Far Glory Life Insurance Co., Ltd. filed a merger report regarding its intention to assume all life insurance policies and the relevant assets and liabilities from Swiss Zurich Life Insurance Taiwan Ltd

Case:

Key Words:

life insurance, the first year premium market, international financial insurance group

Reference:

Fair Trade Commission Decision of August 26, 2004 (the 668th Commissioners’ Meeting)

Industry:

Personal Insurance (6410)

Relevant Laws:

Article 6 and 12 of the Fair Trade Law

Summary:

Far Glory Life Insurance Co., Ltd. (hereinafter called “Far Glory”) planned to assume from Swiss Zurich Life Insurance Taiwan Ltd. (hereinafter called “Zurich Life Insurance”) its entire life insurance policies and the relevant assets and liabilities, which categorizes as the merger type as prescribed in Article 6 (1) (iii) of the Fair Trade Law (FTL), “where an enterprise is assigned by or leases from another enterprise the whole or the major part of the business or properties of such other enterprise.” Moreover, the sales amount of Far Glory in the last fiscal year was over New Taiwan Dollars (NT$) 20,000,000,000 and that of Zurich Life Insurance was over NT$1,000,000,000. Therefore, pursuant to Article 11 of the FTL, Far Glory filed a report of merger to Fair Trade Commission (FTC).
Based on the statistical data of 2003 provided by the Life Insurance Association-ROC, the market share of Far Glory was 4.5% of the new contract market (also known as the first year premium market) and 1.91% of the premium income market; the market share of Zurich Life Insurance was 2.77% of the new contract market and 1.14% of the premium income market. Both of the enterprises in this case of merger have limited market scale. The total market share of both companies is 7.27% of the new contract market and 3.05% of the premium income market, which has a considerable difference from the largest enterprise on the market (17.8% of the new contract market and 24.2 of the premium income market). Additionally, no barriers are difficult to be overcome for other enterprises to enter the insurance market. Therefore, the merger of the said two enterprises will not restrain the competition of the relevant financial insurance markets and will have no negative influence on the market's competitiveness and the service convenience.
Furthermore, through the merger of this case, Far Glory will have access to the relevant experiences and technology from an international financial insurance group and enhance the flexibility and specialization of its business operation. Through the mutual support of technology and effective utilization of the resources, Far Glory may provide its original insurance customers with multiple life insurance products and provide better professional life insurance services to the customers in Taiwan. The competent authority, the Financial Supervisory Commission, has granted its approval to this case after thoroughly reviewing the protection of the rights and interests of the insured parties and employees of Zurich Life Insurance. Generally speaking, the merger will help promote the economic benefits of the enterprises of this case.
In summary, this merger case has limited impact on the domestic life insurance market. Moreover, after Far Glory assumes the business from Zurich Life Insurance, the operational cost may be decreased and the economy of scale will be produced; and Far Glory can provide the domestic customers with various life insurance products and more professional life insurance services. The overall economic benefit of this case shall outweigh the disadvantages resulting from competition restraint. Pursuant to Article 12 (1) of the FTL, the merger shall not be prohibited.

Appendix:
Far Glory Life Insurance Co., Ltd.’s Uniform Invoice Number: 84703052
Valumart Co., Ltd.’s Uniform Invoice Number: 89927708

Summarized by Hung, Hsuan; Supervised by Cheng, Chia-Lin

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