Stock Code:2851

CENTRAL REINSURANCE CORPORATION

Minutes of the 2015 Annual General Meeting of Shareholders

May 27, 2015

(This translated document is prepared in accordance with the Chinese version and is for reference only. In the event of any inconsistency between the English version and the Chinese version, the Chinese version shall prevail.)

CENTRAL REINSURANCE CORPORATION

Minutes of the 2015 Annual General Meeting of Shareholders

Date & Time:9:00 a.m., May 27, 2015 (Wednesday)

Venue:10F, No.11, Chungshan S.Road, Taipei 10048, Taiwan

Chang Yung-Fa Foundation International Convention Center Room1002

Shareholders present: Shareholders present by themselves (including electronic voting) or by proxy at the meeting represent 483,434,402 shares and account for 85.97% of the total issued shares of the Company which amount to 562,275,000 shares.

Chairman:Mr. Yang, Cheng-Tui

Secretary:Ms. Chen, Yi-Chun

Attendants as guest:Mr. Yau, Sea-Wain, Independent Director / Mr. Tsen, Ron-Syou, Independent Director / Mr. Chou, Yu-Cheng, Independent Director / Ms. Lee, Yi-Fen, Director / Mr. Chen, Kuan-Pao, Director / Mr. Tai, Jiin-Chyuan, Director / Ms. Ku Lai, Mei-Hsueh, Director

A. Report of Shareholders Presented and Call Meeting to Order.

B. Chairman's Address:Omitted.

C. Matters for Report:

I. Business Report of the year 2014. (as the attached Page 5-10)
II. Audit Committee's Review Report of the year 2014. (as the attached Page 18)
III.Reporting on the "Procedures for Use of the Company's funds in Special Projects, Public Utilities and Social Welfare Enterprises" amended by the Board of Directors on Aug. 20, 2014 and submitted to the Financial Supervisory Commission (hereinafter referred to as "FSC") for reference according to the article 6 of "Regulations Governing Use of Insurer's funds in Special Projects, Public Utilities and Social Welfare Enterprises". (as the attached Page 50-54)
IV.Reporting on the "Ethical Corporate Management Best Practice Principles" established by the Board of Directors on Dec. 24, 2014 according to the

article 27 of "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies". (as the attached Page 55-61)

D. Matters for Acknowledgement and Discussion:

Submitted by the Board of Directors

Proposal I: It is proposed to acknowledge the Business Report and Financial Statements of the year 2014. (as the attached Page 5-16)
Explanation: The Financial Statements of the Company of the year 2014 which had been audited and certified by the CPA firm of PricewaterhouseCoopers, Taiwan and the Business Report of the year 2014 were reviewed by the Audit Committee. The Audit Committee also submitted the Review Report as attached.
Resolution: Approved after voting.

Total votes at the time of voting were 483,638,422 votes (including 341,896,920 electronic voting). Approval votes were 474,605,654 votes (including 333,394,811 electronic votes), 98.13% of the total votes; disapproval votes were 6,187 votes (including 6,187 electronic votes); invalid votes were 0 vote; abstention votes/no votes were 9,026,581 votes (including 8,495,922 electronic votes).

Submitted by the Board of Directors

Proposal II: It is proposed to acknowledge the distribution of the earnings of the year 2014 as the Statement of Earnings Appropriation. (as the attached Page 17)

Explanation:

The retained earnings of the Company for the beginning of the year 2014 is NT\$482,822,998. After adding the net income for the year ended 2014 NT\$870,874,268 and deducting actuarial loss on defined benefit plan, setting aside legal reserve and special reserve, the appropriable earnings for the year ended Dec. 31, 2014 is NT\$944,776,796. According to the Company Law and Articles of Incorporation, the proposal of the distribution of the earnings are as follows:

(1) Cash dividends: NT\$674,730,000. Each share shall be

distributed NT\$1.2.

(2) Remuneration to Directors and Supervisors: NT\$ 2,878,000.
(3) Bonuses to employees: NT\$ 7,141,169.

The fractional amount less than NT\$1 will be set aside as Company's non-operating revenue in distribution of cash dividends.

1. In the event that the total amount of shares outstanding of the Company is affected by the buyback of the Company's shares, transfer, conversion, cancellation of treasury shares, necessitating adjustments in the cash distribution ratio, it is proposed that the Chairman of the Board be authorized to manage the change in the cash distribution ratio.
1. The Board of Directors will decide the record date and the payment date for distribution of cash dividends.

Resolution: Approved after voting.

Submitted by the Board of Directors

Proposal III: It is proposed to amend the "Procedures for Transaction of Financial Derivatives" referring to the contrast table attached. (as the attached page 19-35)
Explanation: The amendments are made in accordance with "Regulations Governing Derivatives Transactions Conducted by Insurance Companies" by Order Ref. Jin – Kuan – Bao– Tsai 10302509851 promulgated by FSC on December 24, 2014.

Resolution: Approved after voting.

Total votes at the time of voting were 483,638,422 votes (including 341,896,920 electronic voting). Approval votes were 474,605,552 votes (including 333,394,709 electronic votes), 98.13% of the total votes; disapproval votes were 6,289 votes (including 6,289 electronic votes); invalid votes were 0 vote; abstention votes/no votes were 9,026,581 votes (including 8,495,922 electronic votes).

Submitted by the Board of Directors

Proposal IV: It is proposed to lift the restriction of "non-competition" for Mr. Chang, Kuo-Cheng, the Vice Chairman of the Board.

Explanation:

1. In accordance with the Article 209 of the Company Law, a director who does business that is within the scope of the Company's business for himself/herself or on behalf of another person, shall explain to the shareholders the essential contents of such act and secure the shareholders' approval.
1. It is proposed to approve this proposal because the conduct that Mr. Chang, Kuo-Cheng, the Vice Chairman of the Company, simultaneously acts as the Chairman of Evergreen Insurance Company Limited whose business is within the scope of the Company's business "Reinsurance Business" will not damage to the Company's benefit.

Resolution: Approved after voting.

Total votes at the time of voting were 483,638,422 votes (including 341,896,920 electronic voting). Approval votes were 473,393,673 votes (including 333,382,830 electronic votes), 97.88% of the total votes; disapproval votes were 1,218,168 votes (including 18,168 electronic votes); invalid votes were 0 vote; abstention votes/no votes were 9,026,581 votes (including 8,495,922 electronic votes).

E. Matters for Extraordinary Motion:None.

F. Dismiss the Meeting.

CENTRAL REINSURANCE CORPORATION
BALANCE SHEETS
DECEMBER 31, 2014 AND 2013
(Expressed in thousands of New Taiwan dollars)

		December 31, 2014		December 31, 2013
ASSETS	Notes	AMOUNT	%	AMOUNT	$\frac{1}{2}$
Cash and cash equivalents	6(1)	\$ 18,430,910	54	\$ 17,673,887	54
Accounts receivable	6(2)	399,901	1	183,877
Current income tax assets		133,340	1	111,284
Financial assets at fair value through profit 6(3)
or loss		949,291	3	963,635	3
Available-for-sale financial assets	6(4)	4,852,161	14	4,966,826	15
Bond investments without active market	6(5)	3,125,047	9	3,176,695	10
Other financial assets	6(6)	524,296	2	247,560	1
Investment property	6(7)	459,027	1	459,570	1
Reinsurance contract assets	6(8)	3,859,592	11	3,877,374	12
Property and equipment	6(10)	214,772	ı	203,973	ı
Intangible assets		1,531		2,142
Deferred income tax assets	6(16)	36,423		47,425
Other assets		1,022,876	3	1,022,984	3
TOTAL ASSETS		\$ 34,009,167	100	\$ 32,937,232	100
LIABILITIES AND EQUITY
Accounts payable	6(11)	\$ 577,906	2	\$ 393,767	2
Current income tax liabilities		115,627		25,040
Financial liabilities at fair value through	6(3)
profit or loss		66,470		11,785
Insurance liabilities	6(8)	23,664,460	70	23,382,630	71
Provisions	6(12)	5,778		772
Deferred income tax liabilities	6(16)	77,799		51,447

					73


					П
					1

					3
					4
					2

					27
Other liabilities TOTAL LIABILITIES EQUITY Capital Common stock Capital reserve Retained earnings Legal reserve Special reserve Undistributed earnings Other equity TOTAL EQUITY TOTAL LIABILITIES AND EQUITY	6(13) 6(15) 6(16) 6(4)	\$ 44,211 24, 552, 251 5,622,750 300,000 1,274,236 976,714 1,118,951 164,265 9,456,916 34,009,167	72 17 1 4 3 3 28 100	\$ 38,243 23,903,684 5,622,750 300,000 1,127,818 1,266,462 784,255 67,737) 9,033,548 32,937,232	100

The accompanying notes are an integral part of these financial statements.

$\sim$

CENTRAL REINSURANCE CORPORATION
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31
(Expressed in thousands of New Taiwan dollars, except for earnings per share)

		Year ended December 31			Changes
			2014		2013		Percentage
Items	Notes		AMOUNT	$\overline{\%}$	AMOUNT	$\overline{\mathscr{C}}$	(%)
Operating revenues
Gross premiums written		\$	16,349,868	100 Ŝ	15,649,693	102	4
Less: Reinsurance premiums ceded		t	$1,085,426$ ) (	$7)$ (	908,808)(	6)	19
Net change in unearned premium 6(8)
reserve			242,733	$\boldsymbol{2}$	$144, 518$ ) (	$1)$ (	268)
Retention earned premiums			15,507,175	95	14,596,367	95	6
Reinsurance commission revenue			302,102	2	266,945	2	13
Overriding commission revenue			15,986		16,508	$\overline{\mathbf{C}}$ $\blacksquare$	3)
Net gain from investment
Interest income			315,125	$\overline{2}$	291,332	2	8
Gain or loss on valuation of financial 6(3)
assets or financial liabilities at fair
value through profit or loss		t	$147,280$ ) (	$1)$ (	49,889)(	$\mathbf{I}$	195
Realized gain or loss on
available-for-sale financial assets			83,807	1 ⁶	143,375)(	$1)$ (	158)
Realized gain or loss on bond investments without active market
Foreign exchange gain				$\mathbf{1}$	271,434	2 $\mathbf{f}$	100)
Gain on investment property	6(7)		186,375 17,286		112,911	$\mathbf{1}$	65
Total net gain from investment			455,313	3	18,929	Ç $\blacksquare$ 3	9)
Other operating revenues			2,987		501,342 3,332	$\epsilon$	9)
Total operating revenues			16,283,563	100		-0 $\overline{\phantom{a}}$	10)
Operating costs					15,384,494	100	6
Reinsurance claims paid			10,054,640)(	$62)$ (		61)	7
Less: Reinsurance claims recovery			420,859	3	9,357,147) ( 471,486	3<	11)
Retention reinsurance claims paid			9,633,781) (	59(	8,885,661)(	58)	8
Net changes in other insurance	6(8)
liabilities			489,562)(	$3)$ (	$268,665$ ) (	1)	82
Reinsurance commission expenses			4,781,683)(	30) (	4,908,020)(	$32)$ (	3)
Other operating costs			2,391)	- (	2)		119450
Total operating costs			14,907,417) (	$92)$ (	14,062,348)(	91)	6
Operating expenses
Selling expenses			258,914) (	$\mathbf{D}$ (	$274,036$ ) (	$2)$ (	6)
Administration expenses			114,787)(	$1)$ (	103,093)(	1)	11
Training expenses			1,433)	$\overline{\phantom{a}}$	803)	$\overline{\phantom{a}}$	78
Total operating expenses			375,134) (	$2)$ (	377,932)(	$\overline{3}$ ) (	$_{1}$
Net operating income			1,001,012	6	944,214	6	6
Non-operating income and expenses			$\left \right $		586	X $\sim$	100)
Income from continuing operations
before tax			1,001,011	6	944.800	6	6
Income tax expense	6(16)		130,137) (	1)	$212,710$ ) (	$1)$ $($	39)
Income from continuing operations
after tax			870,874	$\overline{2}$	732,090		19
Net income			870,874	5	732,090	5	19

(Continued)

$\sim$ $\sim$

CENTRAL REINSURANCE CORPORATION
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31
(Expressed in thousands of New Taiwan dollars, except for earnings per share)

				Year ended December 31					Changes
			2014			2013			Percentage
Items	Notes		AMOUNT	%		AMOUNT	%		$(\%)$
Other comprehensive income
Unrealized gain on available-for-sale	6(4)
financial assets		\$	264,419		2 S	598,432		4<	56)
Actuarial loss on defined benefit plan	6(12)		5,757		- (	1,575)			266
Income tax relating to the components	6(4)(16)
of other comprehensive income			31,438)	$\blacksquare$		13,695)			130
Total other comprehensive income for
the year (after tax)			227,224	$\boldsymbol{2}$		583,162		4 ¹	61)
Total comprehensive income for the
year		S.	1,098,098	7	\$	1,315,252		9 ₀	17)
Earnings per share (after tax)
Basic and Diluted		\$		1.55	-\$		1.30

The accompanying notes are an integral part of these financial statements.

$\mathcal{L}^{\pm}$

$\ddot{\phantom{0}}$

							Retained Earnings			Other Equity
	Notes	Common Stock		Additional Paid-in Capital		Legal Reserve	Reserve Special		Undistributed Earnings	Loss on Available-for sale Financial Assets Unrealized Gain or		Total Equity
2013
Distributions of 2012 earnings (Note) Balance at January 1, 2013		\$5,512,500	↮	300,000	⊷	991,944	\$1,235,532	⊷	606,151	ఆ	652,206)	\$7,993,921

Legal reserve						135,874			(35, 874)
Cash dividends	6(15) 6(15)								275,625)			275,625)
Stock dividends		110,250							110,250)
Reversal of special reserve							195,539)		195,539
Net income for 2013									732,090			732,090
Appropriation for equalization reserve for 2013	6(15)						226,469		226,469
Other comprehensive income for 2013	$\frac{5}{4}$								1,307		584,469	583,162
Balance at December 31, 2013		\$5,622.750	∣⊶ب	300,000		\$1,127,818	\$1,266,462	↔	784,255	₩	(57, 737)	\$9,033,548
2014
Balance at January 1, 2014		\$5,622,750	⊷	300,000		\$1,127,818	\$1,266,462	⊷	784,255	ల	67,737)	\$9,033,548
Distributions of 2013 earnings (Note)
Legal reserve						146,418			146,418)
Cash dividends	6(15)								674,730)			674,730)
Reversal of special reserve							519,716)		519,716
Net income for 2014									870, 874			870,874
Appropriation for equalization reserve for 2014	6(15)						229,968		229,968
Other comprehensive income for 2014	6(4)								4.778		232,002	227,224
Balance at December 31, 2014		\$5,622,750	⊷	300,000		\$1,274,236	976,714 اچي		\$1.118.951	₩	164,265	\$9,456,916

The accompanying notes are an integral part of these financial statements.

remuneration of \$3,100 and \$2,300 for 2013 and 2012, respectively, have been deducted from the statement of comprehensive

bonus of \$5,996 and \$5,580, and directors'

Note: Employees'
income.

CENTRAL REINSURANCE CORPORATION
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31
(Expressed in thousands of New Taiwan dollars)

CENTRAL REINSURANCE CORPORATION STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31 (Expressed in thousands of New Taiwan dollars)

	Notes		2014		2013
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax for the year		\$	1,001,011	\$
Adjustments to reconcile net income before income tax to net cash					944,800
provided by operating activities:
Income and expenses having no effect on eash flows
Depreciation					7.036
Amortization	6(17)		8,046 1,350
Net change in reserves			246.829		1,296
Net loss (gain) on financial assets and liabilities at fair value through					413,183
profit or loss			57, 549
Net loss on available-for-sale financial assets			216	t	$118,778$ ) 201,674
Net gain on bond investments without active market			$\blacksquare$	ť	271,434)
Interest income		(	332,334)	$\mathbf{f}$	313,718)
Dividend income		t	105,481)	- 1	74,432)
Net gain on disposal of property and equipment			15)
Unrealized foreign exchange gain		t
Changes in assets/liabilities relating to operating activities			$101,928$ ) (		$119,445$ )
Net changes in assets relating to operating activities
Accounts receivable		(	215,876)		167,829
Financial assets at fair value through profit or loss			13,470
Reinsumnee contract assets			52.783		541,080
Other assets				C	507,813)
Net changes in liabilities relating to operating activities		€	5,650)		72,499
Accounts payable			184.139	t	459, 114)
Provisions		t	751)	t	803)
Other liabilities			5.968		358
Cash generated from operations			809,326		484,218
Interest received
Dividend received			336,729		303,269
Cash paid for income tax			104,792 55,690)		75,754 129,902)
Net cash provided by operating activities			1,195,157		733,339
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through profit or loss		€	$20,506$ )
Proceeds from disposal of financial assets at fair value through profit or loss			18,516		642,027
Acquisition of available-for-sale financial assets		€	11,546,277) (		8,523,215)
Proceeds from disposal of available-for-sale financial assets			11,924,846		9,540,085
Acquisition of bond investments without active market		C	$117,118$ ) (		2,302,298)
Proceeds from disposal of bond investments without active market					500,362
Bond investments without active market yield to date			269,553		585,090
Acquisition of property and equipment	6(10)	t	$16,189$ ) (		1,436)
Proceeds from disposal of property and equipment			15
Acquisition of investment property	6(7)		$2,113$ ) (		1,953)
Increase in other financial assets			276,736) (		247,560)
Acquisition of intangible assets			739)
Net cash provided by investing activities			233,252		191,102
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of eash dividends	6(15)		674.730)		275,625)
Net eash used in financing activities			$674.730$ )		$275.625$ )
Effects of exchange rate changes			3,344		16,889
Increase in eash and cash equivalents			757,023		665,705
Cash and cash equivalents at beginning of year			17.673,887		17,008,182
Cash and cash equivalents at end of year		S	18,430,910	$\overline{\mathcal{L}}$	17,673,887

The accompanying notes are an integral part of these financial statements.

CENTRAL REINSURANCE CORPORATION Earnings Distribution Plan For the Year of 2014

		(Unit: NT\$)
Items	Total	Grand Total
Unappropriated retained earnings of previous years		482,822,998
Add: Net income of 2014	870,874,268
Less: Actuarial loss on defined benefit plan(Note 1)	4,777,897
Less: Legal reserve	174, 174, 854
Less: Special reserve(Note 2)	229,967,719	461,953,798
Retained earnings in 2014 available for distribution		944,776,796
Distributable item -
Shareholders' dividends - Cash dividends: NT\$1.2 per share	674,730,000	674,730,000
Unappropriated retained earnings		270,046,796

Note 1: Pursuant to Article 11 of the Rules for the Preparation of Financial Reports by Insurance Institutions, the Company defined actuarial loss on defined benefit plan transferred to retained earnings.
Note 2: According to the Insurance regulations, the provision for equalization reserve NT\$229,967,719 of the year 2014 had been recognized as special reserve.
Note 3: Distribution Total: NT\$684,749,169 Bonuses to employees: NT\$7,141,169(7,141,169÷684,749,169×100%=1.04%) Remuneration to Directors and Supervisors: NT\$2,878,000(2,878,000÷684,749,169×100%=0.42%) Shareholders' Dividends: NT\$674,730,000(674,730,000÷684,749,169×100%=98.54%)
Note 4: The surplus of year 2014 is allocated by priority.

CENTRAL REINSURANCE CORPORATION

Procedures for Transaction of Financial Derivatives

After amendment	Before amendment	Reason for amendment
any other tools approved by the competent authority. The Company may not engage in derivatives transactions for anticipated investment positions and enhancing the investment efficiency.
Article 4 Authority Limits and Responsible Management Level 1. Derivatives transactions shall be guided in accordance with the Company's table governing the delegation of authority and responsibility The board of directors 2. authorizes the Chairman to determine the total amount of financial derivatives transactions.	Article 7 Authority Limits and Responsible Management Level 1. Each transaction shall be guided in accordance with the Company's table governing the delegation of authority and responsibility The board of directors 2. authorizes the Chairman to determine the total amount of financial derivatives transactions.	Considering the fluency of the Procedures, we change the order of the Articles. Article 7 is moved to Article 4 and the wording is amended.
Article 5 Segregation of Duties Division functions in regard to the financial derivatives transactions made by the Company shall be as follows: 1. Monitoring Division:	Article 4 Segregation of Duties Division functions in regard to the financial derivatives transactions made by the Company shall be as follows: 1. Monitoring Division:	1. To amend the number of Article. 2. To amend the wording in accordance with the Paragraph 2, Article 20 of "Regulations Governing the Acquisition and Disposal of Assets by Public Companies"

After amendment	Before amendment	Reason for amendment
(1)Board of Directors:	(1)Board of Directors:	(hereinafter referred to
Designate senior	Designate senior	as the "Regulation 2").
management	management
personnel to pay	personnel to pay
continuous attention	continuous attention to
to monitoring and	monitoring and
controlling financial	controlling financial
derivatives trading	derivatives trading
risk. Periodically	risk. Periodically
evaluate whether	evaluate whether
derivatives trading	derivatives trading
performance is	performance is
consistent with	consistent with
established	established
operational strategy	operational strategy
and whether the risk	and whether the risk
undertaken is within	undertaken is within
the Company's	the Company's
permitted scope of	permitted scope of
tolerance.	tolerance.
(2)Senior management	(2)Senior management
personnel authorized	personnel authorized
by the board of	by the board of
directors:	directors: Periodically
Periodically evaluate	evaluate the risk
the risk management	management measures
measures currently employed are	currently employed are appropriate and
appropriate and are	are faithfully
faithfully conducted	conducted in
in accordance with	accordance with the
the Procedures. When	Procedures. When
irregular	irregular

After amendment	Before amendment	Reason for amendment
circumstances are	circumstances are
found in the course of	found in the course of
supervising trading	supervising trading
and profit-loss	and profit-loss
circumstances,	circumstances,
appropriate measures	appropriate measures
shall be adopted and	shall be adopted and a
a report immediately	report immediately
made to the board of	made to the board of
directors, where an	directors.
independent director	(3)The Audit Division:
shall be present at the	Periodically audit the
meeting and express	compliance of the
an opinion.	Procedures for
(3)The Audit Division:	Derivatives
Periodically audit the	Transactions as well
compliance of the	as of the relevant laws
Procedures for	and regulations.
Derivatives	2. Operating Divisions
Transactions as well	(1)The Investment
as of the relevant	Department: conduct
laws and regulations.	financial derivatives
2. Operating Divisions	transactions.
(1)The Investment	(2) The Finance
Department: conduct	Department: conduct
financial derivatives	settlement and
transactions.	confirmation of
(2) The Finance	financial derivatives
Department: conduct	transactions, and
settlement and	periodical evaluation
confirmation of	as well as risk
financial derivatives	assessment,
transactions, and	monitoring and

After amendment	Before amendment	Reason for amendment
periodical evaluation as well as risk assessment, monitoring and control. (3) The Accounting Department: conduct accounting and book keeping procedure.	control. (3) The Accounting Department: conduct accounting and book keeping procedure.
Article 6 Gross Contract Amount and The Maximum Loss Limit Where the derivatives are held for hedging purpose, the aggregate nominal value of total and individual contracts thereof shall not exceed the individual and aggregate book value of the hedged items. The maximum evaluation loss limit of derivatives shall not exceed the aggregate nominal value of the individual and total undue hedged items. If the evaluation loss exceeds the preceding limit, the Investment	Article 5 Gross Contract Amount and The Maximum Loss Limit Where the derivatives are held for hedging purpose, the aggregate nominal value of contracts thereof shall not exceed the aggregate book value of the hedged items. The aggregate sum of premium, margin and other similar cost of financial derivatives transactions shall not exceed 10% of each investment. If the financial derivatives transactions are based on hedging purpose, the relevant cost and gain/loss of forward currency	1. To amend the number of Article. 2. To amend the wording of Paragraph 1 in accordance with the Subparagraph 1, Paragraph 1, Article 13 of the Regulation 1: Transaction principles and policies, including the types of derivatives transactions, major counterparties, hedging or investment strategies, overall and individual position limits. To amend the wording 3. "loss limit of overall and individual contracts and over limit procedures" of Paragraph 1 and Paragraph 2 in accordance with the Subparagraph 1,
Department shall submit senior management personnel a report with	transactions, currency swaps, cross currency swaps, interest rate swaps,	Paragraph 1, Article 18 of the Regulation 2. To add relative 4. regulations of structured

After amendment	Before amendment	Reason for amendment
reasonable analysis, suggestion, and improvement measures. Structured products fulfilled with the following conditions are allowed to be invested and the aggregate amount shall not exceed 10% of the	futures, options and other transactions shall not be included in the computation as mentioned in the preceding paragraph.	products of Paragraph 3 moved from "Foreign Investment Operation" in accordance with the Paragraph 1, Article 2 of the Regulation 1.
Company's funds:
1. The final maturity date shall be no longer than 10 years; 2. The principal-guaranteed rate on the maturity date shall be 90% equivalent or above provided that the final
maturity date is no longer than 5 years, or the aforesaid principal-guaranteed rate shall be 100%; The operational risk 3. relating to the underlying derivatives instruments shall be borne by the issuing institutions.
Article 7 Counterparties and Each Transaction Limits	Article 14 Transaction Limits	1. Considering the fluency of the Procedures, we change order of the

After amendment	Before amendment	Reason for amendment
Derivatives transactions	When conducting	Articles. Article 14 is
counterparties shall meet	derivatives transactions,	moved to Article 7 and the wording is
the following	different transaction limits	amended.
requirements:	are designated according to	2. To add domestic and
1. Domestic financial	counterparty's credit	foreign financial
institutions with their	positions as follows:	institutions standards of
risk-based capital	1. The transaction	Paragraph 1 in accordance with
ratio, ratio of	maximum limit is 200	Subparagraph 3,
regulatory capital to	million US dollars for	Article 6 and Paragraph
risk-weighted assets,	the counterparty with	2, Article 11 of the Regulation 1.
regulatory capital	twAAA credit rating
adequacy ratio, or the	suggested by Taiwan	3. To amend the wording of Paragraph 2 in
percentage accounted	Ratings Corp. or a AA	accordance with
for by adjusted net	equivalent or higher	Subparagraph 7,
capital in the total	credit rating suggested	Paragraph 1, Article 13 of the Regulation 1:
amount of customer	by internationally	Counterparty risk,
margins required for	renowned rating	which requires that
the open positions of	agencies.	when conducting
futures traders	2. The transaction	over-the-counter transactions, the insurer
meeting regulatory	maximum limit is 100	shall perform credit risk
criteria.	million US dollars for	assessment on the
2. Foreign financial	the counterparty with	counterparties and
institutions with	twAA- equivalent or	assign to individual counterparties different
BBB+ equivalent or above credit rating	higher credit rating	transaction limits
suggested by foreign	suggested by Taiwan	according to their credit
credit rating agencies	Ratings Corp. or a A	positions, and the transaction limits shall
in the immediately	equivalent or higher	be subject to constant
preceding year.	credit rating suggested	monitoring.
When conducting	by internationally	4. To add Paragraph 3 in
derivatives transactions in	renowned rating	accordance with
the OTC market, different	agencies.	Paragraph 2, Article 11 of the Regulation 1: The
transaction limits are	The transaction 3. maximum limit is 50	issuing or guarantee institutions of the

After amendment	Before amendment	Reason for amendment
designated according to counterparty's credit positions as follows: 1. The transaction maximum limit is 200 million US dollars for	million US dollars for the counterparty with twA- equivalent or higher credit rating suggested by Taiwan Ratings Corp.	structured products.
the counterparty with twAAA credit rating suggested by Taiwan Ratings Corp. or a AA equivalent or higher credit rating suggested by internationally renowned rating
agencies. 2. The transaction maximum limit is 100 million US dollars for the counterparty with twAA- equivalent or higher credit rating suggested by Taiwan Ratings Corp. or a A equivalent or higher credit rating suggested by internationally renowned rating agencies.
The transaction 3. maximum limit is 50 million US dollars for the counterparty with twA+ equivalent or

After amendment	Before amendment	Reason for amendment
higher credit rating
suggested by Taiwan
Ratings Corp or a
BBB+ equivalent or
higher credit rating
suggested by
internationally
renowned rating
agencies.
The Company shall not 4.
deal with the
counterparties with no
credit rating or credit
rating below twA+
suggested by Taiwan
Ratings Corp or below
BBB+ credit rating
suggested by
internationally
renowned rating
agencies.
The issuing or guarantee
institutions of structure
products shall be the
domestic and foreign
financial institutions
meeting the requirements
in this article paragraph 1
and the trading limits for each counterparty shall
follow the regulations in
this article paragraph 2.

Article 9 Performance	Article 6 Performance	To amend the number of

After amendment	Before amendment	Reason for amendment
Evaluation	Evaluation	Article.
(Omitted.)	(Omitted.)
Article 10 Public Disclosure (Omitted.)	Article 9 Public Disclosure (Omitted.)	To amend the number of Article.
Article 11 Accounting system (Omitted.)	Article 10 Accounting system (Omitted.)	To amend the number of Article.
Article 12 Risk Management System The risk identification, assessment, response, monitoring and reporting of financial derivatives transactions shall be done according to the Company's "Operation Guidelines for Investment Risk Management". These risks as below shall be noted: 1. Credit Risk: Credit risk is controlled by restricting the counterparties principally to those who have banking relationship with the	Article 11 Risk Management System The risk identification, assessment, response, monitoring and analysis of financial derivatives transactions shall be done according to the Company's "Operation Guidelines for Investment Risk Management". These risks as below shall be noted: 1. Credit Risk: Credit risk is controlled by restricting the counterparties principally to those who have banking relationship with the Company or are	1. To amend the number of Article. 2. To amend the wording of Paragraph 1 in according with Subparagraph 6, Paragraph 1, Article 13 of the Regulation 1: Risk management system, which shall include the identification, assessment, monitoring and reporting of transaction risks which shall at least include credit, market, liquidity, operational, legal and system risks.
Company or are internationally	internationally renowned and can provide
renowned and can	professional

After amendment	Before amendment	Reason for amendment
provide professional	information.
information.	2. Market Risk: Market
2. Market Risk: Market	risk arising from the
risk arising from the	fluctuations of interest
fluctuations of interest	rates and foreign
rates and foreign	exchange rates or from
exchange rates or from	other factors shall be
other factors shall be	closely monitored and
closely monitored and	controlled.
controlled.	3. Liquidity Risk:
3. Liquidity Risk:	Liquidity risk shall be
Liquidity risk shall be	controlled by restricting
controlled by restricting	counterparties to those
counterparties to those	who have adequate
who have adequate	facility, sufficient
facility, sufficient	information, and sizable
information, and	trading capacity and
sizable trading capacity	capability to enter into
and capability to enter	transactions in any
into transactions in any markets around the	markets around the world. The financial
world. The financial	derivatives transactions
derivatives transactions	shall be restricted to
shall be restricted to	standardized products
standardized products	that are listed in
that are listed in	internationally notable
internationally notable	exchanges or traded over
exchanges or traded	the banks' counter.
over the banks' counter.	4. Operational Risk:
4. Operational Risk:	Authority limits and
Authority limits and	operating procedures
operating procedures	shall be stipulated
shall be stipulated	explicitly to avoid

After amendment	Before amendment	Reason for amendment
explicitly to avoid operational risk. 5. Legal Risk: Any legal documents, except standard contracts of banks, shall first be reviewed by legal personnel or legal counsel and be executed after going through administrative approval procedures. 6. System Risk: The Company shall execute the stop loss mechanism of financial derivatives transactions.	operational risk. 5. Legal Risk: Any legal documents, except standard contracts of banks, shall first be reviewed by legal personnel or legal counsel and be executed after going through administrative approval procedures. 6. System Risk: The Company shall execute the stop loss mechanism of financial derivatives transactions. Cash Flow Risk: The 7. Company shall maintain
Cash Flow Risk: The 7. Company shall maintain adequate level of cash to meet the cash settlement requirement in time.	adequate level of cash to meet the cash settlement requirement in time.
Article 13 Risk Control Measures and Internal Control System Risk control measures and internal control system taken by the Company for financial derivatives transactions shall be as follows:	Article 12 Risk Control Measures Risk control measures taken by the Company for financial derivatives transactions shall be as follows: 1. Personnel engaged in	1. To amend the number of Article. 2. To amend the wording in accordance with Subparagraph 3 and Subparagraph 6, Paragraph 1, Article 13 of the Regulation 1 regarding internal control system and in

After amendment	Before amendment	Reason for amendment
1. Personnel engaged in derivatives trading may not serve concurrently in other operations such as confirmation and settlement.	derivatives trading may not serve concurrently in other operations such as confirmation and settlement. 2. Finance Department	accordance with Paragraph 2, Article 13 of the Regulation 1 regarding reporting items and frequency to the board of directors and the Risk
2. Evaluation method and frequency: Finance Department shall evaluate the financial derivatives positions at least twice per month. The evaluation reports shall be submitted to senior management personnel authorized by the board of directors and the president. The evaluating method shall be in accordance with "Rules for the Preparation of Financial Reports by Insurance Institutions" and the "Generally Accepted Accounting Principles". 3. With regard to risk	shall evaluate the financial derivatives positions at least twice per month. The evaluation reports shall be submitted to senior management personnel authorized by the board of directors and the president. The evaluating method and frequency shall be in accordance with "Rules for the Preparation of Financial Reports by Insurance Institutions" and the "Generally Accepted Accounting Principles". 3. With regard to risk assessment, monitoring and control, Finance	Management Committee. The reason amending Subparagraph 6 is same as Subparagraph 2, Paragraph 1, Article 5 of the Procedures.
identification, assessment, monitoring and control, legality of derivatives transactions, Finance	Department shall periodically submit a performance report to the senior management personnel authorized by

After amendment		Before amendment
Department	shall	the board of directors.
periodically submit	a 4.	Finance Department
performance report	to	shall report to the
the senior management		soonest meeting of the
personnel authorized by		board of directors
the board of directors.		including total and net
4. Finance Department		amount of contracts with
shall report to	the	the obligations which
soonest meeting of the		have not become due,
board of directors		hedging and risk
including total and net		assessment reports on a
amount of contracts		regular basis.
with the obligations	5.	Finance Department
which have not become		shall establish a log
due as well	as	book in which details of
unrealized gain or loss		the types and amounts of
evaluated in accordance		financial derivatives
with the fair value, compliance with	the	trading engaged in,
Procedures, hedging		board of directors'
and risk assessment		approval dates, and the matters required to be
reports; and report to		carefully evaluated and
the Risk Management		retain it at least for 5
Committee at least once		years for reference.
every six months.	6.	When irregular
5. Finance Department		circumstances are found
shall establish a	log	in the course of
book in which details		supervising trading and
of the types	and	profit-loss
amounts of financial		circumstances, the
derivatives trading		senior management
engaged in, board	of	personnel authorized by
directors' approval		the board of directors

After amendment	Before amendment	Reason for amendment
dates, and the matters required to be carefully evaluated and retain it at least for 5 years for reference. When irregular 6. circumstances are found in the course of supervising trading and profit-loss circumstances, the senior management personnel authorized by the board of directors shall adopt appropriate measures and report to the board of directors. Independent directors shall be present at the	shall adopt appropriate measures and report to the board of directors.
meeting and express an opinion.
Article 14 Internal Audit System The Audit Division shall audit whether all derivatives transactions are in compliance with the Procedures at least once every quarter; and shall perform the following duties and prepare a quarterly audit report which shall be passed by	Article 13 Internal Audit System The Audit Division shall audit whether all derivatives transactions are in compliance with the Procedures monthly; and shall perform the following duties and prepare a quarterly audit report which shall be passed by the board of directors and submitted	1. To amend the audit frequency in accordance with the Q&A 32 of Regulation 2. 2. To amend the number of Article.

After amendment	Before amendment	Reason for amendment
the board of directors and	to the competent authority
submitted to the competent	for reference:
authority for reference:	1. To audit the compliance
1. To audit the compliance	of the processing
of the processing	procedure for
procedure for	Derivatives Transactions
Derivatives	as well as the relevant
Transactions as well as	laws and regulations;
the relevant laws and	2. To audit the internal
regulations;	control measures,
2. To audit the internal	including the functions
control measures,	of internal checks and
including the functions	cross reference;
of internal checks and cross reference;	3. To assess the
	independence of the risk
3. To assess the independence of the	management operations and implementation of
risk management	the risk limitation
operations and	measures;
implementation of the	4. To verify the reliability
risk limitation	of the sources of
measures;	transaction documents
4. To verify the reliability	and information; and
of the sources of	5. To audit the hedging
transaction documents	effectiveness of the
and information; and	hedging derivatives
5. To audit the hedging	transactions.
effectiveness of the	The deficiencies mentioned
hedging derivatives	in the audit report shall be
transactions.	continually followed up
The deficiencies	until improved. If any
mentioned in the audit	severe violation is found, a
report shall be continually	written notice shall be

After amendment	Before amendment	Reason for amendment
followed up until	submitted to the Audit
improved. If any severe	Committee as well as the
violation is found, a	senior management
written notice shall be	personnel authorized by the
submitted to the Audit	board of directors.
Committee as well as the
senior management
personnel authorized by
the board of directors.
Article 17 Effectiveness	Article 17 Effectiveness	To amend the wording.
Any amendment of the	Upon a resolution passed
Procedures shall be	by the board of directors,
approved by the Audit	the Procedures shall be
Committee, the Board of	given to each supervisor
Directors, and the	and shall become effective
Shareholders' Meeting	after ratification by the
thereafter.	shareholders' meeting.
	Any amendment of the
	Procedures shall be
	approved by the Audit
	Committee, the Board of
	Directors, and the
	Shareholders' Meeting
	thereafter.

AI assistant

Central Re AGM Information 2015

52207_rns_2015-06-03_c2fc8ae1-168d-448d-9c4a-525b3645a8dc.pdf