Core Viewpoint - The release of the draft "Insurance Company Asset-Liability Management Measures" by the National Financial Supervision Administration marks a new phase in the regulation of asset-liability management in the insurance industry, set to take effect on July 1, 2026 [1] Group 1: Regulatory Framework - The Measures establish a comprehensive regulatory framework covering governance structure, quantitative indicators, management processes, and collaborative mechanisms [1] - The aim is to shift the industry's operational logic from scale-oriented growth to long-term stable management, laying a solid foundation for risk management and high-quality development [1] Group 2: Objectives and Issues Addressed - The Measures are designed to implement the spirit of the new "National Ten Articles" for the insurance industry, addressing current issues such as the disconnection between asset and liability management and unclear policies and procedures [1] - They also prepare the industry for a complete transition to new accounting standards by 2026 [1] Group 3: Specific Requirements for Insurance Companies - For life insurance companies, the Measures set regulatory ranges for effective duration gaps and require that the comprehensive investment income coverage ratio and net investment income coverage ratio be no less than 100% [1] - For property insurance companies, the focus is on the coverage ratio of retained funds, income coverage ratio, and liquidity coverage ratio under stress scenarios [1] Group 4: Governance and Management Processes - The Measures detail the management responsibilities of the board of directors, senior management, and functional departments of insurance companies, mandating the establishment of independent asset-liability management departments [1] - A management closed loop is established, encompassing asset-liability analysis, business planning and product development, asset allocation and major investments, stress testing, and back-testing [1]

Core Viewpoint - The article discusses the introduction of the "Insurance Company Asset-Liability Management Measures (Draft for Comments)" by the Financial Regulatory Bureau to enhance asset-liability management capabilities and regulatory oversight in the insurance industry [5][7]. Group 1: Background - Prior to 2018, the asset-liability management system for insurance companies was fragmented and lacked specific "hard constraints" [6]. - In March 2018, the former Insurance Regulatory Commission issued the "Insurance Asset-Liability Management Regulatory Rules," marking the initial establishment of a regulatory framework tailored to the domestic insurance industry [6]. - Recent changes in the external environment and internal conditions of the insurance industry, particularly the implementation of new accounting standards in 2026, necessitate a more robust asset-liability management approach [7]. Group 2: Content - The draft includes five main aspects: defining asset-liability management goals and principles, standardizing governance structures, clarifying policies and procedures, establishing regulatory and monitoring indicators, and enhancing supervision [8]. - Regulatory indicators for property insurance companies include: 1. Coverage ratio of settled funds (minimum standard: 100%) 2. Income coverage ratio (minimum standard: 100%) 3. Liquidity coverage ratio under stress scenarios (minimum standard: 100%) [9]. - For life insurance companies, regulatory indicators include: 1. Effective duration gap (maximum threshold: 5 years) 2. Comprehensive investment income coverage ratio (minimum standard: 100%) 3. Net investment income coverage ratio (minimum standard: 100%) 4. Liquidity coverage ratio under stress scenarios (minimum standard: 100%) [9]. - The draft optimizes the calculation methods for these indicators to reflect macroeconomic changes and encourages long-term operations by extending the evaluation period for cost-income indicators to 3-5 years [9]. Group 3: Impact - The draft aims to address issues such as disconnection in asset-liability management, unclear policies, and insufficient regulatory measures, thereby filling institutional gaps [10]. - By quantifying regulatory indicators and setting stress scenarios, the draft reflects the true economic value and risk levels of insurance companies [10]. - The measures are expected to enhance the resilience of insurance companies in long-term operations, particularly in managing the matching of assets and liabilities amid a declining interest rate environment [10].