The Taiwan Financial Services Commission (FSC) will soon announce a draft amendment to Article 5 of its regulations on examination charges and annual supervisory fees to update the definition of insurers’ “substantive operating revenue”, which is used to calculate supervisory fees. The change is intended to align the fee base with the accounting presentation and disclosures expected under International Financial Reporting Standard 17 (IFRS 17) Insurance Contracts, which the FSC plans to implement in 2026, and would apply starting with the calculation of supervisory fees for 2027. Under the proposed definition, substantive operating revenue would add insurance revenue, income or expenses from reinsurance contracts held, asset management service revenue and other operating revenue. Net investment income would also be included, with specified adjustments to gains and losses on fair value through profit or loss instruments (including amounts recognised from undistributed earnings on disposal of equity instruments at fair value through other comprehensive income) and to foreign exchange gains and losses (including net changes in the foreign exchange valuation reserve), while excluding portions related to separate accounts and net changes in financial liabilities measured at amortised cost of investment contracts. Deductions would include insurance service expenses, insurance finance expenses (excluding separate accounts), finance expenses from reinsurance contracts held, net changes in special reserves for compulsory automobile liability insurance, and a reserve for bonus adjustments linked to offsets between mortality gains or losses and interest rate difference gains or losses. The FSC notes the amendment follows consultations with the insurance industry. The draft amendment and explanatory notes will be published in the Executive Yuan Gazette and supporting documents will be posted on the FSC’s Regulation Draft Announcement Forum, with public comments invited within 60 days from the day after the announcement.
Taiwan Financial Services Commission 2025-07-15
Taiwan Financial Services Commission to revise insurers’ supervisory fee base to align substantive operating revenue with IFRS 17 from 2027
The Taiwan Financial Services Commission plans to amend Article 5 to redefine insurers’ “substantive operating revenue” for supervisory fee calculations, aligning with IFRS 17 to be implemented in 2026. The new definition will include various revenue streams and specific adjustments, excluding certain liabilities and expenses. The amendment follows industry consultations and will be open for public comment.