy on the New Generation Insurance Solvency Regime. In addition to actively lobbying the IAIS to account for Taiwan‘s local conditions in its drafting of the ICS, the FSC has also used field testing to evaluate the localization of supervisory rules and the transition program. The current five-year implementation program calls for a step-by-step introduction of the new regime in order to establish a solvency regime that properly measures the overall risks of Taiwan‘s insurers.

In 2026, Taiwan will simultaneously adopt IFRS 17 and begin implementing the New Generation Insurance Solvency Regime. At that time, all insurers will be required to measure assets and liabilities at fair value. The FSC will observe how insurers respond to the two new systems, and will continue to instruct the Taiwan Insurance Institute in its work to implement the systems and spur insurers to actively engage in preparatory work. As circumstances require, the FSC will take necessary related steps and response measures.

The FSC will continue to conduct outreach activities to help insurers proceed smoothly with preparations to align with international systems. The objectives are to: help implement comprehensive management of assets and liabilities; reasonably reflect overall risks faced by insurers; safeguard policyholder interests; maintain financial stability; and make Taiwan‘s insurers more internationally competitive.