Taiwan FSC Tightens Risk Controls on Insurers’ Foreign Sovereign Bond Investments, Sets BBB- Floor

Taiwanese insurers have long invested their substantial premium income in overseas bonds, including foreign sovereign debt carrying sovereign credit and default risks. The Financial Supervisory Commission has therefore amended investment rules to establish a minimum credit-rating threshold, steering insurers toward investment-grade bonds and reducing the potential impact of overseas investment losses on solvency and policyholder interests.

The FSC has issued a draft amendment to the Regulations Governing Foreign Investments by Insurance Companies. It stipulates that foreign government bonds purchased by insurers, or the sovereign issuers of those bonds, must carry an investment-grade rating of BBB- or higher. The amendment does not impose a new cap on investment amounts and could take effect as early as the end of August 2026 after the public-notice and legislative procedures are completed.