According to documents presented by Primus Financial Holdings Ltd, a Hong Kong-based company that won a bid to take over local life insurance company Nan Shan last year, it is not funded by capital from the mainland, "Deputy Minister of Economic Affairs" Hwang Jung-chiou said yesterday.

However, Hwang told the Legislative Yuan Finance Committee, the "Ministry of Economic Affairs" (MOEA) has yet to corroborate the contents of the documents submitted by Primus January 12.

Before the corroboration begins, the MOEA has demanded that Primus should submit several other documents requested by the Financial Supervisory Commission and the Council for Economic Planning and Development, Hwang went on to say.

Hwang said that whether that company is funded with mainland capital - which would disqualify it from taking over Nan Shan - or by overseas capital, will be determined within two weeks.

Any overseas company with 30 percent of its capital coming from the mainland is considered by the government to be a mainland company, according to the MOEA.

Nan Shan is one of the largest life insurers in Taiwan, with total assets exceeding $4.6 billion and 7.9 million in-force policies held by about 4 million people.

As to questions over Primus' agreement with American International Group (AGI) to buy its Taiwan insurance unit - Nan Shan - they will be decided within two months.

Financial Supervisory Commission Chairman Sean Chen reiterated on the same occasion the five criteria the commission has laid down for approving the Primus bid: A promise to protect the benefits of Nan Shan's policy holders and employees; sufficient capital for the takeover deal; expertise in running an insurance business; a promise to run the insurer on a long-term basis; and the financial ability to meet Nan Shan's future needs for capital increases.

China Daily/CNA

(HK Edition 03/12/2010 page8)