Central Re

Stock Code: 2851

CENTRAL REINSURANCE CORPORATION

2019 Annual General Shareholders' Meeting

Meeting Handbook

May 29, 2019

THIS IS A TRANSLATION OF THE HANDBOOK FOR THE 2019 ANNUAL SHAREHOLDERS' MEETING (THE "HANDBOOK") OF CENTRAL REINSURANCE CORPORATION (THE "COMPANY"). THIS TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOTHING ELSE, THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE HANDBOOK SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN.

AGENDA FOR THE MEETING

I.	Report the total number of shares represented at this AGM
	and announce commencement of the meeting
	II. Chairman's Address
	III. Report Items
	IV. Ratification and Discussion Items
	V. Extraordinary Motions
	VI. Meeting Adjournment

APPENDICES

• Articles of Incorporation
• Rules for Procedure of the Shareholders' Meeting
• Procedures for Acquiring and Disposing of Assets
• Shareholdings of Directors

CENTRAL REINSURANCE CORPORATION

2019 Annual General Shareholders' Meeting

Meeting Time: May 29 (Wednesday), 2019 9:00 am

Meeting Location: International Convention Center Room 802 Chang Yung-Fa Foundation 8F, No.11, Chungshan S.Road, Taipei, Taiwan

Attendance: There are 590,388,750 shares issued by the Company, the number of shareholder representatives attending make up ___________________ shares, reaching % of the total issued shares.

Chairman: Yang, Cheng-Tui, the Chairman of the Board

L. Report the total number of shares represented at this AGM and announce commencement of the meeting.

II. Chairman's Address.

III. Report Items:

A. Business Report of the year 2018. (Handbook pages 4-9)
B. Audit Committee's Review Report of the year 2018. (Handbook page 22)
C. 2018 Employees' Compensation and Remuneration of Directors Report: The Board of Directors appropriated NT\$10,436,116 as employees' compensation in cash and NT\$3,900,000 as remuneration of directors pursuant to the Articles of Incorporation.

IV. Ratification and Discussion Items:

Proposed by the Board of Directors

Proposal 1: Ratification of the 2018 Business Report and Audited Financial Report. (Handbook pages 4-20) Please ratify.

Description: The 2018 Financial Report of the Company have been audited by Ms. Chen Hsien-I and Mr. Lai Chung-Hsi, the CPA of

PricewaterhouseCoopers.

Resolution:

Proposed by the Board of Directors

Ratification of 2018 earnings distribution. (Handbook page Proposal 2: 21) Please ratify.

Description:

1. The Company is planning to distribute cash dividend NT\$0.9 per share. The total of cash dividends shall be NT\$531,349,875. The cash dividend distribution will be calculated to the nearest NT dollar, the remainder will be recognized as "Other Non-Operating Income" of the Company.
1. If the number of total shares outstanding, prior to the ex-dividend date for the distribution, has changed due to the repurchasing of shares by the Company, the transfer, conversion, cancellation of treasury shares, such that the ratio of the cash dividends is affected, the Chairman of the Board of Directors is authorized to deal relative matters.
1. Subject to the approval of the annual general shareholders' meeting, the ex-dividend date and payment date for the cash dividend distributions would be decided by the Chairman of the Board.

Resolution:

Proposed by the Board of Directors

Proposal to amend the Company's "Procedures for Proposal 3: Acquiring and Disposing of Assets". Amendments shown in a comparison table on the Handbook (page 23-51). Please discuss.
Description: The amendments are made in accordance with the "Regulations" Governing the Acquisition and Disposal of Assets by Public

Companies" promulgated on November 26, 2018 per Order No. Financial-Supervisory-Securities-Corporate-1070341072 of the Financial Supervisory Commission.

Resolution:

V. Extraordinary Motions.

VI. Meeting Adjournment.

$\ddot{\phantom{0}}$

CENTRAL REINSURANCE CORPORATION Business Report of the year 2018

Central Reinsurance Corporation is the sole domestic professional reinsurance company in Taiwan, mainly engaged in non-life and life reinsurance business for domestic and overseas insurance firms. Adhering to its business philosophy of ethical management, stability and integrity, the Company is devoted to maintaining the good order of the insurance market, diversifying risk for its customers, facilitating the development of insurance industry and fulfilling its corporate responsibilities. To ensure sustainable development, the Company operates its business based on the principles of sound corporate governance, customer-focused services, effective fund utilization, as well as a business profile that focuses on both sound risk management and stable profitability. In order to enlarge its operational foundation and diversify the risk of geographical concentration, the Company not only diligently grows its domestic market, but also continuously expands its international territory through prudent strategies.

With the collective efforts of all its employees, the Company reports a net income of NT\$1,050,071 thousand for the year of 2018. Appended below is the Company's business report for 2018:

$\mathbf{1}$ Implementation of the Business Plan
1.1 Business Performance:

The gross premium written for the year is NT\$15,391,462 thousand, being NT\$583,038 thousand or approximately 3.94% over the budgeted NT\$14,808,424 thousand. An analysis is provided below based on business type:

1.1.1 Non-life Reinsurance: The gross premium written is NT\$12,119,062 thousand, being NT\$1,101,451 thousand or approximately 10.00% over the budgeted NT\$11,017,611 thousand. The difference was mainly because of the increased premium income in fire insurance and automobile insurance.
1.1.2 Life Reinsurance: The gross premium written is NT\$3,272,400 thousand, being NT\$518,413 thousand or approximately 13.68% less than the budgeted NT\$3,790,813 thousand. The difference was mainly because of the decreased premium income from personal accident and health insurance.

1.2 Financial Management:

1.2.1 Capital Management:

As at the end of 2018, the total paid-in capital of the Company is NT\$5,903,888 thousand. Total shareholders' equity before distribution is NT\$11,198,236 thousand. The capital structure of the Company remains strong.

1.2.2 Reserve Adequacy:

In order to build up a solid financial basis and strengthen its solvency, the Company provides adequate reserves. At the end of 2018, the sum of various reserves is NT\$24,140,367 thousand.

1.2.3 Fund Investment:

The investment income is NT\$395,799 thousand, being NT\$31,951 thousand or 7.47% less than the budgeted NT\$427,750 thousand.

1.3 Credit Ratings:

In 2019, S&P Global Ratings affirmed its credit rating of "A" with stable outlook based on the Company's strong direct relationships with local clients and solid domestic market position, extremely strong capital adequacy, and diversified and prudent investment profile. Taiwan Ratings Corp. also confirmed the Company's rating of "twAA+".

Meanwhile, A.M. Best affirmed the Company's "A" rating with stable outlook in July, 2018 in recognition of its management performance. Good credit ratings are helpful for developing reinsuring high-quality business. They also prove the Company's strong solvency to fulfill its commitment to customers.

Rating Agency	Rating	Outlook
A.M. Best		Stable
S&P Global Ratings		Stable
Taiwan Ratings	$twAA+$	Stable

The latest ratings are shown as follows.

$\overline{2}$ Budget Implementation and Financial Status

The comparison between the actual and budgeted of the year was shown as follows:

NT& thousands

			11-0 0000000000
Year 2018	Actual	Budget	Achievement (%)
Operating Revenues	14,871,535	14,537,680	102.30%
Operating Costs	13, 123, 799	13,175,796	99.61%
Gross Operating Income	1,747,736	1,361,884	128.33%
Operating Expenses	370,681	339,512	109.18%
Net Operating Income	1,377,055	1,022,372	134.69%
Non-Operating Income and Expenses	42	0	100.00%
Income Before Tax	1,377,097	1,022,372	134.70%
Income Tax Expense	327,026	169,928	192.45%
Net Income	1,050,071	852,444	123.18%

$\mathfrak{Z}$ Profitability Analysis

The table below shows an analysis on the profitability ratios of 2018 as compared to those of 2017. The earnings per share (after tax) for 2018 is NT\$1.78, being NT\$0.57 less than the NT\$2.35 (*note) of 2017:

	Year Ratio	2018	2017	Average
	Return on Assets (%)	2.85	3.96	3.41
	Return on Equity (%)	9.35	13.39	11.37
	Net Operating Income / Paid-In Capital (%)	23.32	30.11	26.72
Profitability	Income from Continuing Operations Before Tax/Paid-In Capital (%)	23.33	30.13	26.73
	Net Profit Margin (%)	7.06	9.52	8.29
	Earnings Per Share (After Tax)(NT\$)	1.78	2.35	2.07

*Note: The earnings per share for 2017 has been retroactively adjusted after capital increase.

Research & Development 4

4.1 Research & Development/Customer Service
4.1.1 To strengthen its internal control and increase the efficiency at work, Company has been continuously developing integrated the information management system. An off-site back-up system has also been established to ensure the smooth operation of the system. In future, the Company will continue making system adjustments and

upgrades to support the development plan of the Company and accommodate to statutory requirements. The implementation of data warehouse enables multi-faceted information analysis to assist with the strategic and business decision-making by the management team.

4.1.2 The Company endeavors to absorb and adopt the most advanced concepts and technologies from the global market to achieve integrated risk management on a continuous basis. Based on its successful experience in risk management, the Company also provides relevant consulting services to customers and assists the competent authority in facilitating risk management policies and regulations for the industry. It is hoped that the collective efforts would help improving the technology standards in risk management for the whole industry.
4.1.3 By means of market analysis and consumer demand observation, the Company provides tailored services to achieve higher quality standard and build up marketing competitiveness. Various supporting programs are offered to customers on a timely basis, including new product design, underwriting and claim management expertise, regulatory and actuarial consulting services, etc. The purpose is to solidify customer relationship and create superior business opportunities on an ongoing basis.
4.1.4 In order to render value-added services to customers and improve its professional image, the Company has organized many professional seminars in 2018, including:

Seminars or programs for our non-life insurance clients:

(1) Executive Summit of Non-life Insurance Companies
(2) Future Talent Reinsurance Principles and Practices
(3) Seminar for Reinsurance Managers in Non-Life Industry-Introduction of the Current Status of the Non-Life Insurance Market in China and a Brief Overview on International Sanction

Seminars or programs for our life insurance clients:

(1) Life Reinsurance Principles and Practice
(2) Medical Insurance Seminar: Specific Critical Illnesses of the Nervous System
(3) Highlights of Health Insurance Products in Recent Years; A Brief Introduction to the Definitions of 22 Specific Critical Illnesses
(4) A Series of Seminar for Underwriting and Claims of Life Insurance Companies: Eye Diseases, Underwriting Assessment of Abnormal ECG and Relevant Heart Diseases. Tumor Underwriting, Common Diseases of Newborn Babies, Sleeping Disorders, The Theory and Practice of Simplified Underwriting, A Brief Introduction to the Definitions of 22 Specific Critical Illnesses

The Company has organized various professional seminars to satisfy our clients' needs for years. Participants were given the opportunities to discuss on the market status and future trends, share information and improve their professional expertise. The course and seminars also contributed to the tightening of client relationship for the Company.

4.2 Talent Development
4.2.1 The Company administers the following on-job training through its training system:
- (1) Regular Training: Internally, the Company provides regular training on general knowledge and basic skills, including "Orientation for New Employees", "Compliance Training and Promotion", "Internal Audit and Internal Control Self-inspection Training", "Anti-Money Laundering and Countering the Financing of Terrorism Training", "Personal Information Protection Awareness Training", "Information Safety Awareness", "Employee Confidentiality Obligations and Ethical Corporate Management Training", "Risk Management Training" (including senior executives) and "Fire Safety Training". A total of 1,352 persons have attended the training in 2018.
- (2) Professional Training and Statutory Programs: To enhance the employees' professional knowledge and expertise and elevate their work efficiency, the Company also organizes various job-related

courses to accommodate the needs of staff at different business operations and job levels. The Company, in the meantime, has assigned its internal auditors, compliance personnel, anti-money laundering and countering the financing of terrorism personnel, accountants and labor safety personnel to attend relevant external training to meet the statutory requirements. A total of 379 employees have attended the external training in 2018.

4.2.2 To support its operating plan and develop reinsurance professionals, the Company also sent employees overseas to attend international conventions, observe best practices and participate in training courses: total 11 persons.
4.2.3 On an ongoing basis, the Company encourages its employees to obtain professional licenses for their jobs. So far, a total of 67 employees have acquired domestic or international licenses on non-life/life insurance and financial management.
(1) Non-life Insurance Underwriters: 22
(2) Non-life Insurance Claim Adjusters: 8
(3) Life Insurance Underwriters: 5
(4) Life Insurance Claim Adjusters: 3
(5) Fellow of the Actuarial Institute of the R. O. C.: 2
(6) International Certificates: CPCU 5 persons, ACII 2 persons, SOA ASA 2 persons, CAS ACAS 1 person, ALU 1 person, FLMI 5 persons, ALMI 1 person, LOMA ACS 3 persons, LOMA AAPA 1 person, LOMA ARA 2 persons, FRM 2 persons, ARM 1 person, CFA 1 person.
4.2.4 To optimize its human resources, the Company endeavors to place employees at the most suitable positions in terms of personal interest and strengths, in the meantime fulfill the Company's human resources strategies. During the year, therefore, the Company has recruited 14 new employees, arranged job transfer for 12 employees and promoted 14 employees.

CENTRAL REINSURANCE CORPORATION
BALANCE SHEETS
(Expressed in thousands of New Taiwan dollars)

			December 31, 2018			December 31, 2017
	ASSETS	Notes	AMOUNT	$\overline{\frac{9}{6}}$		AMOUNT	$\overline{\frac{9}{6}}$
11000	Cash and cash equivalents	6(1)	\$ 17,745,305	48	\$	16,772,180	46
12000	Accounts receivable	6(2)	280,768	I		281,681	1
14110	Financial assets at fair value	$6(3)$ and $12(7)$
	through profit or loss		1,708,183	5		872,011	2
14120	Available-for-sale financial assets	12(7)		$\bullet$		5,419,337	15
14145	Financial assets at amortized cost 6(4)		11,012,551	29
14160	Investments in debt instrument	12(7)
	without active market					4,532,786	12
14170	Held-to-maturity financial assets	12(7)				2,456,248	7
14180	Other financial assets	6(5)	237,199	1		684,362	2
14200	Investment property, net	6(7)	450,678	1		452,411	1
15000	Reinsurance contract assets	6(8)	4,216,071	11		3,726,066	10
16000	Property and equipment, net	6(11)	204,778			206,745	1
17000	Intangible assets		5,186			922
17800	Deferred income tax assets	6(17)	27,917			70,832
18000	Other assets		1,401,514	4		1,034,840	3
	TOTAL ASSETS		\$ 37,290,150	100	\$	36,510,421	100
	LIABILITIES AND EQUITY
21000	Accounts payable	6(12)	\$ 309,813	1	\$	409,870	1
21700	Current income tax liabilities		102,276			217,574	1
23200	Financial liabilities at fair value	$6(3)$ and $12(7)$
	through profit or loss		3,655			13,290
24000	Insurance liabilities	6(8)	25, 565, 926	69		24,430,514	67
27000	Provisions		18,789			21,013
28000	Deferred income tax liabilities	6(17)	44,639			130,378
25000	Other liabilities		46,816			36,310
	TOTAL LIABILITIES		26,091,914	70		25, 258, 949	69
30000	EQUITY
31000	Capital
31100	Common stock	6(14)	5,903,888	16		5,622,750	15
32000	Capital reserve		300,000	1		300,000	ł
33000	Retained earnings
33100	Legal reserve		2,032,633	5		1,754,742	5
33200	Special reserve	6(16)	2,002,340	5		1,827,712
33300	Undistributed earnings		1,046,216	3		1,360,777	4
34000	Other equity interest		86,841)			385,491	1
	TOTAL EQUITY		11,198,236	30		11, 251, 472	31
	TOTAL LIABILITIES AND
	EQUITY		\$ 37,290,150	100	$\overline{\mathbf{r}}$	36,510,421	100

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

CENTRAL REINSURANCE CORPORATION
STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

					Years ended December 31			Changes
				2018		2017		Percentage
41000	Items	Notes		AMOUNT	$\overline{\gamma_0}$	AMOUNT	$\frac{9}{6}$	(%)
41100	Operating revenues Gross premiums written		\$	15,391,462	103	\$ 14,564,046	99	6
51100	Less: Reinsurance premiums
	ceded			$1,053,030$ (	$7)$ (	$907,604)$ (	6)	16
51310	Net change in unearned	6(8)
41130	premium reserve Retention carned premiums			$363,322)$ ( 13,975,110	2) 94	$180, 169$ ) ( 13,476,273	$\left \right $ 92	102
41300	Reinsurance commission revenue			277,753	2	263,609	2	4 5
41400	Overriding commission revenue			12,828		12,550		$\overline{a}$
41500	Net gain from investment
41510	Interest income			385,555	3	293,074	$\mathbf{2}$	32
41521	Gain or loss on valuation of	12(7)
	financial assets or financial
	liabilities at fair value through
41522	profit or loss Realized gain or loss on	12(7)	(	865,776) (	6)	606,291	4(	243)
	available-for-sale financial
	assets					217,019	2 ₀	100)
41524	Realized gain or loss on
	investments in debt instrument
	without active market					12,166	€	100)
41550 41570	Foreign exchange gain (loss) Gain (loss) on investment	6(7)		162,912	1 ₆	300,407) (	$2)$ (	154)
	property			19,723		17,211		15
41585	Expected credit impairment and 6(4)
	reversal profit from investments		€	782)
41600	Gain (loss) upon reclassification 6(3)
	of applying overlay approach			694, 167	5
	Total net gain from investment			395,799	3	845,354	6 €	53)
41800	Other operating revenues			210,045	1	2,163		9611
	Total operating revenues			14,871,535	100	14,599,949	$\overline{100}$	2
51000	Operating costs
51200	Reinsurance claims paid			8,505,936) (	57) (	8,109,968) (	56)	5
41200	Less: Reinsurance claims
51260	recovery Retention reinsurance claims			493,982	3	541, 161	4(	9)
	paid			8,011,954) (	$54)$ (	7,568,807) (	52)	6
51300	Net changes in other insurance	6(8)
	liabilities			673,093) (	$4)$ (	753,552) (	$5)$ (	11)
51500	Reinsurance commission expenses			4,424,007) (	$30)$ (	4,210,496) (	29)	5
51800	Other operating costs			14,745)	$\blacksquare$	256)		5660
	Total operating costs			$\overline{13, 123, 799}$ )	$\overline{88}$	$12,533,111)$ (	$\sqrt{86}$	5
58000	Operating expenses
58100	Selling expenses			235,320) (	$2)$ (	$214, 173)$ (	1)	10
58200 58300	Administration expenses Training expenses			$133,945$ ( 1,421)	$1)$ (	$158, 121)$ ( 1,327	$1)$ ( $\blacksquare$	15) 7
58400	Expected credit impairment	13			$\sim$ -6
	reversal from non-investments
	Total operating expenses			370,681)	$\overline{3}$	$\overline{373,621}$ )	$\overline{2}$ ) (	$\bf{D}$
	Net operating income			1,377,055	9	1,693,217	12 t	19)
59000 62000	Non-operating income and expenses Income from continuing			42	$\blacksquare$	940	$\blacksquare$ (	96)
	operations before tax			1,377,097	9	1,694,157	12(	19)
63000	Income tax expense	6(17)		327,026	$\overline{2}$	304,698)	$\overline{2}$
64000	Income from continuing
66000	operations after tax Net income			1,050,071	7 7	1,389,459	10 -0	24)
				1,050,071		\$ 1,389,459	10 ^° $\epsilon$	24)

(Continued)

CENTRAL REINSURANCE CORPORATION
STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

				2018	Years ended December 31	2017		Changes Percentage
	Items	Notes		AMOUNT	%	AMOUNT	℅	$(\%)$
83000	Other comprehensive income
83100	Items may not be reclassified to
	profit or loss subsequently
83110	Remeasurements of defined
	benefit plans		\$	308		\$ 548	$\sqrt{ }$ ٠	44)
83180	Income tax relating to the items
	may not be reclassified to profit
	or loss subsequently		(	62)	- (	93)	- (	33)
83200	Items may be reclassified to
	profit or loss subsequently
83210	Exchange differences on
	translation of foreign financial
	statements			57,742	- (	90,152) (	$1)$ (	164)
83220	Unrealized gain or loss on	12(7)
	available-for-sale financial
	assets					839,410	6<	100
83295	Other comprehensive income	6(3)
	(loss) upon reclassification of
	applying overlay approach		$\epsilon$	694,167) (	5)
83280	Income tax relating to items that 6(17)
	may be reclassified			88,740	1 ₀	105,771) (	$1)$ (	184)
	Total other comprehensive income
	(loss) for the year (after tax)			547,439) (	4)	643,942	4(	185)
85000	Total comprehensive income for
	the year		\$	502,632	3 \$	2,033,401	14(	75)
	Earnings per share
97500	Basic and Diluted (in NT	6(16)
	dollars)		\$		1.78 $\sqrt{3}$		2.35

The accompanying notes are an integral part of these financial statements. $\bar{z}$

, REINSURANCE CORPORATION TATEMENTS OF CHANGES IN EQUITY	Expressed in thousands of New Taiwan dollars
CENTRA?

					Retained Earnings			Other Equity Interest
	Notes	Common Stock	Capital Reserve Legal Reserve Special Reserve			Undistributed Earnings	Exchange Differences on Transaction of Foreign Financial Statements	Losses on Available-for- Sale Financial Assets Unrealized Gains or		Other Comprehensive Income (Loss) Upon Reclassification of Applying Overlay Approach	Total Equity

$\frac{1}{2}$
Balance at January 1, 2017		\$5.622,750	300,000 ÷,	\$1,601,584	\$1,434,161	\$798.710	$9,158$ ) G	ڽ	248,838)	65	9,499,209 49
Net income for the year						1,389 459					1,389,459
Other comprehensive income (loss) for the year						455	74,826		718,313		643,942
l'otal comprehensive income (loss)						1,389,914	74,826		718.313		2,033,401
Distributions of 2016 carnings
Legal reserve				153,158		153,158
Special reserve	6(16)				135,268	135,268
Cash dividends	6(16)					281,138					281, 138)
Appropriation for equalization reserve for the year					258,283	258,283
Balance at December 31, 2017		5.622,750	300,000 م،	\$1,754,742	31.827,712	\$1,360,777	83,984 ائ		469,475		11,251,472 ا⊕
2018
Balance at January 1, 2018		\$5,622,750	300,000 ÷	\$1,754,742	\$1,827,712	\$1,360,777	83,984) ٣	Ġ.	469,475	69	11,251,472 ç,
Effect of adopting IFRS 9 retrospectively						68,946			469,475	544,828	6,407
Balance, January 1, 2018 after adjustments		5,622,750	800,000	1,754,742	1.827,712	1,291,831	83,984			544,828	11,257,879
Net income for the year						1,050,071					1.050,071
Other comprehensive income (loss) for the year						246	49,229			596,914	547,439
Total comprehensive income (loss)						1,050,317	49,229			596,914	502,632
Distributions of 2017 earnings
Legal reserve				277,891		277,891
Special reserve	6(16)				6,948	6.948
Cash dividends	ette)					562,275					562,275
Stock dividends	6(16)	281,138				281,138
Recovery of special reserve	6(16)				$131,439$ )	131,439
Appropriation for equalization reserve for the year					299,119	299,119
Balance at December 31, 2018		\$ 5.903.888	000.000	\$2,032,633	\$2,002,340	\$1,046,216	34,755 의			52,086 ی	11,198,236 SP

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

CENTRAL REINSURANCE CORPORATION STATEMENTS OF CASH FLOWS (Expressed in thousands of New Taiwan dollars)

		Years ended December 31
		2018		2017

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax	\$		\$
Adjustments		1,377,097		1,694,157
Adjustments to reconcile profit (loss)
Depreciation		9,013		9.043
Amortization		1,726		1,558
Provision for loss allowance of reinsurance contract assets		9,757
Loss (gain) on valuation of financial assets and liabilities at
fair value through profit or loss		681,491		38,829
Interest income	(	412.432) (		308,508
Dividend income	(	$111,926$ ) (		118,975
Net change in reserves		1,036,415		933,721
Expected credit impairment on investments		782
Expected credit impairment reversal from non-investments	(	5)
Gain upon reclassification of applying overlay approach	€	694, 167)
Unrealized foreign exchange (gain) loss	(	196,375)		143,033
Changes in operating assets and liabilities
Changes in operating assets
Accounts receivable		32.981	C	139,537
Financial assets at fair value through profit or loss		3,440,100	$\epsilon$	149,872)
Proceeds from repayments of held-to-maturity financial
assets				1,386,184
Financial assets at amortized cost	$\overline{(\ }$	3,351,251)
Investments in debt instrument without active market				12,000
Held-to-maturity financial assets				1,764,826
Other financial assets		447, 163		478,103
Reinsurance contract assets	(	406,874)	€	194,292
Other assets Changes in operating liabilities	$\overline{(\ }$	336,149)		32,886
Accounts payable	(	100,057)		92,730
Provisions		1,916)		18,419
Other liabilities		10,506		10,968
Cash inflow generated from operations		1.435,879		1,219,415
Interest received		410,927		320,893
Dividend received		111,854		119,039
Income tax paid		400,211 )		195,184
Net cash flows from operating activities		558.449		464, 163
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment		$5,240$ ) (		5,070 )
Acquisition of intangible assets		5,990)
Acquisition of investment property		73)		298
Net cash flows used in investing activities		11,303)		$\overline{5,368}$
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of cash dividends		562,275)		281,138
Net cash flows used in financing activities		562,275)		281,138
Effects of exchange rate changes		$11,746$ )		5,814
Net increase in cash and cash equivalents		973.125		1,183,471
Cash and cash equivalents at beginning of year		16,772,180		15,588,709
Cash and cash equivalents at end of year		17,745,305		16,772,180

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

REPORT OF INDEPENDENT ACCOUNTANTS

PWCR18000360 To Central Reinsurance Corporation

Opinion

We have audited the accompanying balance sheets of Central Reinsurance Corporation (the "Company") as of December 31, 2018 and 2017, and the related statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017 and its financial performance and its cash flows for the years then ended in accordance with the "Regulations Governing the Preparation of Financial Reports by Insurance Enterprises" and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the "Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants" and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the "Code"), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

資誠聯合會計師事務所 PricewaterhouseCoopers, Taiwan 11012 秦北市信義區基隆路一段 333 號 27 樓 27F, No. 333, Sec. 1, Keelung Rd., Xinyi Dist., Taipei 11012, Taiwan T: +886 (2) 2729 6666, F:+ 886 (2) 2729 6686, www.pwc.tw

. . . . . . . . . . . . . . . . . . . .

Recognition of reinsurance revenue

Description

For the accounting policy for reinsurance revenue, please refer to Note 4(25) of the financial statements; for critical accounting estimates and assumptions of reinsurance revenue, please refer to Note 5(2) of the financial statements.

The Company's reinsurance revenue accounts for 103% of its operating revenues. The Company estimates reinsurance revenue based on an accrual basis; that is, once reinsurance contracts are signed, the Company elects the ceding company's annual forecasted reinsurance information and then calculates the revenue proportion to be recognized in each quarter based on previous experience of actual statements. Thereafter, when actual statements are received each quarter, original estimates are reversed and actual statements are accrued. The Company then evaluates the reason for differences between actual statements and estimated amounts to adjust the estimated revenues of remaining period, accordingly. Because reinsurance revenue is material to the financial statements and the recognition of reinsurance revenue involves management's professional judgement, we have thus included the recognition of reinsurance revenue as one of the key audit matters in our audit.

How our audit addressed the matter

The procedures that we have conducted in response to specific aspects of the above-mentioned key audit matter are summarized as follows:

1. Obtained an understanding and assessed the Company's policies, internal controls, and processing procedures related to the recognition of reinsurance revenue.
1. On a sample basis, tested the effectiveness of internal controls related to the recognition of reinsurance revenue, including:
(1) Checking the accuracy and completeness of recording reinsurance contracts into their system.
(2) Checking the consistency of reinsurance revenue recorded in the system with the information provided by the ceding company.
(3) Checking the revenue proportion allocated to each quarter during the contract period and recognized amounts used by management to determine their accuracy.
(4) Checking the accuracy of actual statements and recorded reversal of estimates.
(5) Checking whether management had provided clear reasons for its adjustments on the amounts of estimated revenues of each quarter and checked whether such adjustments were appropriately approved.
1. On a sample basis, checked information of actual statements to assess the reasonableness of the Company's adjustments to estimated reinsurance revenue.

Estimation of claims reserve

Description

For the accounting policy for claims reserve (under insurance liabilities), please refer to Note 4(20) of the financial statements; for critical accounting estimates and assumptions of claims reserve, please refer to Note 5(2) of the financial statements; for details on claims reserve, please refer to Note 6(8) of the financial statements.

The Company's claims reserve accounts for 61% of its insurance liabilities. Aside from statutorily required insurances, the Company estimates the ultimate loss ratio and provisions claims reserve based on assessment factors such as information provided by the ceding company, claim development factors, contract type, insurance risk characteristics, market information, and judgement for the experience of claims and underwriting. Because claims reserve is material to the financial statements and the methods and assumptions for calculating claims reserve involve management's professional judgement, we have thus included the estimation of claims reserve as one of the key audit matters in our audit.

How our audit addressed the matter

The procedures that we have conducted in response to specific aspects of the above-mentioned key audit matter are summarized as follows:

1. On a sample basis, checked the accuracy and completeness of financial information used in calculating claims reserve.
1. Used the work of actuarial specialists to assist us in assessing the reasonableness of Incurred-But-Not-Reported losses reserve (including assumed and ceded claims reserve), including:
(1) Evaluated whether the rationale of the method for calculating the Incurred-But-Not-Reported losses reserve was justifiable.
(2) On a sample basis, developed a range of reasonable estimated Incurred-But-Not-Reported losses reserve with reference to the historical claims information classified by insurance types as of December 31, 2018, assessed that the estimated Incurred-But-Not-Reported fall within our range of estimates at the aggregate level. In addition, evaluated the rationale of additional adjustments.
(3) Determined whether the expected loss ratio in relation to the estimated claims reserve was reasonable for the three-month period ended December 31, 2018.
1. Tested a selection of material claims that were Reported-But-Not-Paid and assessed the reasonableness of the claims reserve for such cases.

Responsibilities of management and those charged with governance for the financial statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the "Regulations Governing the Preparation of Financial Reports by Insurance Enterprises" and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including audit committee, are responsible for overseeing the Company's financial reporting process.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ROC GAAS will always detect a material misstatement when it exists. Misstatements can arise from error or fraud and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ROC GAAS, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
1. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

1. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
1. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
1. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Chen Hien-I

co.c. x

Chen, Hsien-I

Lai, Chung-Hsi

For and on behalf of PricewaterhouseCoopers, Taiwan March 20, 2019

--------------------------------------The accompanying financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

CENTRAL REINSURANCE CORPORATION

Earnings Distribution Plan

For the Year of 2018

(Unit: NT\$)

Items	Total	Grand Total
Unappropriated retained earnings of previous years		363,964,245
Less: Effect of adopting IFRS9 retrospectively		(68, 946, 458)
Adjustments unappropriated retained earnings of previous years		295,017,787
Add: The remeasurements of defined benefit plans(Note 1)	246,824
Add: Net income of 2018	1,050,070,967
Less : Legal reserve	(210, 014, 193)
Less: Special reserve(Note 2)	(304, 369, 063)	535,934,535
Retained earnings in 2018 available for distribution		830,952,322
Distributable item:
Shareholders' dividends - Cash dividends: NT\$0.9 per share	531,349,875	531,349,875
Unappropriated retained earnings		299,602,447

Note 1: Pursuant to Article 11 of the Rules for the Preparation of Financial Reports by Insurance Institutions, the Company defined the remeasurements of defined benefit plans transferred to retained earnings.

Note 2: Special reserve NT\$304,369,063 are as follows:

(1) According to the Insurance regulations, the provision for equalization reserve NT\$299,118,708 of the year 2018 had been recognized as special reserve.

(2) According to the Insurance regulations, the provision for FinTech NT\$5,250,355 had been recognized as special reserve.

Note 3: The surplus of year 2018 is allocated by priority.

Audit Committee's Review Report

TO: 2019 Annual General Meeting of Shareholders Central Reinsurance Corporation (Central Re)

The Board of Directors has prepared the Company's 2018 business report, financial report, and proposal for distribution of earnings. The CPA firm of PricewaterhouseCoopers, Taiwan has audited the financial report and issued the audit report.

The above business report, financial report, and proposal for distribution of earnings have been reviewed and determined to be correct and accurate by the Audit Committee members of Central Re. In accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report.

Central Reinsurance Corporation

Convener of the Audit Committee: Chou, Yu-Cheng March 20, 2019

CENTRAL REINSURANCE CORPORATION

Comparison Table for the Procedures for Acquiring and Disposing of Assets

After amendment	Before amendment	Reason for amendment
Article 2 The Scope of	Article 2 The Scope of	$1.\text{To}$ amend
Assets	Assets	Subparagraph 2 of
The term "assets" as used in the Procedures includes the following: 1. Investments in stocks,	The term "assets" as used in the Procedures includes the following: 1. Investments in stocks,	Paragraph 1 and add Subparagraph 5 right-of-use assets in accordance with the
government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities.	bonds, government corporate bonds, financial bonds. securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities.	Order No. Financial- Supervisory- Securities- Corporate- 1070341072 of the Financial Supervisory Commission on 2018/11/26 which the amend "Regulations the
2. Real property (including land, houses and buildings, investment property) and equipment.	2. Real property (including land, houses and buildings, investment property, and rights to use land) and	Governing Acquisition and Disposal of Assets by Public Companies" (hereinafter "the
3. Memberships.	equipment.	Regulations").
4. Patents, copyrights, trademarks, franchise rights, and other intangible assets.	3. Memberships. 4. Patents, copyrights, trademarks, franchise rights, and other intangible	2. The Subparagraph 5 to 8 were rearranged to Subparagraph 6 to 9.
5. Right-of-use assets.	assets.	3. To amend the
6. Claims of financial $\vert$ 5. Claims institutions (including) receivables, bills purchased and discounted, loans, and overdue receivables).	$\circ$ f $f$ inancial $\vert$ institutions (including) receivables, bills purchased and discounted, loans, and overdue receivables). 6. Derivatives.	wording.
7. Derivatives.
8. Assets acquired or disposed of in connection with demergers, mergers, acquisitions, or transfer of shares in accordance with law.	7. Assets acquired or disposed of in connection with demergers, mergers, acquisitions, or transfer of shares in accordance with law.

Before and After Amendments

After amendment	Before amendment	Reason for amendment
9. Other major assets.	8. Other major assets.
Acquisition and disposal of derivatives shall be $\mathbf{in}$ compliance with "Procedures" for Transaction of Financial Derivatives" _of the Company.	Acquisition and disposal of derivatives shall be in compliance with "Procedures" for Transaction of Financial Derivatives" _of the Company.
Article 3 Definitions	Article 3 Definitions	1. To amend the article
Terms used in the Procedures are defined as below:	Terms used in the Procedures are defined as below:	number of Company cited Act in
1. Assets acquired or disposed through mergers, demergers, acquisitions, or transfer $\circ$ of shares in with accordance law: Refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts, or to transfer of shares from another company through issuance of new shares of its own as the consideration (hereinafter) therefor "transfer of shares") under Article 156-3 of the "Company Act". 2. Related party or subsidiary: defined the As in "Regulations Governing Preparation of Financial and Operational Reports by Insurance Institutions". 3. Professional appraiser: Refers to a real property	1. Assets acquired or disposed through mergers, demergers, acquisitions, or transfer $\circ$ of shares in accordance with law: Refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts, or to transfer of shares from another company through issuance of new shares of its own as the consideration (hereinafter) therefor "transfer of shares") under Article 156, Paragraph 8 of the "Company Act". 2. Related party or subsidiary: defined the in As "Regulations Governing" Preparation of Financial and Operational Reports by Insurance Institutions". 3. Professional appraiser: Refers to a real property	Subparagraph $\mathbf{1}$ in accordance with the amended Company issued Act on 2018/11/1. 2. To add Subparagraph 7 to 8 in accordance with the Subparagraph 8 to 9 of Article 4 of the Regulations.
appraiser or other person duly authorized by law to	appraiser or other person duly authorized by law to

the the value value $\mathbf{in}$ $\mathbf{in}$ engage engage appraisal of real property or appraisal of real property or equipment. equipment. 4. Date of occurrence: Refers 4. Date of occurrence: Refers to the date of contract to the date of contract signing, date of payment, signing, date of payment, date of consignment trade, date of consignment trade, date of transfer, dates of date of transfer, dates of _of directors _of directors boards boards resolutions, or other date resolutions, or other date confirm confirm that can the that can the counterpart and monetary counterpart and monetary amount of the transaction, amount of the transaction, whichever date is earlier; whichever date is earlier; provided, for investment provided, for investment for which approval of the for which approval of the competent authority is competent authority is required, the earlier of the required, the earlier of the above date or the date of above date or the date of receipt of approval by the receipt of approval by the competent authority shall competent authority shall apply. apply.	After amendment	Before amendment	Reason for amendment





















5.Mainland China 5. Mainland China area area
Refers Refers investment: investment: to to
the the investments investments $\mathbf{in}$ in
China China mainland mainland area area
approved by the Ministry of approved by the Ministry of
Affairs Economic Affairs Economic
Investment Commission or Investment Commission or
conducted in accordance conducted in accordance
with the provisions of the with the provisions of the
Regulations Regulations Governing Governing
Permission for Investment Permission for Investment
or Technical Cooperation in or Technical Cooperation in
the Mainland Area. the Mainland Area.
6. Total assets: Refers to the 6. Total assets: Refers to the
total assets stated in the total assets stated in the
most recent Company's most recent Company's
financial report prepared financial report prepared
under the "Regulations" under the "Regulations"
Governing Preparation of Governing Preparation of Financial and Operational Financial and Operational
Reports by Insurance Reports Insurance by

After amendment	Before amendment	Reason for amendment
Institutions".	Institutions".
7. Securities exchange:
securities "Domestic
exchange" refers to the
Taiwan Stock Exchange
"foreign Corporation;
securities exchange" refers
to any organized securities
exchange market that is
regulated by the competent
securities authorities of the
jurisdiction where it is
located.
8. Over-the-counter venue
$($ "OTC venue", "OTC"):
"Domestic OTC venue"
refers to a venue for OTC
trading provided by a
securities firm 1n
accordance with the Governing Regulations
Securities Trading on the
Taipei Exchange; "foreign
OTC venue" refers to a
financial at a venue
institution that is regulated
by the foreign competent
that authority and 1S
permitted conduct to
securities business.
Article 4 Operating	Article 4 Operating	For the consistency of
Procedures	Procedures	rules. internal the
1. The degree of authority	1. The degree of authority	transaction process - of
delegated and the levels to	delegated and the levels to	acquisition or disposal
which authority is	which authority is	of real property $-$ is
delegated: shall be executed	delegated: shall be executed	amended in accordance
accordance with the in	accordance with the in	with the cycle of
table Company's of	table Company's of	investment property and
governing the delegation of	governing the delegation of	the cycle of property for
authority and responsibility.	authority and responsibility.	self-use of the Internal
2. Execution Unit and	2. Execution Unit and	Control System and Audit Internal
transaction process:	transaction process:	Implementation Rules.

After amendment	Before amendment	Reason for amendment
$(1)$ With respect to the	$(1)$ With respect to the
acquisition or disposal	acquisition or disposal
securities, $\circ$ f the	of securities, the
unit shall execution	execution unit shall
analyze and forecast the	analyze and forecast the
future outlook based on	future outlook based on
the market condition, so	the market condition, so
as to formulate trading	as to formulate trading
and get the terms	and get the terms
approval of Authorized	approval of Authorized
level in accordance with	level in accordance with
the Company's table	the Company's table
governing the	governing the
delegation of authority	delegation of authority
and responsibility.	and responsibility.
Acquisition and	Acquisition and
disposal of securities	disposal of securities
shall be in compliance	shall be in compliance
with "Procedures for	with "Procedures for
Governing Various	Governing Various
Applications of Funds"	Applications of Funds"
of the Company.	of the Company.
$(2)$ With respect to the	$(2)$ With respect to the
acquisition or disposal	acquisition or disposal
of real property, the	of real property, the
execution unit shall	execution unit shall
formulate trading terms	formulate trading terms
and obtain an appraisal	and get the approval of
report issued by the	the Chairman and audit
professional appraiser before get the approval	committee and submit a
of the Chairman and	proposal for discussion the board by of
audit committee and	directors. But for the
submit a proposal for	reason of timeliness, the
discussion by the board	transactions be can
of directors.	executed in respect of
$(3)$ With respect the to	the approval οf
acquisition or disposal	Chairman and
of equipment and other	subsequently have the
assets, the execution	decisions submitted to
shall unit conduct	and ratified by audit
analysis and appraisal	committee the and
	board of directors.

After amendment	Before amendment	Reason for amendment
of the transaction, and formulate trading terms and get approval in accordance with the table Company's governing the delegation of authority and responsibility.	$(3)$ With respect to the acquisition or disposal of equipment and other assets, the execution conduct unit shall analysis and appraisal of the transaction, and formulate trading terms and get approval in accordance with the table Company's governing the delegation of authority and responsibility.
Article 5 Appraisal Procedures	Article 5 Appraisal Procedures	1.Paragraph $\mathbf{1}$ and Paragraph 3 1S
The acquisition or disposal of real property, equipment or right-of-use assets thereof where the transaction amount reaches 20 percent of the Company's paid-in capital or NT\$300 million or more, the Company, unless transacting with a domestic government agency, engaging others to build on its own land, rented land, or acquiring or disposing of equipment or right-of-use assets thereof held for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions: 1. Where due to special it circumstances is necessary to give a limited price, specified price, or special price as a reference	The acquisition or disposal of real property or equipment where the transaction amount reaches 20 percent of the Company's paid-in capital or NT\$300 million or more, the Company, unless transacting with a government agency, engaging others to build on its own land, engaging others to build on rented land, or engaging others to build on $ $ acquiring or disposing of business equipment, shall obtain an appraisal report the prior $\mathsf{to}$ date _of occurrence of the event from a professional appraiser and shall further comply with the following provisions: 1.Under special it circumstances is. necessary to take a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be approved by audit	amended to include the right-of-use assets accordance with in Article 9 and Article 11 of the Regulations. 2.T _o amend the wording.

$\sim$ $\sim$

After amendment	Before amendment	Reason for amendment
basis for the transaction	committee and submitted to
price, the transaction shall	the board of directors for
approved by audit be	resolution in advance, and
committee and submitted to	the above procedure shall
the board of directors for	also be followed once the
resolution in advance; the	terms and conditions of the
same procedure shall also	transaction are changed in
be followed whenever there	the future.
is any subsequent change to	2. Where the transaction
the terms and conditions of	amount is NT\$1 billion or
the transaction.	more, appraisals from two
2. Where the transaction	professional more or
amount is NT\$1 billion or	shall appraisers be
more, appraisals from two	obtained.
professional more or	3. Where any one of the
shall be appraisers obtained.	following circumstances
	applies with respect to the
3. Where any one of the	professional appraiser's
following circumstances	appraisal results, unless all
applies with respect to the	the appraisal results for the
professional appraiser's appraisal results, unless all	assets to be acquired are higher than the transaction
the appraisal results for the	amount, or all the appraisal
assets to be acquired are	results for the assets to be
higher than the transaction	disposed of are lower than
amount, or all the appraisal	the transaction amount, a
results for the assets to be	certified public accountant
disposed of are lower than	(CPA) shall be engaged to
the transaction amount, a	perform the appraisal in
certified public accountant	accordance with the
(CPA) shall be engaged to	provisions of Statement of
perform the appraisal in	Auditing Standards No. 20
accordance with the	published by. the
provisions of Statement of	Accounting Research and
Auditing Standards No. 20	Development Foundation
published $\mathbf{b}$ the	of the ROC (hereinafter
Accounting Research and	referred to as "ARDF") and
Development Foundation	render a concrete opinion
of the ROC (hereinafter	regarding the reason for the
referred to as "ARDF") and	discrepancy the and
render a concrete opinion	appropriateness the of
regarding the reason for the the	transaction price:
discrepancy and	$(1)$ The discrepancy

After amendment	Before amendment	Reason for amendment
appropriateness of the	between the appraisal
transaction price:	and the result
$(1)$ The discrepancy	transaction amount is 20
between the appraisal	percent or more of the
the result and	transaction amount.
transaction amount is	(2) The discrepancy
20 percent or more of	between the appraisal
the transaction amount.	results of two or more
(2) The discrepancy	professional appraisers
between the appraisal	is 10 percent or more of
results of two or more	the transaction amount.
professional appraisers	4. No more than 3 months
is 10 percent or more of	may elapse between the
the transaction amount.	date of the appraisal report
4. No more than 3 months	issued by a professional
may elapse between the	appraiser and the contract
date of the appraisal report	execution date; provided,
issued by a professional	publicly where the
appraiser and the contract	announced current value for
execution date; provided,	the same period is used and not more than 6 months
the publicly where announced current value	have elapsed, an opinion
for the same period is used	may still be issued by the






	obtain the financial

	company for the most recent
	period, certified or reviewed
	by a CPA for reference in
	appraising the transaction
	price, and if the dollar
by a CPA for reference in	amount of the transaction is
appraising the transaction
price, and if the dollar
amount of the transaction is
20 percent of the Company's
paid-in capital or NT\$300
and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser. The Company acquiring or disposing of securities shall, date to to the _of prior occurrence of the event. financial the obtain statements of the issuing company for the most recent period, certified or reviewed	professional original appraiser. The Company acquiring or disposing of securities shall, prior the date to of occurrence of the event, statements of the issuing 20 percent of the Company's paid-in capital or NT\$300 million Or the more, Company shall additionally engage a CPA prior to the date of occurrence of the

After amendment	Before amendment	Reason for amendment
million the or more,	event to provide an opinion
Company shall additionally	regarding the reasonableness
engage a CPA prior to the	of the transaction price. If the
date of occurrence of the	CPA needs to use the report
event to provide an opinion	of an expert as evidence, the
regarding the reasonableness	CPA shall do SO in
of the transaction price. If the	accordance with the
CPA needs to use the report	provisions of Statement of
of an expert as evidence, the	Auditing Standards No. 20
shall CPA. do SO in	published by the ARDF. This
accordance with the	requirement does not apply,
provisions of Statement of	however, to publicly quoted
Auditing Standards No. 20	prices of securities that have
published by the ARDF. This	an active market, or where
requirement does not apply,	otherwise provided by the
however, to publicly quoted	regulations of the Financial
prices of securities that have	Commission Supervisory
an active market, or where	(hereinafter referred to as
otherwise provided by the	" $FSC$ ").
regulations of the Financial	Except for transactions with
Supervisory Commission	government the agencies,
(hereinafter referred to as	Company acquires or
" $FSC$ ").	disposes of memberships or
Where the Company	intangible assets and the
disposes $\sigma$ acquires or	transaction amount reaches
intangible assets $or$	20 percent or more of the
	right-of-use assets thereof or Company's paid-in capital or
memberships and	the $\vert$ NT\$300 million or more, the
20 percent or more of the	transaction amount reaches Company shall obtain a CPA's opinion on the
Company's paid-in capital or $\vert$	reasonableness of the
NT\$300 million or more,	transaction price prior to the
$\frac{except}{in}$ transactions with a	date of occurrence of the
domestic government	event; the CPA shall comply
agency, the Company shall	with the provisions of
engage a $CPA$ prior to the	Statement of Auditing
date of occurrence of the	Standards No. 20 published
event to render an opinion on	by the ARDF.
the reasonableness of the	The calculation of the
$transaction price$ ; the CPA	transaction amounts of
shall comply with the	preceding provisions shall be
	provisions of Statement of based on Paragraph 2 of
	Auditing Standards No. 20 Article 6 and "within the

After amendment	Before amendment	Reason for amendment
published by the ARDF.	preceding year" as used
calculation of The the	herein refers to the year
transaction amounts referred	preceding the date _of
to in the preceding three	occurrence of the current
paragraph shall be done in	transaction. Items for which
accordance with Paragraph 2	an appraisal report from a
of Article 6 and "within the	professional appraiser or a
preceding year" as used	CPA's opinion has been
herein refers to the year	obtained need not be counted
preceding the date _of occurrence of the current	toward the transaction
transaction. Items for which	amount.
an appraisal report from a	(Omitted)
professional appraiser or a
CPA's opinion has been
obtained need not be counted
transaction the toward
amount.
(Omitted)
Article 6 Items and	Article 6 Items and	1. To amend this Article
Standards of Public	Standards of Public	accordance with 1n
Disclosure	Disclosure	Article 31 of the
Under any of the following	Under any of the following	Regulations.
circumstances, the Company	circumstances, the Company	2.T _O amend the
acquiring or disposing of	acquiring or disposing of	wording.
publicly shall assets	publicly shall assets
announce and report the	announce and report the
relevant information on the	relevant information on the
FSC's designated website in	FSC's designated website in
the appropriate format as	the appropriate format as
prescribed by regulations two	prescribed by regulations two
hours before the beginning of trading hours on the next	hours before the beginning of trading hours on the next
business day following the	business day following the
date of occurrence of the	date of occurrence of the
event:	event:
1. Acquisition or disposal of	1. Acquisition or disposal of
real property or right-of-use	real property from or to a
assets thereof from or to a	related party, or acquisition
related party, or acquisition	or disposal of assets other
or disposal of assets other	than real property from or
than real property $or$	to a related party where the
right-of-use assets thereof	transaction amount reaches

$\mathcal{A}$

After amendment	Before amendment	Reason for amendment
from or to a related party	20 percent or more of the
the transaction where	Company's paid-in capital,
amount reaches 20 percent	10 percent or more of the
or more of the Company's	Company's total assets, or
paid-in capital, 10 percent	NT\$300 million or more,
or more of the Company's	except for the trading of
total assets, or NT\$300	government bonds or bonds
million or more; provided,	under repurchase and resale
this shall not apply to	agreements, or subscription
$\circ$ of trading domestic	or redemption of domestic
government bonds or bonds	money market funds issued
under repurchase and resale	by the securities investment
agreements, or subscription	trust enterprise.
or redemption of money market funds issued by	2. Merger, demerger,
securities domestic	acquisition, or transfer of
investment trust enterprise.	shares.
	3. Losses from derivatives
2. Merger, demerger,	trading reaching the limits
acquisition, or transfer of shares.	on aggregate losses or
	individual losses on
3. Losses from derivatives trading reaching the limits	contracts set out in "Procedures" for
on aggregate losses or	Transaction of Financial
individual losses on	Derivatives" $\circ$ f the
out contracts set in	Company.
"Procedures" for
Transaction of Financial	4. Where the type of asset acquired or disposed of is
Derivatives" of the	business equipment/
Company.	machinery for business use,
4. Where equipment or	the trading counterparty is
right-of-use assets thereof	not a related party and the
for business use are	transaction amount reaches
acquired or disposed of,	of the following one
furthermore the and	circumstances:
transaction counterparty is	(1) The paid-in capital of
not a related party, and the	the Company is less
transaction amount reaches	than NT\$10 billion and
NT\$500 million or more.	the transaction amount
5. Where land is acquired	reaches NT\$500 million
under an arrangement on	or more.
engaging others to build on	$(2)$ The paid-in capital of
the Company's own land,	the Company is NT\$10

After amendment	Before amendment	Reason for amendment
engaging others to build on	billion or more and the
rented land, joint	transaction amount
construction and allocation	reaches NT\$1 billion or
of housing units, joint	more.
construction and allocation	5. Where land is acquired
of ownership percentages,	under an arrangement on
or joint construction and	engaging others to build on
sale, separate and	the Company's own land,
furthermore the transaction	engaging others to build on
counterparty is not a related	rented land, joint
party, and the amount the	construction and allocation
Company expects to invest in the transaction reaches	of housing units, joint
NT\$500 million or more.	construction and allocation
	of ownership percentages,
6. Where an asset transaction	or joint construction and the
other than any of those referred to in the preceding	sale, separate and amount the Company
subparagraphs, five a	expects to invest in the
disposal of receivables, or	transaction reaches
investment in the an	NT\$500 million or more.
Mainland China area	6. Where an asset transaction
reaches 20 percent or more	other than any of those
of the Company's paid-in	referred to in the preceding
capital or NT\$300 million;	subparagraphs, five a
provided, this shall not	disposal of receivables by a
apply to the following	financial institution, or an
circumstances:	investment in the Mainland
(1)Trading of domestic	China area reaches 20
government bonds.	percent or more of paid-in
(2) Securities trading on	capital or NT\$300 million;
securities exchanges or	provided, this shall not
OTC markets or	apply to the following
subscription of ordinary	circumstances:
corporation bond $\overline{0}$	(1) Trading of government
general bank debentures	bonds.
without equity	(2) Securities trading $b$ y
characteristics	investment
(excluding subordinated	professionals on foreign
debt) that are offered	or domestic securities
and issued the in	exchanges or
primary market, $\overline{\text{or}}$	over-the-counter
subscription or	markets or common
redemption of securities

After amendment	Before amendment	Reason for amendment
investment trust funds	corporation bond and
or futures trust funds .	financial bond that do
(3) Trading of bonds under	involve not
repurchase/resale	shareholding rights
agreements, or	subscribing on domestic
subscription or	IPO market.
redemption of domestic	(3) Trading of bonds under
money market funds	repurchase/resale
issued by the securities	agreements, or
investment trust	subscription or
enterprise.	redemption of domestic
The transaction amount of	market money funds
the preceding paragraph shall	issued by the securities
be calculated as follows:	investment trust
1.The amount of any	enterprise.
individual transaction.	The transaction amount of
2. The cumulative transaction	the preceding paragraph shall
amount of acquisitions and	be calculated as follows:
disposals of the same type	1.The amount _of any
of underlying asset with the	individual transaction.
same trading counterparty	2. The cumulative transaction
within the preceding year.	amount of acquisitions and
3. The cumulative transaction	disposals of the same type
amount of acquisitions and	of underlying asset with the
(cumulative) disposals	same trading counterparty
acquisitions and disposals,	within the preceding year.
respectively) of real	3. The cumulative transaction
property or right-of-use	amount of real property
assets thereof within the	acquisitions and disposals
same development project	acquisitions (cumulative
within the preceding year.	and disposals, respectively)
4. The cumulative transaction	within the same
amount of acquisitions and	development project within
disposals (cumulative)	the preceding year.
acquisitions and disposals,	4. The cumulative transaction
respectively) of the same	amount of acquisitions and
within the security	(cumulative disposals
preceding year.	acquisitions and disposals,
"Within the preceding year" used in preceding as	respectively) of the same within security the


Paragraph refers to one year preceding the date $\vert$ of $\vert$	preceding year. "Within the preceding year"

After amendment	Before amendment	Reason for amendment
of the current occurrence	as used in Paragraph 2 refers
transaction. Items duly	to one year preceding the
in accordance announced	date of occurrence of the
with the Procedures need not	transaction. Items current
counted toward the be	duly announced $\mathbf{in}$
transaction amount.	accordance with the
(Omitted)	Procedures need not be
	the counted toward
	transaction amount.
	(Omitted)
Article 7 The Limits of	Article 7 The Limits of	To add the investment
Investment Amount	Investment Amount	amount of real property
The limits of investment	The limits of investment	right-of-use assets for
amount shall be followed as	amount shall be followed as	non-business use in
below:	below:	accordance with Article
1.The total investment	1. The total investment	7 of the Regulations.
amount of real property and	amount of real property
right-of-use assets thereof	shall be in accordance with
for non-business use shall	the provisions of Article
be in accordance with the	146-2 of the "Insurance"
provisions of Article 146-2	Act".
of the "Insurance Act" and	$2.$ The total investment
the related regulations.	amount of securities and
total 2.The investment	of individual limits
amount of securities and	securities shall be in
individual limits _of	accordance with the
shall be securities $\ln$	provisions of Article 146-1,
the accordance with	Article 146-5 and Article
provisions of Article 146-1,	146-6 of the "Insurance"
Article 146-5 and Article 146-6 of the "Insurance	Act".
Act".	$3.$ The total investment
	$\circ$ f foreign amount
3. The total investment	investment shall be in
foreign $ $ 0f amount shall be in investment	with accordance the provisions of Article 10 of
accordance with the	the "Regulations"
provisions of Article 10 of	Governing Financial and
the "Regulations"	Business Operations of
Governing Financial and	Professional Reinsurance
Business Operations $\circ$ of	Enterprises".
Professional Reinsurance
Enterprises".

After amendment	Before amendment	Reason for amendment
Article 8 The Disqualifying	Article 8 The Related Party	define To the
Criteria of The Providers of	Shall not be The Providers of	disqualifying criteria of
Appraisal Reports or	Appraisal Reports or	the related expert in
Professional Opinions	Professional Opinions	accordance with Article
Professional appraisers and	Professional appraisers and	5 of the Regulations.
officers, CPA. their	officers, their CPA,
and securities attorneys,	securities and attorneys,
underwriters that provide the	underwriters that provide the
with Company appraisal	Company with appraisal
reports, CPA's opinions,	reports, CPA's opinions,
opinions, attorney's or	attorney's opinions, or
underwriter's opinions shall	underwriter's opinions shall
following the meet	not be a related party of any
requirements:	party to the transaction.
1. May not have previously
received final a and
unappealable sentence to
imprisonment for 1 year or
longer for a violation of the
Securities and Exchange
Act, the Company Act, the
of Banking Act The
Republic of China, the
Act. the Insurance Financial Holding
the Company Act, or
Business Entity Accounting
Act, or for fraud, breach of
embezzlement, trust,
forgery of documents, or
occupational crime.
However, this provision
does not apply if 3 years
have already passed since
completion of service of the
sentence, since expiration
of the period _of a
suspended sentence, or
pardon since a was
received.
2. May not be a related party
or de facto related party of
the Company and any party

After amendment	Before amendment	Reason for amendment
to the transaction.
3. If the Company is required
to obtain appraisal reports
from two or more
professional appraisers, the
different professional
appraisers or appraisal
officers may not be related
parties or de facto related
parties of each other.
Article 9 Procedures for	Article 9 Procedures for	1.T ₀ include the
Acquiring or Disposing of	Acquiring or Disposing of	right-of-use assets in
Assets with Related Parties	Assets with Related Parties	accordance with
(Omitted)	(Omitted)	Article 15 of the
When the Company intends	When the Company intends	Regulations.
to acquire or dispose of real	to acquire or dispose of real	2.T _O amend the
right-of-use property or	property or other assets from	wording.
assets thereof from or to a	or to a related party, except
related party, or when it	for trading of government
intends to acquire or dispose	bonds under bonds,
of assets other than real	repurchase or reverse
right-of-use property or	repurchase agreements, or
assets thereof from or to a	subscription or redemption of
the and related party	domestic money market
transaction amount reaches	funds issued by the securities
20 percent or more of the Company's paid-in capital,	investment trust enterprise, transaction the amount
10 percent or more of the	reaches 20 percent or more of
Company's total assets, or	Company's paid-in the
NT\$300 million or more,	capital, 10 percent or more of
except in trading of domestic	the Company's total assets or
government bonds or bonds	NT\$300 million or more, the
under repurchase and resale	Company may not enter into
agreements, or subscription	contract or make any a -
redemption of money or	payment until the following
market funds issued by	matters have been approved
securities domestic	by more than half of all audit
investment trust enterprises,	committee members and
the Company may not	submitted to the board of
proceed to enter into a	directors for a resolution, and
transaction contract or make	shall be subject to mutatis
a payment until the following	mutandis application of
matters have been approved	Paragraphs 2 and 3 of Article

by the audit committee and 15. submitted to the board of 1. The purpose, necessity and directors for a resolution in anticipated benefit of the accordance with Article 15: acquisition or disposal of 1. The purpose, necessity and assets. anticipated benefit of the 2. The reason for choosing the acquisition or disposal of related party as a trading assets. counterparty. 2. The reason for choosing the 3. With respect to the related party as a trading acquisition of real property counterparty. from a related party, information 3. With respect to regarding the acquisition of real property $\circ$ f appraisal the or right-of-use assets reasonableness _of the thereof from a related party, preliminary transaction information regarding terms in accordance with Article 10 and Article 11. _of the appraisal reasonableness the _of 4. The date and price at which preliminary transaction the related party originally terms in accordance with acquired the real property, Article 10 and Article 11. original trading the 4. The date and price at which counterparty, that and the related party originally trading counterparty's acquired the real property, relationship to the company and the related party. original trading the that counterparty, and 5. Monthly flow cash trading counterparty's forecasts for the year relationship to the company the commencing from and the related party. anticipated month of signing of the contract, and 5.Monthly cash flow evaluation of the necessity forecasts the for year the of the transaction, commencing from and anticipated reasonableness of the funds month of signing of the contract, and utilization. evaluation of the necessity 6. An appraisal report from a of the transaction, and professional appraiser or a reasonableness of the funds CPA's opinion obtained in utilization. accordance with Paragraph 6. An appraisal report from a 1.	After amendment	Before amendment	Reason for amendment






































professional appraiser or a 7. Restrictive covenants and
CPA's opinion obtained in other important stipulations
accordance with Paragraph associated with the

$\beta$

$\hat{\mathbf{r}}$

After amendment	Before amendment	Reason for amendment
mortgage on the property as	cumulative amount loaned
security for a loan,	by the financial institution
provided, the actual	shall have been 70 percent
cumulative amount loaned	or more of the financial
by the financial institution	institution's appraised loan
shall have been 70 percent	value of the property and
or more of the financial	the period of the loan shall
institution's appraised loan	have been 1 year or more.
value of the property and	However, this shall not
the period of the loan shall	apply where the financial
have been 1 year or more.	institution is a related party
However, this shall not	of one of the trading
apply where the financial	counterparties.
institution is a related party of one of the trading	Where land and buildings
counterparties.	thereupon are combined as a
Where land and structures	single property purchased in transaction, one the
thereupon are combined as a	transaction costs for the land
single property purchased or	and the buildings may be
leased in one transaction, the	separately appraised in
transaction costs for the land	accordance with either of the
and the structures may be	means listed in the preceding
separately appraised in	paragraph.
accordance with either of the	When acquiring real estate
means listed in the preceding	from a related party, the
paragraph.	Company shall appraise the
When acquiring real property	cost of the real estate in
or right-of-use assets thereof	accordance with Paragraph $1$
from a related party, the	and Paragraph 2 above, in the
Company shall appraise the	meantime shall also engage a
cost of the real property or	CPA to review the appraisal
right-of-use assets thereof in	and render an opinion.
accordance with the	Where the Company acquires
preceding two Paragraph, in the meantime shall also	real estate from a related
engage a CPA to review the	party under any of the
appraisal and render $\underline{a}$	following circumstances, the
specific opinion.	acquisition shall be conducted in accordance with
Where the Company acquires	Paragraph 4 to $6$ of Article 9
real property or right-of-use	and the preceding three
assets thereof from a related	paragraphs do not apply:
party under any of the	1. The related party acquired
following circumstances, the

After amendment	Before amendment	Reason for amendment
acquisition shall be	real estate through the
conducted in accordance with	inheritance or as a gift.
Paragraph 4 to 5 of Article 9	2. More than 5 years will have
and the preceding three	elapsed from the time the
paragraphs do not apply:	related party signed the
1. The related party acquired	contract to obtain the real
real the property or	property to the signing date
right-of-use assets thereof	for the current transaction.
through inheritance or as a	3. The real property is
gift.	acquired through signing of
2. More than 5 years will	joint development a
have elapsed from the time	contract with the related
the related party signed the	party, or through engaging
contract to obtain the real	a related party to build real
property or right-of-use	either property, on
assets thereof to the signing	self-owned land or on
for date the current	rented land.
transaction.
3. The real property _is
acquired through signing of joint
development a contract with the related
party, or through engaging
a related party to build real
either property, on
self-owned land or on
rented land.
4.The real property
right-of-use for assets
business use are acquired
by the Company with its
parent or subsidiaries, or by
its subsidiaries in which it
directly or indirectly holds
100 percent of the issued
shares or authorized capital.
Article 11 Procedure for the	Article 11 Procedure for the	1. To include acquiring
Respective Results of	Respective Results of	real property
Evaluations Are Less Than	Evaluations Are Less Than	right-of-use assets
the Transaction Price with	the Transaction Price with	from a related party in
Related Parties	Related Parties	accordance with
Where the Company acquires	Where the Company acquires	Article 17 and Article

After amendment	Before amendment	Reason for amendment
the real property or	the real estate from the	18 of the Regulations.
right-of-use assets thereof	related party and the results	2.T ₀ amend the
from a related party and the	of appraisals conducted in	wording.
οf appraisals results	accordance with Article 10
conducted in accordance with	are uniformly lower than the
Article 10 are uniformly	transaction price, the
lower than the transaction	following steps shall be
price, the following steps	taken:
shall be taken:	1.A special reserve shall be
1.A special reserve shall be	set aside in accordance with
set aside in accordance with	Paragraph 1 of Article 41 of
Paragraph 1 of Article 41 of	Securities the and
Securities the and	Exchange Act against the
Exchange Act against the	difference between the real
difference between the real	property transaction price
property or right-of-use	and the appraised cost, and
assets thereof transaction	may not be distributed or
price and the appraised	used for capital increase or
cost, and may not be	issuance of bonus shares.
distributed or used for	Where the Company uses
capital increase or issuance	equity method the to
of bonus shares. Where the	account for its investment
Company uses the equity	in another company, then
method to account for its	the special reserve called
in another investment	under Article for 41,
company, then the special	Paragraph of the 1
reserve called for under	Securities and Exchange
Article 41, Paragraph 1 of	Act shall be set aside pro
Securities the and	in proportion rata a
Exchange Act shall be set	consistent with the share of
aside pro rata in a	the Company's equity stake
proportion consistent with	in the other company.
the share of the Company's	2. Independent directors of
equity stake in the other company.	committee audit shall
	comply with Article 218 of
2. Independent directors of audit committee shall	the Company Act.
	3. Actions taken pursuant to
comply with Article 218 of the Company Act.	Subparagraph 1 and
	Subparagraph 2 shall be
3. Actions taken pursuant to	reported to a shareholders
preceding the two shall be	meeting, and the details of the transaction shall be
subparagraphs
reported to a shareholders	disclosed in the annual

After amendment	Before amendment	Reason for amendment
meeting, and the details of	report and any investment
the transaction shall be	prospectus.
disclosed in the annual	The Company that has set
report and any investment	aside a special reserve under
prospectus.	the preceding paragraph may
The Company that has set	not utilize the special reserve
aside a special reserve under	until it has recognized a loss
the preceding paragraph may	on decline in market value of
not utilize the special reserve	the assets it purchased at a
until it has recognized a loss	premium, or the assets have
on decline in market value of	been disposed of, or adequate
the assets it purchased or	compensation has been
leased at a premium, or they	made, or the status quo ante
have been disposed of, or the	has been restored, or there is
leasing contract has been	other evidence confirming
terminated, or adequate	nothing that there was
compensation has been	about the unreasonable
made, or the status quo ante	transaction, and the FSC has
has been restored, or there is	given its consent.
other evidence confirming	When the Company acquires
nothing there that was	real estate from a related
unreasonable about the	party, it shall also comply
transaction, and the FSC has	with the preceding two
given its consent.	paragraphs if there is other
When the Company acquires	evidence indicating that the
real property or right-of-use	acquisition was a
assets thereof from a related	non-arm's-length transaction.
party, it shall also comply with	Where the following
the preceding two paragraphs if there is other	circumstances exist,
evidence indicating that the	objective evidence has been
acquisition was a	submitted and concrete
non-arm's-length transaction.	opinions on reasonableness have been obtained from a
Where the following	professional real property
exist, circumstances	appraiser and a CPA, this
objective evidence has been	restriction shall not apply:
submitted and concrete	1. Where the related party
opinions on reasonableness	acquired undeveloped land
have been obtained from a	leased land for or
professional real property	development, it may submit
appraiser and a CPA, the	proof of compliance with
preceding three paragraphs	of the following one
shall not apply:

After amendment	Before amendment	Reason for amendment
1. Where the related party	conditions:
acquired undeveloped land	(1)Where undeveloped
leased land for or	land is appraised in
development, it may submit	accordance with the
proof of compliance with	methods the in
one of the following	preceding Article, and
conditions:	structures according to
$(1)$ Where undeveloped	related party's the
land is appraised in	construction cost plus
accordance with the	reasonable construction
methods the $\mathbf{m}$	profit are valued in
preceding Article, and	excess of the actual
structures according to	transaction price. The
related party's the	"Reasonable
construction cost plus	construction profit"
reasonable construction	shall be deemed the
profit are valued in	average gross operating
excess of the actual	profit margin of the
transaction price. The	related party's
"Reasonable"	division construction
construction profit"	over the most recent 3
shall be deemed the	years or the gross profit margin for the
average gross operating	construction industry
profit margin of the	for the most recent
related party's division construction	period as announced by
over the most recent 3	the Ministry of Finance,
years or the gross profit	whichever is lower.
margin for the	(2) Completed transactions
construction industry	by unrelated parties
for the most recent	within the preceding
period as announced by	year involving other
the Ministry of Finance,	floors of the same
whichever is lower.	property or neighboring
(2) Completed transactions	closely valued or
by unrelated parties	parcels of land, where
within the preceding	the land and area
year involving other	transaction terms are
floors of the same	similar after calculation
property or neighboring	of reasonable price
closely valued or	discrepancies in floor or
parcels of land, where	area land prices in
land the and area	accordance with

$\overline{a}$

After amendment	Before amendment	Reason for amendment
transaction terms are	standard property
similar after calculation	market practices.
of reasonable price	(3)Completed leasing
discrepancies in floor or	transactions by
area land prices in	unrelated parties for
accordance with	other floors of the same
standard property	property from within
market sale or leasing	the preceding year,
practices.	where the transaction
2. Where the Company	terms are similar after
acquiring real property, or	calculation _of
obtaining real property	reasonable price
right-of-use assets through	discrepancies among
leasing, from a related party	floors in accordance
provides evidence that the terms of the transaction are	with standard property market leasing the second
similar to the terms of	practices.
completed transactions
involving neighboring or	2. Where the Company
closely valued parcels of	acquiring real property from a related party
land of a similar size by	provides evidence that the
unrelated parties within the	terms of the transaction are
preceding year.	similar to the terms of
Completed transactions	transactions completed for
involving neighboring or	the acquisition _of
closely valued parcels of land	neighboring or closely
in the preceding paragraph in	valued parcels of land of a
principle refers to parcels on	similar size by unrelated
the same or an adjacent block	parties within the preceding
and within a distance of no	year.
more than 500 meters or	Completed transactions for
parcels close in publicly	neighboring or closely valued
value; announced current	parcels of land in the
transactions involving	preceding paragraph in
similarly sized parcels in principle refers to	principle refers to parcels on
transactions completed by	the same or an adjacent block
unrelated parties for parcels	and within a distance of no more than 500 meters or
with a land area of no less	parcels close in publicly
than 50 percent of the	announced current value;
in the planned property	transaction for similarly sized
within transaction; the	parcels in principle refers to
preceding year refers to the	transactions completed by

After amendment	Before amendment	Reason for amendment
year preceding the date of	unrelated parties for parcels
occurrence of the acquisition	with a land area of no less
of the real property or	50 $\circ$ than percent the
the obtainment of	the in planned property
right-of-use assets thereof.	within the transaction;
	preceding year refers to the
	year preceding the date of
	occurrence of the acquisition
	of the real property.
Article 12 Mergers and	Article 12 Mergers and	To amend the wording
Consolidations, Splits,	Consolidations, Splits,	in order to distinguish
Acquisitions, and	Acquisitions, and	Company from the
Assignment of Shares	Assignment of Shares	other companies
The Company that conducts	The Company that conducts	participating in a
demerger, merger, a	merger, demerger, a	merger, demerger,
acquisition, or transfer of	acquisition, or transfer of	acquisition or transfer of
shares, prior to convening the	shares, prior to convening the	shares.
audit committee and board of	audit committee and board of
directors to resolve on the	directors discussing the
matter, shall engage a CPA,	Mergers and acquisitions,
securities attorney, $or$	shall engage a CPA, attorney,
underwriter provide to	securities underwriter or
opinions the on	other independent experts to
reasonableness of the share	provide opinions the on
exchange ratio, acquisition	reasonableness of the share
price, or distribution of cash $\vert$ other or -	exchange ratio, acquisition property to price, or distribution of cash
shareholders, and submit the	other property or to
opinions to audit committee	shareholders, and submit the
for approval and submit to	opinions to audit committee
the board of directors for	for approval and submit to
deliberation and passage.	the board of directors for
However, the requirement of	deliberation and passage. In
aforesaid obtaining an	the event the Company
opinion on reasonableness	merge with its subsidiary
issued by an expert may be	company whose one hundred
exempted in the case of a	percent of the total issued
merger by the Company of a	shares or total capital is held
subsidiary in which it directly	directly or indirectly by the
or indirectly holds 100	Company or that subsidiary
percent of the issued shares	company merge with one
or authorized capital, and in	another whose one hundred
the case of a merger between	percent of the total issued

After amendment	Before amendment	Reason for amendment
subsidiaries in which the	shares or total capital is held
directly Company or	directly or indirectly by the
indirectly holds 100 percent	Company, the Company may
of the respective subsidiaries'	from be the exempt
issued shares or authorized	preceding experts opinions
capital .	on the reasonableness.
The Company participating	The Company participating
in a merger, demerger or	in a merger, demerger or
acquisition shall prepare a	acquisition shall prepare a
public report to shareholders	public report to shareholders
detailing important	detailing important
contractual content, matters	contractual content, matters
the relevant to merger,	the relevant $\bullet$ to merger,
demerger, or acquisition, and	demerger, or acquisition, and
the expert opinions of the	the expert opinions of the
preceding paragraph and the	preceding paragraph and the
outcome of audit committee	outcome of audit committee
prior to the shareholders meeting when sending	prior to the shareholders meeting when sending
shareholders notification of	shareholders notification of
the shareholders meeting for	the shareholders meeting for
reference in deciding whether	reference in deciding whether
the approve merger, to	approve the to merger,
demerger, or acquisition.	demerger, or acquisition.
Provided, where a provision	Provided, where a provision
of another act exempts the	of another act exempts the
	Company from convening $a \mid$ Company from convening a
shareholders meeting to shareholders meeting	to
the approve merger,	approve the merger,
demerger, or acquisition, this	demerger, or acquisition, this
restriction shall not apply.	restriction shall not apply.
the shareholders Where	Where the shareholders
meeting of any one of the	meeting of any one of the
companies participating in a	companies participating in a
merger, demerger, or	merger, demerger, or
acquisition fails to convene	acquisition fails to convene
or pass a resolution due to	or pass a resolution due to
lack of a quorum, insufficient	lack of a quorum, insufficient
votes, or other legal	votes, other or legal
restriction, or the proposal is rejected by the shareholders	restriction, or the proposal is rejected by the shareholders
meeting, the Company shall	meeting, the Company shall
publicly explain the reason,	publicly explain the reason,

$\bar{\beta}$

After amendment	Before amendment	Reason for amendment
the follow-up measures, and	the follow-up measures, and
the preliminary date of the	the preliminary date of the
next shareholders meeting	next shareholders meeting
without delay.	without delay.
The companies participating	Unless otherwise provided by
in a merger, demerger or	another act or granted in
acquisition shall convene a	advance by the FSC for
board of directors meeting	extraordinary circumstances,
and shareholders meeting on	the companies participating
the day of the transaction to	in any merger, demerger or
resolve matters relevant to	acquisition shall convene a
the merger, demerger, or	board of directors meeting
acquisition, unless another	and shareholders meeting on
act provides otherwise or the	the day of the transaction to
FSC is notified in advance of	resolve matters relevant to
extraordinary circumstances	the merger, demerger, or
and grants consent.	acquisition.
The companies participating	Unless otherwise provided by
in a transfer of shares shall	another act or granted in
convene a board of directors	advance by the FSC for
meeting on the day of the	extraordinary circumstances,
transaction, unless another	the companies participating
act provides otherwise or the	in a transfer of shares shall
FSC is notified in advance of	convene a board of directors
extraordinary circumstances	meeting and shareholders
and grants consent.	meeting on the day of the
When participating in a	transaction.
demerger, merger,	When participating in a a
acquisition, or transfer of	merger, demerger,
shares, the Company shall	acquisition, or transfer of
prepare a full written record	shares, a company that is
of the following information	listed on an exchange or has
and retain it for five years for	its shares traded on an OTC
reference:	market shall prepare a full
1. Basic identification data for	record written _of the and
personnel: Including the	following information retain it for five years for
occupational titles, names,	reference:
and national ID numbers
(or passport numbers in	1. Basic identification data for
case of foreign nationals) of	personnel: Including the job
all persons involved in the planning or implementation	titles, names, and national ID numbers (or passport

After amendment	Before amendment	Reason for amendment
of any merger, demerger,	numbers in case of foreign
acquisition, or transfer of	nationals) of all persons
another company's shares	involved in the planning or
prior to disclosure of the	implementation $\circ$ f any
information.	merger, demerger,
2. Dates of material events:	acquisition, or transfer of
Including the signing of	shares prior to disclosure of
any letter of intent or	the information.
of memorandum	2. Dates of material events:
understanding, the hiring of	Including the signing of
a financial or legal advisor,	any letter of intent or
the execution of a contract,	_of memorandum
and the convening of a	understanding, the hiring of
board of directors meeting.	a financial or legal advisor,
3. Important documents and	the execution of a contract,
Including minutes:	and the convening of a
demergers, mergers,	board of directors meeting.
acquisitions, and share	3. Important documents and
transfer plans, any letter of	minutes: Including plans
intent or memorandum of	for mergers, demergers,
understanding, material	acquisitions, and transfer of
contracts, and minutes of	shares, any letter of intent
board of directors meetings.	memorandum of _or
When participating in _a	understanding, material
demerger, merger,	contracts, and minutes of
acquisition, or transfer of	board of directors meeting.
another company's shares, When participating in a the Company shall,	two $\vert$ merger, demerger,
	hours before the beginning of acquisition, or transfer of
trading hours on the next shares, $\underline{a}$ company that is
business day following the listed on an exchange or has
date of passage of a its shares traded on an OTC
resolution by the board of $\frac{market}{market}$ shall, two	hours
	directors, report (in the before the beginning of
prescribed format and via the	trading hours on the next
Internet-based information	business day following the
system) the information set	date of passage of a
out in Subparagraphs 1 and 2	resolution by the board of
of the preceding paragraph to	directors, submit the
the FSC for recordation.	information required in
	Where any of the companies Subparagraphs 1 and 2 of the
participating in a merger, preceding paragraph to the
demerger, acquisition,	or FSC for recordation. The

After amendment	Before amendment	Reason for amendment
of transfer another	information shall be
company's shares is neither	disclosed in the prescribed
listed on an exchange nor has	format and via the
its shares traded on an OTC	Internet-based information
market, the Company shall	system.
sign an agreement with such	Where any of the companies
companies accordance in	participating in a merger,
with the preceding two	acquisition, demerger, or
paragraphs .	transfer of shares is neither
(Paragraph 9 to Paragraph 13)	listed on an exchange nor has
Omitted)	its shares traded on an OTC
	market, the Company shall
	sign an agreement with such
	companies in accordance
	with the provisions of
	Paragraphs 6 and 7.
	(Paragraph 9 to Paragraph 13)
	Omitted)
Article 13 Penal Provisions	Article 13 Penal Provisions	The Chinese wording
The personnel responsible for	The personnel responsible for	"the relevant personnel
acquisition or disposal of	acquisition or disposal of	management
assets violates the Procedures	assets violates the Procedures	regulations" is amended
shall be penalized according	shall be penalized according	while the English
to the relevant personnel	to the relevant personnel	wording remains
management regulations of	management regulations of	unchanged.
the Company.	the Company.

CENTRAL REINSURANCE CORPORATION ARTICLES OF INCORPORATION

Chapter 1 GENERAL PROVISIONS

Article 1

This Company is incorporated pursuant to the provisions governing a company limited by Shares of the Company Law of Republic of China with the name of 中央再保險股份有限公司 in Chinese and CENTRAL REINSURANCE CORPORATION in English.

Article 2

The Company may engage in the activity of H501031 Reinsurance Business.

Article 3

The office of the Company is located in Taipei, Taiwan, where necessary, the Company may have branches or offices established within or outside the Republic of China as approved by competent authority.

Article 4

The fund management and investment of the Company, in compliance with Insurance Law and related regulations, shall not be subject to the restriction of not exceeding 40 percent of the paid-up capital of the Company pursuant to Article 13 of the Company Law.

Chapter 2 SHARES

Article 5

The total authorized capital of the Company shall be NT\$6,000,000,000 divided into 600,000,000 shares at NT\$10 each. The Board of Directors is hereby authorized to issue the unissued shares in installments.

Article 6

The shares issued by the Company may be paperless and must be registered in the Securities Central Depositary Business Institution.

Article 7

Registration of share transfer, within sixty (60) days before the date of Annual General Meeting of the Shareholders, thirty (30) days before the date of Extraordinary Meeting of Shareholders, or five (5) days before the date fixed by the Company for distribution of dividends, bonus or other benefits, shall not be conducted.

Chapter 3 SHAREHOLDERS' MEETING

Article 8

The Shareholders' Meeting of the Company consists of two categories; the Annual General and Extraordinary Meetings;

The Annual General Meeting shall be duly held within $six(6)$ months after the end of each fiscal year of the Company;
$-$ The Extraordinary Meeting of the Company may be duly held if necessary.

Article 9

Notices to convene the Annual General Meeting shall be given to each shareholder thirty (30) days in advance, and the one to convene the Extraordinary Meeting shall be given fifteen (15) days in advance. Notices of the Shareholders' Meeting shall specify the time and place of the meeting and the particulars of the business to be transacted, and shall be given to all the Shareholders.

Article 10

A shareholder who is unable to attend a Shareholders' Meeting may appoint a proxy to attend and vote on his behalf pursuant to a power of attorney printed and distributed by the Company duly issued by the Shareholder stating the ambit of the proxy's authority.

Article 11

Unless otherwise provided under the Company Law and related regulations, the quorum for a Shareholders' Meeting shall be duly adopted by a majority in the meeting attended by Shareholders who represent a majority of the total issued shares.

Article 12

The shareholders of the Company shall have one voting right for each share, unless otherwise regulated under the relevant laws and regulations.

Article 13

When Shareholders' Meeting is convened by the Board of Directors, its chairman shall be processed in accordance with the provisions in Article 208 of the Company Law.

When the meeting is convened by other party with right of summons other than the Board of Directors, the Chairman shall be undertaken by that party with right of summons. When there are two or more parties with right of summons, one party will be elected from these parties.

Article 14

The resolutions adopted by the Shareholders' Meeting shall be reported in the minutes. The content, distribution and other essentials of the minutes shall be made in accordance with the provision of Article 183 of the Company Law.

Chapter 4 DIRECTORS AND MANAGERS

Article 15

The Company shall have seven to nine $(7-9)$ Directors.

The election of the Directors shall adopt the candidate nomination system provided in the Article 192-1 of the Company Law. The shareholders shall elect the Directors from the list of candidates announced by the Company. The related matters shall be processed according to the relevant regulations.

The total number of shares that should be held by all Directors of the first paragraph shall be subject to the provision established by the Securities Management Institution.

Article 16

The Directors shall be elected at the Shareholders' Meeting from competent persons in accordance with law provisions. They shall have a three-year term of office and are eligible for re-election. The Directors may, according to Article 199 of the Company Law, be discharged at any time by a resolution passed at a Shareholders' Meeting.

Article 17

There should be three (3) Independent Directors of the total number of directors as stipulated in Article 15.

Independent and non-independent directors shall be elected at the same time with respective eligible numbers.

The professional qualifications, restrictions on shareholdings and concurrent positions held, assessment of independence, method of nomination and election and any other matters as required with respect to independent directors shall be in compliance with Securities and Exchange Act and the related regulations.

Article 18

The Directors shall constitute the Board. The Chairman shall be elected at a meeting attended by at least two thirds $(2/3)$ or more of the entire Directors and by a simple majority vote of the Directors present at the meeting and may also elect a Vice Chairman in the same manner.

The Chairman of the Board of Directors shall internally preside at the Meetings

of Shareholders and Meetings of the Board of Directors, and shall externally represent the Company. When the Chairman is on leave of absence or cannot exercise its job for any cause, agency of his/her job shall be handled in accordance with Article 208 of the Company Law.

Article 19

When the number of vacancies in the Board of Directors equals to one third (1/3) of the total number of Directors, the Board of Directors shall convene an Extraordinary Shareholders' Meeting for election of supplementary Directors within sixty (60) days of such occurrence in accordance with the laws. The term of office of the supplementary Directors shall be limited to make up the original term of office.

When an independent director is discharged for any reason, resulting in a shortage of number of directors required under paragraph 1 of Article 17, a by-election for independent director shall be held at the next following shareholders' meeting. When all independent directors have been discharged, the Board of Directors shall convene a shareholders' meeting for by-election within sixty $(60)$ days of such occurrence.

Article 20

For execution of business of the Company, apart from items that are separately specified in related laws or the Articles of Incorporation to be resolved at the Shareholders' Meeting, all items shall be resolved by the Board of Directors.

Article 21

The Company shall establish an audit committee according to Article 14-4 of the Securities and Exchange Act. The exercise of Audit Committee and its members' duties and authorizations and matters relating thereto, shall be in compliance with Securities and Exchange Act and the related regulations.

Article 22

The meeting of the Board of Directors of the Company shall be informed to each Director with a notice stating matters to be discussed seven (7) days prior to convening such meeting. Nevertheless, in case of emergency, the said meeting may be convened immediately.

The notice set forth in the preceding paragraph may be served in the form of written document, e-mail or fax.

The meeting of the Board of Directors shall be attended by the Directors personally. Where a Director is unable to attend a meeting, he or she may authorize another Director to attend on his or her behalf by issuing a power of attorney specifying the notified matters and the ambit of the authorization. Each Director shall only accept one proxy.

Unless otherwise provided under the related regulations or this Articles of Incorporation, resolutions of the Board of Directors shall be adopted by the approval of a majority of the Directors in a meeting attended by a majority of all the Directors.

A meeting of the Board of Directors may be conducted through video conference, and the Directors who participate in video shall be deemed to have attended the meeting in person.

Article 23

The remuneration of the Directors is authorized to be resolved by the Board of the Directors according to their level of participation of the Company's operation and their value of contribution as well as the normal standard of the industry.

Article 24

The Company may take out liability insurance for all Directors during their terms of offices to cover their legal liability for damages arising from their performance of duties.

The Company may also indemnify within a certain amount to Director(s), who is (are) liable to pay compensation or legal expense, except for those caused by their intentional or gross negligence acts or by a suit brought in accordance with a resolution of the Shareholders' Meeting.

The so-called "a certain amount" in the preceding paragraph is authorized to be resolved by the Board of Directors according to the actual situations.

Article 25

An Audit Division is to be set up under the Board of Directors to perform internal audits with independent and objective spirit, and to report to the Board of Directors on regular basis.

A Chief Auditor shall be appointed to the Audit Division. The appointment, discharge or transfer of the Chief Auditor shall be concurred by more than two thirds $(2/3)$ of the entire directors.

The Audit Division may have one or more auditors. The appointment of auditors shall be proposed by the Chief Auditor and approved by the Chairman of the Board of Directors.

Article 26

The company may appoint managers. Appointment, discharge and the remuneration of the managers shall be made in accordance with the provisions of Article 29 of the Company Law.

Chapter 5 ACCOUNTING

Article 27

Fiscal year of the Company falls between January 1st and December 31st of each year. Before the commencement of each fiscal year, budget and business plan shall be submitted to the Board of Directors Meeting for approval.

Article 28

After the end of each fiscal year of the Company, the Board of Directors shall prepare the following reports and submit in accordance with legal procedures for approval by the shareholders at the Annual General Meeting:

$-$ Business report.
$-$ Financial statements.
$-$ Proposal for profit distribution or loss restitution.

Article 29

Minimum 0.5% of profit of the current year distributable as employees' compensation and not exceed 1% of profit of the current year distributable as remuneration of Directors shall be distributed when the Company have profit. However, the Company's accumulated losses shall have been covered before distributing employees' compensation and remuneration of Directors by the aforementioned principles.

Employees' compensation may be distributed in the form of shares or in cash; Remuneration of Directors shall be distributed in the form of cash only.

The profit set out in the first Paragraph is meaning thereto income before income tax of the current year including the profit of employees' compensation and remuneration of Directors.

The amount of payment of the employees' compensation and the remuneration of Directors and the distribution manner of the employees' compensation shall be adopted by a majority vote at a meeting of the Board of Directors attended by two-third of the total number of directors and then to be reported to the shareholders meeting.

Article 29-1

Any profit made by the Company for each fiscal year shall, after deduction of

tax, be applied firstly towards making up any losses incurred by the Company in the previous years, secondly retaining twenty (20) percent of the balance thereof as legal reserve, then setting aside or release special reserve in accordance with regulations and adding previous retained earnings for the Board of Directors to make surplus profit proposal for distribution for resolution by the Shareholders' Meeting.

Shareholders' dividend may be distributed in cash dividend and stock dividend, with the cash dividend not less than fifty (50) percent of the total amount of distribution.

Chapter 6 MISCELLANEOUS

Article 30

The Company may set up executing units in accordance with business needs where their rule and regulation shall be separately stipulated.

The Board of Directors may set up functional committees in accordance with regulations or business needs. Their Charters shall be made by the Board of Directors.

Article 31

Any matter not provided for by this Articles of Incorporation shall be subject to the Company Law and related regulations.

Article 32

Various operation procedures of the Company shall be separately stipulated by the President where substantial rule and regulation shall be reported to the Board of Directors for approval.

Article 33

This Articles of Incorporation entered into force from the date resolved by the Shareholders' Meeting and the same procedure shall apply when it is revised. The history is as follow:

(1) These Articles were originally established on October 26, 1967.
(2) The 1st to the 23rd amendments were made between January 18, 1972 and October 26, 2005.
(3) The 24th amendment was made on June 15, 2007.
(4) The 25th amendment was made on June 13, 2008.
(5) The 26th amendment was made on June 18, 2010.
(6) The 27th amendment was made on June 15, 2012.
(7) The 28th amendment was made on June 13, 2013.

(8) The 29th amendment was made on June 11, 2014.

(9) The 30th amendment was made on May 27, 2016.

$\bar{\epsilon}$

$\cdot$

CENTRAL REINSURANCE CORPORATION RULES FOR PROCEDURE OF THE SHAREHOLDERS' MEETING

Article 1

The shareholders' meetings of Central Reinsurance Corporation (hereinafter referred to as "the Company") shall be conducted pursuant to these Rules.

For matters not prescribed in these Rules, except where explicitly prescribed by Company Law, the Company's Articles of Incorporation, and other laws and regulations, the chairman shall decide such matters.

Article 2

The attending shareholders or shareholders attending through proxies (hereinafter referred to as "the Shareholders") shall hand over check-in cards in lieu of signing in.

The number of shares for attending the meeting shall be counted according to the delivered check-in cards.

Where an institutional shareholder is delegated to attend the shareholders' meeting, such institutional shareholder shall only appoint one (1) representative to attend the meeting.

Article 3

Quorum and votes of shareholders' meeting shall be counted on the basis of number of shares.

Article 4

Venue of the shareholders' meeting shall be at the place where the Company is located or at any other place where it is convenient for the Shareholders to attend and is suitable for the meeting to be conducted. The meeting shall commence not earlier than $09:00$ A.M. or not later than $03:00$ P.M.

Article 5

Except where prescribed by laws and regulations, the Board of Directors shall convene shareholders' meetings.

All Shareholders shall be notified thirty (30) days in advance of an annual general shareholders' meeting. All Shareholders shall be notified fifteen (15) days in advance of an extraordinary shareholders' meeting.

Those Shareholders who hold less than 1,000 shares of stock may be notified by means of posting a public announcement on the Market Observation Post System of Taiwan Stock Exchange Corporation.

The subject matters of the meeting shall be explicitly stated in notices and the public announcement. When permitted by the recipients, notification may be done through electronic means.

Article 6

The Shareholders holding at least one percent $(1\%)$ of the total number of issued shares of the Company may submit written proposal for discussion in an annual general shareholders' meeting to the Company.

Before the closure of transferring stocks of an annual general shareholders' meeting, the Company shall publicly announce its readiness for acceptance of Shareholders' proposals, its place of acceptance and period of acceptance. The period of acceptance may not be shorter than ten (10) days.

The Shareholders' proposal shall be included in the agenda and stated in the subject of the notification when none of the following circumstances as reviewed by the Board applies:

1. The proposal is not a matter that may be resolved by shareholders' meeting.
1. The proposing Shareholder holds less than one percent (1%) of issued shares at the time of closure of transferring stocks prior to the shareholders' meeting.
1. The proposal was not submitted during the acceptance period publicly announced in the forgoing paragraph.
1. The proposing Shareholder has submitted more than one (1) proposal, or the proposal exceeds three hundred (300) words (including punctuations), or the proposal was not submitted in writing.

The Company shall notify the Shareholders who submitted proposals of the result of processing the proposal prior to the notification of the shareholders' meeting. With regard to the Shareholders' proposals not included in the meeting agenda, the Board shall state in the meeting handbook of the reason why such proposal was not included; No additional agenda will be included and there will not be any reference in the meeting minutes.

If the Shareholders' proposals included in the meeting agenda according to the Paragraph 3 are similar proposals or are similar to the proposal of the Board of Directors, the chairman shall group the proposals and apply Article 25 of these Rules.

Article 7

The Shareholders who cannot attend a shareholders' meeting in person may issue a proxy printed by the Company stating ambit of authorization to a designated person to attend.

The Shareholders attend a shareholders meeting by proxy shall conduct pursuant to the Company Law and relevant regulations.

Article 8

A meeting handbook shall be prepared when a shareholders' meeting is convened. The meeting handbook and other relevant information concerning the meeting shall be publicly announced.

Time and manner of the public announcement of the preceding paragraph, main provisions of the meeting handbook and other compliance requirements should be processed in accordance with the Regulations Governing Content and Compliance Requirements for Shareholders' Meeting Agenda Handbooks of Public Companies.

Article 9

Chairman of the Board shall serve as chairman of a shareholders' meeting convened by the Board. If the Chairman has taken leave or cannot act for any reason, the Vice Chairman shall act in his stead. If the Chairman and Vice Chairman have both taken leave or cannot act for any reason, the Chairman shall designate one director to act on his behalf. If the Chairman has not designated any director to act as chairman, the directors shall elect one from themselves to serve as the meeting chairman.

When a shareholders' meeting has been convened by a person with convening powers other than the Board, the convener shall serve as the chairman. If there are two or more conveners, they shall elect one from themselves to serve as the chairman.

Article 10

The Company may designate commissioned lawyers, certified public accountants, or other relevant personnel to present the shareholders' meeting in a non-voting capacity.

Article 11

The Company shall make an audio or video recording of the entire proceedings of the shareholders' meeting, and shall preserve the recording for at least one (1) year.

The staffs relating to the affairs of the meeting (including security personnel) shall wear identification tags or badges.

Article 12

Chairman of the meeting shall declare the meeting open when it's time for meeting. However, chairman of the meeting may declare postponement of the meeting provided that the Shareholders represent not more than half of total number of issued shares, but such postponements are limited to twice and the total postponement time shall not be more than one (1) hour. If twice postponements cannot still constitute a majority, but the Shareholders represent over one third of the total number of issued shares, a tentative resolution may be passed by a majority of those present pursuant to the Paragraph 1 of the Article 175 of the Company Law.

If the Shareholders have been up to more than half of total number of issued shares before the conclusion of that meeting, the chairman may make the proposition to resolve such tentative resolution by vote pursuant to Article 174 of the Company Law.

Article 13

Where a shareholders' meeting is convened by the Board of Directors, its agenda shall be arranged by the Board of Directors. Moreover, the meeting shall proceed on the basis of arranged agenda and cannot be changed without the resolution at the shareholders' meeting.

Where a shareholders' meeting is called by a convener who is entitled to call such meeting other than the Board of Directors, the preceding Paragraph shall be mutatis mutandis applicable.

Unless it has been duly resolved, chairman of the meeting shall not declare the meeting adjourned at discretion before the agenda as set forth in the preceding two Paragraphs (including motions) have been concluded.

After the meeting is over, the Shareholders shall not elect another chairman to preside to continue the meeting at the same place or any other place. However, if the chairman announces adjournment in violation of the Rules, then based on the consent of more than half of the voting rights of attending Shareholders one person shall be elected as the chairman to continue the meeting.

Article 14

Any Shareholder shall, before speaking at the meeting, present a speaking memo stating summary, shareholder A/C number (or attendance certificate number) and A/C name. Speaking sequence shall be arranged by the chairman of the meeting.

In the event that a Shareholder only presents a speaking memo, but he/she doesn't speak at the meeting, it shall be deemed that he/she speaks nothing at the meeting. If the speaking contents are not same as those indicated on the speaking memo, only the former shall be considered.

When a Shareholder is speaking, other Shareholders may not interfere by speaking unless being authorized by chairman or the Shareholder who is speaking. Chairman shall stop such violation.

Article 15

An attending Shareholder may question about report items on the agenda only after the chairman or person designated by the chairman has read or reported all report items. Each Shareholder may speak once concerning all report items and each instance may not exceed five (5) minutes.

When an attending Shareholder speaks with regard to the matters for recognition and discussion listed on the agenda, and to the motions made in the extraordinary motion session, each Shareholder shall speak no more than twice concerning each motion and each proposition and not exceeding five (5) minutes each time without obtaining the consent of the chairman.

Where a Shareholder speaks over the prescribed time limit or exceeds the bounds of the issue at hand, the chairman is entitled to stop such speaking. The chairman may direct disciplinary personnel (or security personnel) to take necessary measures to maintain order in the meeting place or ensure the smooth progress of the meeting if a speaker still refuses to stop talking or other interfering circumstances occur.

Article 16

When government or an institutional shareholder sends two or more representatives to attend a shareholders' meeting, only one person may speak on each proposition.

Article 17

After an attending Shareholder has spoken, the chairman may personally respond, or designate another relevant person to do so.

Article 18

The chairman may announce an intermission at an appropriate time during a shareholders' meeting.

Article 19

The chairman may announce an end of discussion and put the proposition to a vote when the chairman considers it has reached the extent for making a resolution.

Article 20

Except where prescribed by laws and regulations or the Articles of Incorporation of the Company, a Shareholder shall have one voting right for each share.

Article 21

Except where prescribed by laws and regulations or the Articles of Incorporation of the Company, a resolution shall be adopted by a majority vote by attending Shareholders.

When a proposition is to be resolved, it may be passed by applause after the chairman finds that there is no objection; its effectiveness shall be same as resolved by voting. When any Shareholder expresses objection, the resolution shall be decided by voting.

Article 22

When a proposition is put to a vote, the chairman shall direct two (2) ballot supervising personnel and several ballot counting personnel to perform duties. However, such ballot supervising personnel must be a Shareholder of the Company.

The result of voting shall be reported on the spot and recorded. Ballot supervising personnel shall seal the ballots, and shall turn them over to the Company for preservation after signing or affixing their seals on them.

Article 23

A ballot shall be deemed invalid when all ballot supervising personnel concur that one of the following situations applies:

1. The ballot used was not prepared by the Board.
1. A blank ballot has been placed in the ballot box.
1. The ballot is illegible due to damage or indistinct writing.
1. The ballot has been altered or bears extraneous written text or symbols.
1. Both consent and oppose have been marked.

Article 24

If a Shareholder disputes any matters such as the voting process, the ballot counting

method or the validity of ballots, the ballot supervising personnel shall state the Shareholder's account number, the number of voting rights, and the subject of the dispute, then sign or seal for preservation.

Article 25

If there shall be an amendment or alternative to one proposition, the chairman may combine the amendment or alternative into the original proposition and determine their orders for resolution. If one of the above shall be resolved, the others shall be considered as rejected, upon which no further resolution shall be required.

Article 26

The deliberation conducted at a shareholders' meeting shall be recorded in the meeting minutes. The contents and distribution of minutes shall be in accordance with Article 183 of the Company Law and the minutes of shareholders' meetings must be preserved as long as the Company is in existence.

Article 27

The chairman may ask disciplinary or security personnel to help maintain order at a meeting.

Article 28

The Rules shall take effect after been passed by the shareholders' meeting and the same procedure shall apply when they are revised.

Article 29

The Rules were duly established on February 20, 1998;

The 1st amendment was made on September 29, 1998;

The 2nd amendment was made on October 24, 2000;

The 3rd amendment was made on June 25, 2002;

The 4th amendment was made on June 9, 2006;

The 5th amendment was made on June 13, 2008;

The 6th amendment was made on June 15, 2011;

The 7th amendment was made on June 15, 2012.

CENTRAL REINSURANCE CORPORATION

Procedures for Acquiring and Disposing of Assets

Accordance Article 1

The Procedures is set forth in accordance with the provisions of Paragraph 1 of Article 6 of the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies".

The Scope of Assets Article 2

The term "assets" as used in the Procedures includes the following:

1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities.
1. Real property (including land, houses and buildings, investment property, and rights to use land) and equipment.
1. Memberships.
1. Patents, copyrights, trademarks, franchise rights, and other intangible assets.
1. Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables).
1. Derivatives.
1. Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with law.
1. Other major assets.

Acquisition and disposal of derivatives shall be in compliance with "Procedures for Transaction of Financial Derivatives" of the Company.

Definitions Article 3

Terms used in the Procedures are defined as below:

Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law: Refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts, or to transfer of shares from another company through issuance of new shares of its own as the consideration therefor (hereinafter "transfer of shares") under Article 156, Paragraph 8 of the "Company Act".
1. Related party or subsidiary: As defined in the "Regulations Governing Preparation" of Financial and Operational Reports by Insurance Institutions".
1. Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment.
1. Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply.
1. Mainland China area investment: Refers to investments in the mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area.
1. Total assets: Refers to the total assets stated in the most recent Company's financial report prepared under the "Regulations Governing Preparation of Financial and Operational Reports by Insurance Institutions".

Operating Procedures Article 4

1. The degree of authority delegated and the levels to which authority is delegated: shall be executed in accordance with the Company's table of governing the delegation of authority and responsibility.
1. Execution Unit and transaction process:
(1) With respect to the acquisition or disposal of securities, the execution unit shall analyze and forecast the future outlook based on the market condition, so as to formulate trading terms and get the approval of Authorized level in accordance with the Company's table governing the delegation of authority and responsibility.

Acquisition and disposal of securities shall be in compliance with "Procedures" for Governing Various Applications of Funds" of the Company.

(2) With respect to the acquisition or disposal of real property, the execution unit shall formulate trading terms and get the approval of the Chairman and audit committee and submit a proposal for discussion by the board of directors. But for the reason of timeliness, the transactions can be executed in respect of the approval of Chairman and subsequently have the decisions submitted to and ratified by audit committee and the board of directors.
(3) With respect to the acquisition or disposal of equipment and other assets, the execution unit shall conduct analysis and appraisal of the transaction, and formulate trading terms and get approval in accordance with the Company's table governing the delegation of authority and responsibility.

Appraisal Procedures Article 5

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The acquisition or disposal of real property or equipment where the transaction amount reaches 20 percent of the Company's paid-in capital or NT\$300 million or more, the Company, unless transacting with a government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of business equipment, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions:

1. Under special circumstances it is necessary to take a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be approved by audit committee and submitted to the board of directors for resolution in advance, and the above procedure shall also be followed once the terms and conditions of the transaction are changed in the future.
1. Where the transaction amount is NT\$1 billion or more, appraisals from two or more professional appraisers shall be obtained.
1. Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant (CPA) shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the Accounting Research and Development Foundation of the ROC (hereinafter referred to as "ARDF") and render a concrete opinion regarding the reason for the discrepancy and the appropriateness of the transaction price:
(1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount.
(2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount.
1. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.

The Company acquiring or disposing of securities shall, prior to the date of occurrence of the event, obtain the financial statements of the issuing company for the most recent period, certified or reviewed by a CPA for reference in appraising the transaction price, and if the dollar amount of the transaction is 20 percent of the Company's paid-in capital or NT\$300 million or more, the Company shall additionally engage a CPA prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. If the CPA needs to use the report of an expert as evidence, the CPA shall do so in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. This requirement does not apply, however, to publicly quoted prices of securities that have an active market, or where otherwise provided by the regulations of the Financial Supervisory Commission (hereinafter referred to as "FSC").

Except for transactions with government agencies, the Company acquires or disposes of memberships or intangible assets and the transaction amount reaches 20 percent or more of the Company's paid-in capital or NT\$300 million or more, the Company shall obtain a CPA's opinion on the reasonableness of the transaction price prior to the date of occurrence of the event; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.

The calculation of the transaction amounts of preceding provisions shall be based on Paragraph 2 of Article 6 and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.

Where the Company acquires or disposes of assets through court auction procedures, the certified documentation issued by the court may be substituted for appraisal reports or CPA opinion.

Items and Standards of Public Disclosure Article 6

Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the relevant information on the FSC's designated website in the appropriate format as prescribed by regulations two hours before the beginning of trading hours on the next business day following the date of occurrence of the event:

1. Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20 percent or more of the Company's paid-in capital, 10 percent or more of the Company's total assets, or NT\$300 million or more, except for the trading of government bonds or bonds under repurchase and resale agreements, or subscription or redemption of domestic money market funds issued by the securities investment trust enterprise.
1. Merger, demerger, acquisition, or transfer of shares.
1. Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in "Procedures for Transaction of Financial Derivatives" of the Company.
1. Where the type of asset acquired or disposed of is business equipment/machinery for business use, the trading counterparty is not a related party and the transaction amount reaches one of the following circumstances:
(1) The paid-in capital of the Company is less than NT\$10 billion and the transaction amount reaches NT\$500 million or more.
(2) The paid-in capital of the Company is NT\$10 billion or more and the transaction amount reaches NT\$1 billion or more.
1. Where land is acquired under an arrangement on engaging others to build on the Company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the Company expects to invest in the transaction reaches NT\$500 million or more.
1. Where an asset transaction other than any of those referred to in the preceding five subparagraphs, a disposal of receivables by a financial institution, or an investment in the Mainland China area reaches 20 percent or more of paid-in capital or NT\$300 million; provided, this shall not apply to the following circumstances:
(1) Trading of government bonds.
(2) Securities trading by investment professionals on foreign or domestic securities exchanges or over-the-counter markets or common corporation bond and financial bond that do not involve shareholding rights subscribing on domestic IPO market.
(3) Trading of bonds under repurchase/resale agreements, or subscription or redemption of domestic money market funds issued by the securities investment trust enterprise.

The transaction amount of the preceding paragraph shall be calculated as follows:

1. The amount of any individual transaction.
1. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year.
1. The cumulative transaction amount of real property acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within the preceding year.
1. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year.

"Within the preceding year" as used in Paragraph 2 refers to one year preceding the date of occurrence of the current transaction. Items duly announced in accordance with the Procedures need not be counted toward the transaction amount.

The Company shall compile monthly reports on the status of derivatives transactions engaged in up to the end of the preceding month and file the information in the prescribed format on the information reporting website designated by the FSC by the 10th day of each month.

In the event of the items which are required for public announcement contain error or omission and shall be rectified, all the items shall be again publicly announced and reported in entirety two hours before the beginning of trading hours on the next business day following the date of realizing the event.

Where any of the following circumstances occurs with respect to a transaction that the Company has already publicly announced and reported in accordance with the regulations, a public report of relevant information shall be filed on the website designated by the FSC two hours before the beginning of trading hours on the next business day following the date of occurrence of the event:

1. Amendment, termination, or rescission of a contract signed in regard to the original transaction.
1. The merger, demerger, acquisition, or transfer of shares is not completed before the scheduled date set forth in the contract.
1. The contents of the originally publicly announced and reported information have changed.

The Company acquiring or disposing of assets shall retain all relevant contracts, meeting minutes, memorandum books, appraisal reports and the opinions provided by CPA, attorney, and securities underwriter in the Company headquarters for 5 years at least except where another act provides otherwise.

The Limits of Investment Amount Article 7

The limits of investment amount shall be followed as below:

1. The total investment amount of real property shall be in accordance with the provisions of Article 146-2 of the "Insurance Act".
1. The total investment amount of securities and limits of individual securities shall be in accordance with the provisions of Article 146-1, Article 146-5 and Article 146-6 of the "Insurance Act".
1. The total investment amount of foreign investment shall be in accordance with the provisions of Article 10 of the "Regulations Governing Financial and Business Operations of Professional Reinsurance Enterprises".
The Related Party Shall not be The Providers of Appraisal Reports or Article 8 Professional Opinions

Professional appraisers and their officers, CPA, attorneys, and securities underwriters that provide the Company with appraisal reports, CPA's opinions, attorney's opinions, or underwriter's opinions shall not be a related party of any party to the transaction.

Procedures for Acquiring or Disposing of Assets with Related Parties Article 9 The Company acquiring or disposing of assets from or to a related party shall follow the relevant decision making process and evaluate the reasonableness of trading terms in accordance with Article 4, 5, 10, 11 and this Article. Besides, the transaction amount reaches 10 percent or more of the Company's total assets, the Company shall

obtain an appraisal report from a professional appraiser or a CPA's opinion.

The transaction amount referred in the preceding paragraph shall be calculated in accordance with Paragraph 4 of Article 5.

When judging whether the trading counterparty is a related party, in addition to the legal formalities, the substance of the relationship shall be considered.

When the Company intends to acquire or dispose of real property or other assets from or to a related party, except for trading of government bonds, bonds under repurchase or reverse repurchase agreements, or subscription or redemption of domestic money market funds issued by the securities investment trust enterprise, the transaction amount reaches 20 percent or more of the Company's paid-in capital, 10 percent or more of the Company's total assets or NT\$300 million or more, the Company may not enter into a contract or make any payment until the following matters have been approved by more than half of all audit committee members and submitted to the board of directors for a resolution, and shall be subject to mutatis mutandis application of Paragraphs 2 and 3 of Article 15:

1. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets.
1. The reason for choosing the related party as a trading counterparty.
1. With respect to the acquisition of real property from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article 10 and Article 11.
1. The date and price at which the related party originally acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the company and the related party.
1. Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the funds utilization.
1. An appraisal report from a professional appraiser or a CPA's opinion obtained in accordance with Paragraph 1.
1. Restrictive covenants and other important stipulations associated with the transaction.

The transaction amounts referred in the Paragraph 4 shall be calculated in accordance with Paragraph 2 of Article 6 and "within the preceding year" as used herein refers to one year preceding the date of occurrence of the current transaction. Transactions that have been approved by audit committee and submitted to the board of directors for a resolution need not be counted toward the transaction amount.

Article 10 Evaluation Methods of the Transaction Costs for Acquiring Real Estate from a Related Party

Acquiring a real estate from a related party, the Company shall evaluate the reasonableness of the transaction costs by the following means:

1. Based on the price of transaction with the related party plus necessary interest on funding and other costs to be duly borne by the buyer. The necessary interest on funding shall be calculated based on the weighted average of the interest rate on borrowing during the year the Company purchases the property. However such interest rate shall not exceed the maximum lending rate for non-financial institutions published by the competent authority.
1. Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties.

Where land and buildings thereupon are combined as a single property purchased in one transaction, the transaction costs for the land and the buildings may be separately appraised in accordance with either of the means listed in the preceding paragraph.

When acquiring real estate from a related party, the Company shall appraise the cost

of the real estate in accordance with Paragraph 1 and Paragraph 2 above, in the meantime shall also engage a CPA to review the appraisal and render an opinion.

Where the Company acquires real estate from a related party under any of the following circumstances, the acquisition shall be conducted in accordance with Paragraph 4 to 6 of Article 9 and the preceding three paragraphs do not apply:

1. The related party acquired the real estate through inheritance or as a gift.
1. More than 5 years will have elapsed from the time the related party signed the contract to obtain the real property to the signing date for the current transaction.
The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on self-owned land or on rented land.

Article 11 Procedure for the Respective Results of Evaluations Are Less Than the Transaction Price with Related Parties

Where the Company acquires the real estate from the related party and the results of appraisals conducted in accordance with Article 10 are uniformly lower than the transaction price, the following steps shall be taken:

1. A special reserve shall be set aside in accordance with Paragraph 1 of Article 41 of the Securities and Exchange Act against the difference between the real property transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where the Company uses the equity method to account for its investment in another company, then the special reserve called for under Article 41, Paragraph 1 of the Securities and Exchange Act shall be set aside pro rata in a proportion consistent with the share of the Company's equity stake in the other company.
1. Independent directors of audit committee shall comply with Article 218 of the Company Act.
1. Actions taken pursuant to Subparagraph 1 and Subparagraph 2 shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

The Company that has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased at a premium, or the assets have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent.

When the Company acquires real estate from a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was a non-arm's-length transaction.

Where the following circumstances exist, objective evidence has been submitted and concrete opinions on reasonableness have been obtained from a professional real property appraiser and a CPA, this restriction shall not apply:

1. Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions:
(1) Where undeveloped land is appraised in accordance with the methods in the preceding Article, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower.
(2) Completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market practices.
(3) Completed leasing transactions by unrelated parties for other floors of the same property from within the preceding year, where the transaction terms are similar after calculation of reasonable price discrepancies among floors in accordance with standard property leasing market practices.
1. Where the Company acquiring real property from a related party provides evidence that the terms of the transaction are similar to the terms of transactions completed for the acquisition of neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year.

Completed transactions for neighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transaction for similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the real property.

Article 12 Mergers and Consolidations, Splits, Acquisitions, and Assignment of Shares

The Company that conducts a merger, demerger, acquisition, or transfer of shares,

prior to convening the audit committee and board of directors discussing the Mergers and acquisitions, shall engage a CPA, attorney, securities underwriter or other independent experts to provide opinions on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other property to shareholders, and submit the opinions to audit committee for approval and submit to the board of directors for deliberation and passage. In the event the Company merge with its subsidiary company whose one hundred percent of the total issued shares or total capital is held directly or indirectly by the Company or that subsidiary company merge with one another whose one hundred percent of the total issued shares or total capital is held directly or indirectly by the Company, the Company may be exempt from the preceding experts opinions on the reasonableness.

The Company participating in a merger, demerger or acquisition shall prepare a public report to shareholders detailing important contractual content, matters relevant to the merger, demerger, or acquisition, and the expert opinions of the preceding paragraph and the outcome of audit committee prior to the shareholders' meeting when sending shareholders notification of the shareholders' meeting for reference in deciding whether to approve the merger, demerger, or acquisition. Provided, where a provision of another act exempts the Company from convening a shareholders' meeting to approve the merger, demerger, or acquisition, this restriction shall not apply.

Where the shareholders meeting of any one of the companies participating in a merger, demerger, or acquisition fails to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by the shareholders meeting, the Company shall publicly explain the reason, the follow-up measures, and the preliminary date of the next shareholders' meeting without delay.

Unless otherwise provided by another act or granted in advance by the FSC for extraordinary circumstances, the companies participating in any merger, demerger or acquisition shall convene a board of directors meeting and shareholders meeting on the day of the transaction to resolve matters relevant to the merger, demerger, or acquisition.

Unless otherwise provided by another act or granted in advance by the FSC for extraordinary circumstances, the companies participating in a transfer of shares shall convene a board of directors meeting and shareholders' meeting on the day of the transaction.

When participating in a merger, demerger, acquisition, or transfer of shares, a

company that is listed on an exchange or has its shares traded on an OTC market shall prepare a full written record of the following information and retain it for five vears for reference:

1. Basic identification data for personnel: Including the job titles, names, and national ID numbers (or passport numbers in case of foreign nationals) of all persons involved in the planning or implementation of any merger, demerger, acquisition, or transfer of shares prior to disclosure of the information.
1. Dates of material events: Including the signing of any letter of intent or memorandum of understanding, the hiring of a financial or legal advisor, the execution of a contract, and the convening of a board of directors meeting.
1. Important documents and minutes: Including plans for mergers, demergers, acquisitions, and transfer of shares, any letter of intent or memorandum of understanding, material contracts, and minutes of board of directors meeting.

When participating in a merger, demerger, acquisition, or transfer of shares, a company that is listed on an exchange or has its shares traded on an OTC market shall, two hours before the beginning of trading hours on the next business day following the date of passage of a resolution by the board of directors, submit the information required in Subparagraphs 1 and 2 of the preceding paragraph to the FSC for recordation. The information shall be disclosed in the prescribed format and via the Internet-based information system.

Where any of the companies participating in a merger, demerger, acquisition, or transfer of shares is neither listed on an exchange nor has its shares traded on an OTC market, the Company shall sign an agreement with such companies in accordance with the provisions of Paragraphs 6 and 7.

Every person participating in or privy to the plan for merger, demerger, acquisition, or transfer of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to public disclosure of the information and may not trade, in their own name or under the name of another person, in any stock or other equity security of any company related to the plan for merger, demerger, acquisition, or transfer of shares.

When participating in a merger, demerger, acquisition or transfer of shares, the share exchange ratio and acquisition price shall not be arbitrarily altered, except for the below-listed circumstances which shall be stipulated in the contract of merger, demerger, acquisition or transfer of shares:

Cash capital increase, issuance of convertible corporate bonds, or the issuance of

bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity based securities.

1. An action, such as a disposal of major assets, which affects the Company's financial and business operations.
1. An event, such as a major disaster or major change in technology, which affects shareholder equity or share price.
1. An adjustment where any of the companies participating in the merger, demerger, acquisition, or transfer of shares, buys back treasury stock by law.
1. Any change in the number of entities or companies participating in the merger, demerger, acquisition, or transfer of shares.
1. Other terms and conditions that the contract stipulates may be altered and that have been publicly disclosed.

When participating in a merger, demerger, acquisition or transfer of shares, the contract thereof shall specify the rights and obligations of any participating companies, as well as the following matters:

1. Handling of breach of contract.
1. Principles for the handling of equity-type securities previously issued or treasury stock previously bought back any company that is extinguished in a merger or that is demerged.
1. The amount of treasury stock participating companies are permitted under law to buy back after the record date of calculation of the share exchange ratio, and the principles for handling thereof.
1. Measures of handling changes in the number of participating entities or companies.
1. Preliminary progress schedule for plan execution and anticipated completion date.
1. According to the law the scheduled date for convening a shareholders meeting and relevant procedures if the plan exceeds the deadline without completion.

After the information about merger, demerger, acquisition or transfer of shares have been disclosed, if any of the participating companies intends to carry out a further merger, demerger, acquisition or share transfer with another company, all of the participating companies shall carry out anew the procedures or legal actions that had originally been completed toward the merger, demerger, acquisition, or share transfer, except that where the number of participating companies is decreased and a participating company's shareholders meeting has adopted a resolution authorizing the board of directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.

Where any of the companies participating in the merger, demerger, acquisition or transfer of shares is not a public company, the Company shall sign an agreement with the non-public company in accordance with the provisions of Paragraphs 4 to 9 and Paragraph 12.

Penal Provisions Article 13

The personnel responsible for acquisition or disposal of assets violates the Procedures shall be penalized according to the relevant personnel management regulations of the Company.

Article 14 Unmentioned Matters

Any other matter or event not stipulated in the Procedures shall be managed in accordance with the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies" and related regulations.

Article 15 Additional Provisions

Any amendment of the Procedures or any transaction of major assets shall be approved by more than half of all audit committee members and submitted to the board of directors for a resolution.

If approval of more than half of all audit committee members as required in the preceding paragraph is not obtained, the Procedures may be implemented if approved by more than two-thirds of all directors, and this resolution of the audit committee shall be recorded in the minutes of the board of directors meeting.

The terms "all audit committee members" in Paragraph 1 and "all directors" in Paragraph 2 shall be counted as the actual number of persons currently holding those positions.

When the proposal of the Procedures amendment or transaction for the acquisition or disposal of assets are submitted to the board of directors for discussion, the board of directors shall take into full consideration for each of independent director's opinion. If an independent director raises objections or expresses reservations to the amendment or the transaction, it shall be recorded in the minutes of the board of directors meeting.

Article 16 Effectiveness

Any amendment of the Procedures shall be approved by the audit committee, and submitted to the board of directors for resolution, and then submitted to the shareholders' meeting for approval.

The History of "PROCEDURES FOR ACQUIRING AND DISPOSING OF ASSETS"

1. The Procedures was made on October 14, 2003.
1. The 1st amendment was made on June 3, 2005.
1. The 2nd amendment was made on June 15, 2007.
1. The 3rd amendment was made on June 15, 2011.
1. The 4th amendment was made on June 15, 2012.
1. The 5th amendment was made on June 13, 2013.
1. The 6th amendment was made on June 11, 2014.
1. The 7th amendment was made on May 31, 2017.

CENTRAL REINSURANCE CORPORATION Shareholdings of Directors

March 31, 2019

Title	Name	Shares held
Chairman	Evergreen International Corp. Representative : Yang, Cheng-Tui
Vice Chairman	Evergreen International Corp. Representative : Chang, Kuo-Cheng	207,419,251
Director	Evergreen International Corp. Representative: Chang, Kuo-Ming
Director	Evergreen International Corp. Representative : Tai, Jiin-Chyuan
Director	Ministry of Finance, R.O.C. Representative : Lee, Yi-Fen
Director	Ministry of Finance, R.O.C. Representative : Chen, Kuan-Pao	120,394,773
Independent Director	Yau, Sea-Wain	0
Independent Director	Chou, Yu-Cheng
Independent Director	Chow, Ker-Kaoo	658
	Total	327,814,682

Notes:

1. As of March 31, 2019, the stock stop transferring date for the Company's shareholders' meeting, the total number of shares already issued is 590,388,750 shares.
1. All directors' minimum shareholding number is 18,892,440 shares.

AI assistant

Central Re — AGM Information 2019

52207_rns_2019-06-18_2594a8f1-717c-44ac-aeeb-f721ec9aa3bd.pdf

Central Re

CENTRAL REINSURANCE CORPORATION

May 29, 2019

Table of Contents

AGENDA FOR THE MEETING

APPENDICES

CENTRAL REINSURANCE CORPORATION

2019 Annual General Shareholders' Meeting

L. Report the total number of shares represented at this AGM and announce commencement of the meeting.

III. Report Items:

IV. Ratification and Discussion Items:

Proposed by the Board of Directors

Proposal 1: Ratification of the 2018 Business Report and Audited Financial Report. (Handbook pages 4-20) Please ratify.

PricewaterhouseCoopers.

Resolution:

Ratification of 2018 earnings distribution. (Handbook page Proposal 2: 21) Please ratify.

Description:

Resolution:

Proposed by the Board of Directors

Resolution:

V. Extraordinary Motions.

VI. Meeting Adjournment.

CENTRAL REINSURANCE CORPORATION Business Report of the year 2018

1.2 Financial Management:

The latest ratings are shown as follows.

$\mathfrak{Z}$ Profitability Analysis

Research & Development 4

CENTRAL REINSURANCE CORPORATIONBALANCE SHEETS(Expressed in thousands of New Taiwan dollars)

CENTRAL REINSURANCE CORPORATIONSTATEMENTS OF COMPREHENSIVE INCOME(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

CENTRAL REINSURANCE CORPORATIONSTATEMENTS OF COMPREHENSIVE INCOME(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

CENTRAL REINSURANCE CORPORATION STATEMENTS OF CASH FLOWS (Expressed in thousands of New Taiwan dollars)

REPORT OF INDEPENDENT ACCOUNTANTS

Opinion

Basis for opinion

Key audit matters

Recognition of reinsurance revenue

Description

How our audit addressed the matter

Estimation of claims reserve

Description

How our audit addressed the matter

Responsibilities of management and those charged with governance for the financial statements

Auditor's responsibilities for the audit of the financial statements

CENTRAL REINSURANCE CORPORATION

Earnings Distribution Plan

For the Year of 2018

Audit Committee's Review Report

CENTRAL REINSURANCE CORPORATION

Comparison Table for the Procedures for Acquiring and Disposing of Assets

Before and After Amendments

CENTRAL REINSURANCE CORPORATION ARTICLES OF INCORPORATION

Chapter 1 GENERAL PROVISIONS

Article 1

Article 2

Article 3

Article 4

Article 5

Article 6

Article 7

Chapter 3 SHAREHOLDERS' MEETING

Article 8

Article 9

Article 10

Article 11

Article 12

Article 13

Article 14

Article 15

Article 16

Article 17

Article 18

Article 19

Article 20

Article 21

Article 22

Article 23

Article 24

Central Re AGM Information 2019

CENTRAL REINSURANCE CORPORATION
BALANCE SHEETS
(Expressed in thousands of New Taiwan dollars)

CENTRAL REINSURANCE CORPORATION
STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

CENTRAL REINSURANCE CORPORATION
STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)