1. Article 146-5, Paragraph 1 of the Insurance Law provides: “Application shall be made to the competent authority for approval of allocations of insurance enterprise funds to special projects and investments in public utilities and social welfare enterprises. ” Pursuant to the authorization in this paragraph, the Financial Supervisory Commission (hereinafter, the “FSC”) formulated the Regulations Governing Use of Insurer’s Funds in Special Projects, Public Utilities and Social Welfare Enterprises (hereinafter, the “Regulations”).
2. In addition, Article 5, Paragraph 2, Subparagraph 3 of the Regulations provides that the investees for special projects and public utility investments using insurance enterprise funds may be limited partnerships established and registered in accordance with the Limited Partnership Law and shall not be subject to the restrictions on companies limited by shares under the Company Act.
3. On September 3, 2018, the FSC issued the Jin-Guan-Bao-Cai-10701944711 Directive (hereinafter, the “Directive”) to provide a concrete interpretation of the “other investees that meet the requirements of the competent authority.” According to the Directive, where insurance enterprise funds invest in a domestic private equity fund set up under the FSC’s Jin-Guan-Zheng-Chuan-1070320901 Directive of June 1, 2018 and invested by a securities firm whose subsidiary serves as a general partner of the fund, if any of the following matters is invested, this will fall within the scope of the “other investees that meet the requirements of the competent authority” under Article 5, Paragraph 2, Subparagraph 3 of the Regulations:
(1) Public investment items enumerated under Article 3 of the Regulations (see details below).
(2) Matters enumerated under the subparagraphs of Point 1 of the FSC’s Jin-Guan-Bao-Cai-10610908021 Directive of March 21, 2017 (see details below).
4. Enterprises covered by the public investments under Article 3 of the Regulations are listed below:
(1) Transportation facilities such as highways, railways, harbors, parking lots and airports.
(2) Facilities of public utility enterprises such as water, electricity and telecommunications enterprises.
(3) The construction of social housing and senior housing units.
(4) Environmental protection facilities for the treatment of rivers and sewers and the disposal of garbage and wastes as well as funeral facilities. However, the funeral facilities set forth above do not include public cemeteries and storage facilities for ashes (remains).
(5) Public welfare facilities such as facilities for the leisure of the citizens.
(6) Other public enterprises that accommodate government incentives and construction.
5. Matters enumerated under the subparagraphs of Point 1 of the FSC’s Jin-Guan-Bao-Cai-10610908021 Directive of March 21, 2017 are listed below:
(1) Green energy technologies: the photovoltaic industry, the LED lighting industry, the “hot-wheel” energy industry (hydrogen energy and fuel cells, energy information and communications technologies, biomass fuels, wind power and electrical vehicles).
(2) Asia Silicon Valley: the “promotion of innovations, research and development of the Internet of Things industry” and the “enhancement to the innovation and entrepreneurship ecosystem” as the two main thrusts. To wit, the IoT industry is targeted with the inclusion of fields such as sensing objects, network delivery, data collection and application services.
(3) Biomedicine: including the biomedicine industry and the health and welfare industry. The biomedicine industry covers three major fields, namely, the biotech, pharmaceutical and medical devices industries, while the health and welfare industry includes two major domains such as health promotion and heath preservation.
(4) National defense industries: industries whose goods or services can meet national defense needs, primarily the aerospace, shipbuilding and cybersecurity industries.
(5) Smart machinery: integration of smart technology elements (such as robots, the IoT, Big Data, online-to-offline (O2O), lean management, 3D printing, sensors, etc.) so that smart functionalities such as predictive troubleshooting, accuracy compensation, automatic parameter setting or automatic scheduling can be achieved.
(6) New agriculture: the agriculture, forestry, fishing and stock-raising industries as well as their processing and manufacturing, service, machinery and equipment manufacturing, machinery and equipment leasing and wholesaling industries.
(7) Circular economy: industries that engage in the integration and supply of energy resources and the circulation and reuse of wastes, including circular and usage behavior such as the recycling and reuse of wastes to produce recycled products, replacement of process raw materials, and reverse recycling and production of materials by raw material suppliers.