Central Re - Annual Report 2015 | FinancialReports.eu

2015

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Annual Report Printed on 30 March, 2016

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	CONTENTS
I.	LETTER TO SHAREHOLDERS	1
	OperatingPerformance in 2015	3
	Business Plan for 2016	7
	Development Strategy	8
	External Competitive,Regulatoryand Macroeconomic Conditions	9
II.	COMPANY PROFILE	13
	Date of Incorporation	13
	CompanyHistory	13
III.	CORPORATE GOVERNANCE REPORT	14
	Organization	14
	Directors and Management Team	15
	Implementation of Corporate Governance	24
	Corporate Social Responsibility	34
	Ethical Corporate Management	41
	Material Resolutions of Shareholders Meetingand Board of Directors Meeting	46
	Information on CPA Professional Fees and Replacement of Certified Public
	Accountant	49
	Changes in Shareholdings and shares Pledged by Directors, Managers and
	Major Shareholders	51
IV.	CAPITAL OVERVIEW	53
	Source of Capital Stock	53
	Shareholders Structure	54
	Diffusion of Ownershipand List of Principal Shareholders	54
	Disclosure of the Share Prices and Related Information for the Past Two Fiscal
	Years	55
	Dividend Policyand Earnings Distribution Implementation Status	56
V.	BUSINESS OPERATIONS OVERVIEW	57
	Business Activities	57
	Market Overview	61
	Human Resources	62
	Labor Relations	62
	Important Contracts	64
VI.	FINANCIAL INFORMATION	66
	Financial Statement for Recent Five Years	66
	Financial Analyses for Recent Five Years	70
	Audit Committee’s Review Report	72
	Financial Statements and Report of Independent Accountants	73

I. LETTER TO SHAREHOLDERS

Dear Shareholders,

Central Reinsurance Corporation (Central Re) is the only professional reinsurer, founded in Taiwan providing reinsurance coverage for Life and non-life insurers worldwide for nearly 50 years.

Despite adverse operating environments in 2015 like customers’ increasing retention, price softening, turmoil in financial markets and persistent low interest rate etc., the company was still able to perform exceptionally well. In 2015, our operating revenue achieved NT$14.1 billion with after-tax profit amounting NT$766 million which is in excess of our target and earnings per share at NT$1.36.

As to our financial strength and capital structure, our reserves of retained business amounted to NT$21.9 billion and our paid-up capital was NT$5.6 billion with equity before distribution of dividends at NT$9.3 billion demonstrating a level of pretty strong adequacy.

Based on our solid domestic market position, very strong capital level, strong earning capability and liquidity profile, and satisfactory underwriting results, the rating agency Standard & Poor's reaffirmed our A rating and stable outlook in January 2016. Taiwan Ratings Corp. also reaffirmed our rating of twAA+. In addition, another international rating agency A.M. Best has continuously recognized our operation performance and reaffirmed our A rating and stable outlook in July 2015. Long term good credit ratings will not only be beneficial for the acquisition of quality business, but also demonstrate our good solvency capability to protect our commitment to our customers.

During the early half of 2015, to enhance the competitiveness of Taiwan financial industry in the international market, regulators have allowed domestic insurers to apply for the establishment of offshore insurance units (OIU) to do international business. Central Re was approved to set up OIU in September, 2015 and started doing business on January 1, 2016. With the establishment of OIU and its tax benefit, Central Re will be able to enhance its competitiveness and improve the quality of its overseas business to achieve a better mixture of overall portfolios.

We hereby submit the operation results of our business plan, budget accomplishment, profitability analysis, research and development status of 2015 and the business plan for 2016 in the following pages for your perusals.

Looking into the future, our management team will remain committed to our corporate philosophy of “Challenge, Innovation and Teamwork” to intensify the

1 Central Reinsurance Corporation Annual Report 2015

management of customer relationship to further cultivate the local market, to focus on the operation of our core business, to prudently expand our international business and in the meantime to practice appropriate capital management and sound investment activities to achieve our goals of steady increase of revenue and profit and everlasting operation of our enterprise. I respectfully request the support and guidance from you and hope you will all have good health and wishes come true.

Chairman

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Central Reinsurance Corporation Annual Report 2015

Operating Performance in 2015

Central Reinsurance Corporation (Central Re) is the only professional reinsurer, founded in Taiwan providing reinsurance coverage for Life and non-life insurers worldwide for nearly 50 years. We are committed to achieve ethical corporate management, stabilization of insurance market, and the fulfillment of corporate social responsibility. In order to ensure sustainable management and adaption to the changing market, it is our strategy to utilize our domestic advantage to further cultivate the Taiwan market, to focus on better customer services, to prudently expand our international business, and to enhance the quality of business portfolio.

a. Operating Results

1. Underwriting Operations

The gross premium written in 2015 was NT$14,194,290 thousand, a 10.24% decrease from NT$15,813,621 thousand in budget estimation. The breakdown by source is shown in below table.

NT$ thousands

			NT$ thousands	NT$ thousands
Gross Premium Written
Year			Increase(+)/Decrease(-)

Item	Actual	Budget	Amount	%

Non-Life Business	9,760,104	9,797,682	-37,578	-0.38%
Life Business	4,434,186	6,015,939	-1,581,753	-26.29%
Total	14,194,290	15,813,621	-1,619,331	-10.24%

2. Financial Situation

By the end of 2015, the company's paid-up capital was NT$5,622,750 thousand and the total equity before distribution of dividends was NT$9,349,481 thousand, maintaining solid capital level.

To build up financial strength and reinforce the liquidity and solvency, the company holds adequate reserves. By the end of 2015, total reserves reached NT$21,907,240 thousand.

The company's total net gain from investment at the end of 2015 was up 10.71% to NT$416,161 thousand compared to budget estimation.

3. Credit Ratings

Based on Central Re’s solid domestic market position, capital and earnings at very strong level, strong liquidity profile and satisfactory underwriting performance, rating agency Standard & Poor's reaffirmed our A rating and

3 Central Reinsurance Corporation Annual Report 2015

stable outlook in January 2016. Taiwan Ratings Corp. also reconfirmed our rating of twAA+.

A.M. Best reaffirmed our A rating and stable outlook in July of 2015. Long term good credit ratings will not only be beneficial for the acquisition of quality business, but also demonstrate our good solvency capability to protect our commitment to our customers.

The latest ratings are shown as follows.

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Rating Agency Rating Outlook
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A.M. Best	A	Stable
Standard & Poor’s	A	Stable
Taiwan Ratings	twAA+	Stable

b. Budget Accomplishment

The results of budget accomplishment are shown as follows.

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NT$ thousands
Item Actual Budget Achievement (%)
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			NT$thousands
Item	Actual	Budget	Achievement (%)
Operating Revenues	14,068,010	15,486,497	90.84%
Operating Costs	12,748,976	14,225,703	89.62%
Gross Operating Income	1,319,034	1,260,794	104.62%
Operating Expenses	335,428	364,320	92.07%
Net Operating Income	983,606	896,474	109.72%
Non-Operating Income and Expenses	-1,790	0	-100.00%
Income from Continuing OperationsBeforeTax	981,816	896,474	109.52%
Income Tax Expense	215,951	152,446	141.66%
Income from Continuing Operations After Tax	765,865	744,028	102.93%

c. Profitability Analysis

Earnings per share (after tax) decreased by NT$0.19, to NT$1.36 for 2015. This was mainly due to the decrease in gross operating income from insurance business and investment business during the year.

Central Reinsurance Corporation Annual Report 2015 4

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Year
2015 2014 Average
Ratio
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Year Ratio	Year Ratio	2015	2014	Average

Profitability	Return on Assets(%)	2.28	2.60	2.44
	Return on Equity (%)	8.14	9.42	8.78
	Net OperatingIncome / Paid-UpCapital(%)	17.49	17.80	17.65
	Income from Continuing Operations Before Tax/Paid-Up Capital(%)	17.46	17.80	17.63
	Net Profit Margin(%)	5.44	5.35	5.40
	Earnings Per Share(After Tax)(NT$)	1.36	1.55	1.46

d. Research and Development

1. Human Resources Development

In order to enhance the work efficiency and the career development of our employees, we have established a variety of personal and professional curricula, based on Central Re's training framework, toward every level and with all functions. Currently, training courses of our employees are related to (re)insurance, finance, risk management, compliance training, interpersonal skills, and so on. Training detail in 2015 is shown in the below table.

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Attendance
Training Program
Number
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Training Program	Training Program	Attendance Number
Mandatory Training	Orientation Training	8
	The Acknowledgement and Training for Legal and Compliance	215
	Internal Control, Auditing and Self-inspection Training	60
	The Regulatory On-job Training for Money Laundering Prevention	81
	The Acknowledgement and Training for Personal Information Protection	37
	Ethical Corporate Management Training	53
	Risk Management Training	115
Professional Training	Administrative Management Courses (e.g. human resources, shareholder services, occupationalsafetyandhealth)	9
	Specialized Finance and Investment Courses	37
	Specialized (Re)insurance and Actuarial Courses	227
	Risk Management Courses	53
Compliance Training	External Finance-related Professional Courses, held by a competent authority-designated institution, for Internal auditors	18
	External Courses, offered by institutes recognized by the competent authority,for compliancepersonnel	8

To extend colleagues’ global perspective, we also provided overseas training

5 Central Reinsurance Corporation Annual Report 2015

opportunities, such as insurance seminars or financial conferences, which were attended by 15 people in 2015.

Meanwhile, we constantly inspire our employees to obtain the professional certifications and licenses of the non-life and life insurance and financial related exams held by domestic and international institutions. There are 61 colleagues who have passed the following professional examinations and enrolled correlated designations.

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Number
Item
Passing
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enrolled correlated designations.	enrolled correlated designations.
Item		Number Passing

Domestic Certification	The certificate as a qualified insurance underwriter of non-life insurance	20
	The certificate as a qualified claim adjuster of non-life insurance	8
	The certificate as a qualified insurance underwriter of life insurance	5
	The certificate as a qualified claim adjuster of life insurance	3
	Fellow of Actuarial Institute of the Chinese Taipei (FAICT)	2
	Associate of Actuarial Institute of the Chinese Taipei	1
	Basic Proficiency Test on Bank Internal Controls	2
International Certification	Chartered Property Casualty Underwriter (CPCU)	2
	Associateship of the Chartered Insurance Institute (ACII)	1
	Associate of the Society of Actuaries (ASA)	2
	Associate of the Casualty Actuarial Society (ACAS)	1
	The Academy of Life Underwriting	1
	The Fellow, Life Management Institute (FLMI)	5
	Associate, Customer Service (ACS)	3
	Associate, Annuity Products and Administration (AAPA)	1
	The Chartered Financial Analyst	1
	Financial Risk Manager	2
	Associate in Risk Management (ARM)	1

Furthermore, we offer diversified human resource programs in accordance with job requirements and personal interests to our employees to sharpen and exercise their talents. In 2015, we not only hired 8 new employees, but also provided 7 job rotations and 18 job promotions to enhance employees’ expertise and career development.

Business Development and Service
(1) Central Re was approved to set up offshore insurance units (OIU) in

Central Reinsurance Corporation Annual Report 2015 6

September, 2015 and started doing business on January 1, 2016. With the establishment of OIU and its tax benefit, we will be able to enhance our competitiveness and improve the quality of overseas business to achieve a better mixture of overall portfolios.

(2) We continue to expand business and increase underwriting profit by prudently writing facultative business, joining domestic insurance pool and life coinsurance business.
(3) Enhancing customer satisfaction. We assist our clients to design and price innovative products by providing market information and reliable statistics. In addition, we also provide regulation support, risk management advisory, actuarial advisory, and skill training seminars with regard to underwriting and claim handling.
(4) In order to improve efficiency and strengthen internal control, we continue to develop our IT system and construct remote backup mechanism. The management uses related statistical analysis to establish future operating strategies.
(5) Set up talent pool to support the development of business and customer service.
(6) Keep promoting our company's “Key Risk Indicator”.

Business Plan for 2016

Central Re established the business plan for 2016 as below.

a. Operating Strategies

Implement corporate governance activities, ethical corporation management and fulfillment of corporate social responsibility
Strengthen capital and financial structure to enhance company's solvency
Business development and capital allocation consider relation between risk and return, and aim to maximize capital allocation efficiency and benefits of shareholders.
Integrate risk management and operation decisions by means of practicing risk management as a mechanism to enhance the ability of risk governance.
Satisfy clients by tailor-made solutions based on their requirements to gain the profitable business.

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Prudently expand international business to diversify our business portfolio and increase profit
Maintain client relationships by providing actuarial services, support of new products development, professional seminar, discussion of regulation, etc.
Adopt a sound investment strategy to achieve our goals of steady revenue and earnings growth

b. Operating Objective

The growth of global economy is lack of momentum, and the prolonged low interest rate continues to attract new capitals into reinsurance market. Consequently, the rating agencies assigned a conservative outlook to the reinsurance sector, and we expect soft global reinsurance market to be continued in 2016. In the face of competition and the challenging business environment, we will prudently assume our business and adopt a sound investment strategy to create business portfolio with risk control and profit stability.

Development Strategy

Based on the changing operational environment, market trend and our visions, we build up our development strategy as below.

a. Implement legal compliance, risk management, internal control and corporate governance activities
b. Uphold sound business ethics, contribute to the insurance market, and fulfillment of corporate social responsibility
c. Promote our professional image, strengthen employee's training and career development
d. Focus on providing tailor-made reinsurance solutions to increase customer satisfactions and values
e. Cultivate Taiwan market to pursue long term and steady underwriting profit
f. Prudently expand international business and increase overseas business from direct market
g. Strengthen capital structure and enhance utilization efficiency of capital

Central Reinsurance Corporation Annual Report 2015 8

External Competitive, Regulatory and Macroeconomic Conditions

a. External Competitive Conditions

By the end of 2015, there are 3 professional reinsurers in Taiwan. Our company is the only domestic reinsurer and the other two foreign reinsurers are General Reinsurance AG. Taiwan Branch and RGA Global Reinsurance Company Limited Taiwan Branch. We are in the presence of a challenge in 2016 due to the domestic insurers' continuously increase of their retentions, sluggish growth of local reinsurance's requirement, and abundance capacity from global reinsurance market.

b. Regulatory Conditions

Insurance Act
The Insurance Act was amended on February 4, 2015, with key points as follows:
(1) To enhance the quality and the reliability of Appointed Actuary’s actuarial report, an insurance enterprise shall employ external actuaries to periodically review the actuarial report with regard to accuracy, rationality and reliability. The competent authority also added the penal provisions to regulate external actuaries if there is any misrepresentation, concealment, omission, or incorrect information of external actuary’s review report. (Amendments of Article 144 and 171).
(2) In order to enhance the insurance enterprises to pay more attention to the internal control and auditing systems, the competent authority increase the sum of administrative fine if the insurance enterprises fail to establish or enforce internal control or auditing systems. (Amendment of Article 171-1)
Offshore Banking Act

For the purpose of enlarging the market scale of offshore financial center and inviting international investors to participate in financial activities of our country, the legislatives authorizes insurance enterprises may conduct international financial activities and be entitled to handle the relevant insurance businesses. The preceding Act was amended on February 4, 2015, with key points as follows:

(1) The insurance enterprises are authorized to conduct offshore insurance business. (Amendments of Article 1 and 2)
(2) Stipulate the qualification of insurance enterprises to apply for a license to establish an offshore insurance unit within the ROC with independent

9 Central Reinsurance Corporation Annual Report 2015

accounting to conduct offshore insurance business. And the term “insurance enterprises” referred to in the preceding sentence shall mean non-life insurance enterprises, life insurance enterprises and professional reinsurance enterprises. An offshore insurance unit established by insurance enterprises hereof shall allocate working capital for its operations.(Amendment of Article 22-12)

(3) Stipulate the types of business an offshore insurance unit may only conduct in its operations.(Amendment of Article 22-13)
(4) Unless otherwise provided in this Act, the conducting of businesses specified under the subparagraphs of paragraph 1, Article 22-13 herein by an offshore insurance branch is not subject to the restrictions in relevant articles of the Foreign Exchange Control Act and the Insurance Act.(Amendment of Article 22-15)
(5) Stipulate income, sales revenue from offshore insurance business and all types of certificates used in offshore insurance business, which for all above were operated by offshore insurance unit, shall be individually exempt from business income tax, business tax, stamp tax and income tax withholding. However, income and sales revenue derived from utilization of funds within the territory of the ROC shall be subject to taxation or exemptions as specified in the Income Tax Act and the Value-Added and Non-Value-Added Business Tax Act. And certificates issued in connection with utilization of funds within the territory of the R.O.C shall be subject to taxation or exemption as specified in the Stamp Tax Act.(Amendment of Article 22-16)

The Company has been approved by the competent authorities to establish an offshore insurance unit within the ROC.

Regulations Governing Use of Insurer’s funds in Special Projects, Public Utilities and Social Welfare Enterprises
In order to guide insurance enterprises in investing public utilities, the Executive Yuan continuously promoted and improved the flexibility in operation of insurance enterprises’ funds. The competent authority amended the preceding Regulations on April 7, 2015 with key points as follows:
(1) An insurance enterprise, that intends to invest in special projects, public utilities and social welfare enterprises, shall formulate a procedure for internal handling systems.(Amendment of Article 6)
(2) The stipulation regulates the limit of investment amount made onto an

Central Reinsurance Corporation Annual Report 2015 10

enterprise with the items enumerated under Article 3 and 4 shall not exceed 45% of the paid-in capital of the invested entity, now is not applied to an insurance enterprise qualified with the specific conditions and obtains the approval of the competent authority.(Amendment of Article 7)

(3) When an insurance enterprise investing in one invested entity and the total amount of the said investment exceeds half of the paid-in capital or half of the total outstanding voting shares of such entity, it shall comply with the monitoring and audit management system. And in the specific situation, an insurance enterprise must disclose the investing information publicly.(Amendment of Article 7-1)

The Company has established internal rules to comply with in accordance with the preceding Regulations.

Regulations Governing Implementation of Internal Control and Audit System of Insurance Enterprises The competent authority amended the preceding Regulations on May 12, 2015 with key points as follows:
(1) Revised the objective and ingredients of internal control systems. Meanwhile, the insurance enterprises shall comply with the relevant laws, and all other internal rules and the Articles of Incorporation of the insurance enterprise of their own. Also, the management of the audit committee meeting shall incorporate into the internal control system.(Amendments of Article 2, 4, 5, 7, 8, 15, 30, 30-1, 31, 32, 33 and 38)
(2) For an insurance enterprise established an audit committee, the adoption or amendment of an internal control system and the appointment or discharge of a general auditor shall be subject to the consent of audit committee. Even if the preceding matters have not been approved with the consent of audit committee, the resolution of that committee shall also be recorded in the minutes of the directors meeting.(Amendments of Article 3 and 11)
(3) The deputies in place for the internal auditors shall only be any other auditors of the same unit.(Amendment of Article 13)
(4) For an insurance enterprise established an audit committee, the management of that committee meeting shall be included in the internal audit report for routine auditing.(Amendment of Article 19)

The Company has revised internal rules to comply with in accordance with the preceding Regulations.

11 Central Reinsurance Corporation Annual Report 2015

c. Macroeconomic Conditions

According to Taiwan's Directorate-General of Budget, Accounting and Statistics report, the steady growth of the US's economy and the recovery of the EU and Japan economy, prosperity among developed countries has a better outlook than last year. However, the growth of developing countries including China has slow down the pace, which may exacerbate the volatility and uncertainty of global economy. Citing from the report issued by Global Insight which predicts that 2016 world economic growth rate will be at 2.8%, of which US at 2.7%, Euro area at 1.9%, China at 6.3%, South Korea at 2.5%, Hong Kong at 2.3% and Singapore at 1.5%. Taiwan economic growth is predicted at 1.47% from the Taiwan's Directorate-General of Budget, Accounting and Statistics' view due to its pessimistic outlook toward the foreign demand.

Based on the current environment, our economy is highly related to the global economy in 2016. There is downward risk among ambiguous worldwide condition. Thus, without an optimistic outlook of the economy, the reinsurance market continues to be influenced by excess capacity, deterioration of pricing and weakened terms and conditions. In the face of competition and the challenging business environment, we will prudently assume our business and adopt a sound investment strategy to create business portfolio with risk control and profit stability.

Central Reinsurance Corporation Annual Report 2015 12

COMPANY PROFILE 02

II. COMPANY PROFILE

Date of Incorporation

October 31, 1968

Company History

Central Re was established by the Ministry of Finance (MOF) on October 31, 1968 with the mission of promoting the sound development and sustainable growth of the domestic insurance industry. Central Re was founded with capital stock of NT$15 million, but after numerous capital injections, the company’s paid-up capital reached its current NT$5,622.75 million.

Central Re is the sole domestic reinsurance company in Taiwan and specializes in undertaking reinsurance of domestic and international non-life and life insurance companies. In line with the trends of liberalization and globalization, Central Re completed its privatization process on July 11, 2002. However, at present, the Taiwan’s Ministry of Finance remains the second-largest shareholder of Central Re. Meanwhile, the Evergreen Group, one of the top transportation groups in the world, is Central Re’s largest shareholder.

Central Re was approved to set up OIU in September, 2015 and started doing business on January 1, 2016. With the establishment of OIU and its tax benefit, Central Re will be able to enhance its competitiveness and improve the quality of its overseas business to achieve a better mixture of overall portfolios.

To increase its competitiveness, Central Re adopted the Evergreen Group’s motto of “Challenge, Innovation and Teamwork”. The company will continue to become a market paradigm to enhance clients’ value. Its vision is to become Asia’s best reinsurer.

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CORPORATE GOVERNANCE REPORT 03

III. CORPORATE GOVERNANCE REPORT

Organization

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Central Reinsurance Corporation Annual Report 2015 14

Other Managers, Directors or Supervisors Related by Marriage or Within Second-degree kinship of Each Other	Rela- tion	-	-	-	-
	Name	-	-	-	-
	Title	-	-	-	-
Other Position		-	Adjunct Associate Professor, Dept. of Risk Management and Insurance, National Chengchi University	-	-
Experience & Education		-	Deputy Director General, Dept. of Insurance, Ministry of Finance President, Central Reinsurance Corp. MBA, The College of Insurance, New York City	-	Chairman, Evergreen Marine Corp. (Taiwan) Ltd. Boston University
Sharehold - ing by Other Nominee	％	0	0	0	0
	Shares	0	0	0	0
Spouse & Dependents Sharehold -ing	％	-	0	-	0
	Shares	-	0	-	0
Present Shareholding	％	35.13	0.18	35.13	1.16
	Shares	197,541,037	1,000,735	197,541,037	6,541,899
Shareholding when Elected	％	35.13	0	35.13	0
	Shares	197,541,037	0	197,541,037	0
Date of Initial Election, Appoint- ment		2002. 10.29	1993. 09.29	2002. 10.29	2007. 06.12
Tenure (Years)		3 Years	3 Years	3 Years	3 Years
Date Elected		2014. 06.11	2014. 06.11	2014. 06.11	2014. 06.11
Name		Evergreen International Corp.	Representative: Yang, Cheng-Tui	Evergreen International Corp.	Representative: Chang, Kuo-Cheng
Nationality And Registration		Republic of China		Republic of China
Title		Chairman		Vice Chairman

Other Managers, Directors or Supervisors Related by Marriage or Within Second-degree kinship of Each Other	Rela- tion	-	-
	Name	-	-
	Title	-	-
Other Position		-	President, Evergreen International Corp. Director: EVA Airways Corp., Evergreen International Storage &Transport Corp.,Uni Airways Corp., Evergreen Sky Catering Corp., Evergreen Aviation Technologies Corp., Taipei Port Container Terminal Corp., Super Max Engineering Enterprise Corp., Chang Yung-Fa Foundation, Chang Yung-Fa Charity Foundation
Experience & Education		-	Legal Executive Vice President, Evergreen International Corp. Master degree in Maritime Law, National Taiwan Ocean University
Sharehold - ing by Other Nominee	％	0	0
	Shares	0	0
Spouse & Dependents Sharehold -ing	％	-	0
	Shares	-	0
Present Shareholding	％	35.13	0
	Shares	197,541,037	0
Shareholding when Elected	％	35.13	0
	Shares	197,541,037	0
Date of Initial Election, Appoint- ment		2002. 10.29	2014. 06.11
Tenure (Years)		3 Years	3 Years
Date Elected		2014. 06.11	2014. 06.11
Name		Evergreen International Corp.	Representative: Tai, Jiin-Chyuan
Nationality And Registration		Republic of China
Title		Director

Other Managers, Directors or Supervisors Related by Marriage or Within Second-degree kinship of Each Other	Rela- tion	-	-	-
	Name	-	-	-
	Title	-	-	-
Other Position		Finance Executive Vice President, Evergreen International Corp. Supervisor: Evergreen Marine Corp. (Taiwan) Ltd., EVA Airways Corp., Evergreen Sky Catering Corp., Uni Airways Corp., Ever Accord Construction Corp., Evergreen Logistics Corp.	-	Deputy Director- General, Department of Planning Ministry of Finance, R.O.C
Experience & Education		Senior Vice President, Finance Division of Evergreen International Corp. Ming Chuan University	-	Senior Executive Officer, Department of Planning Ministry of Finance, R.O.C Master Graduate Institute of
Sharehold - ing by Other Nominee	％	0	0	0
	Shares	0	0	0
Spouse & Dependents Sharehold -ing	％	0	-	0
	Shares	0	-	0
Present Shareholding	％	0	22.17	0
	Shares	0	124,632,689	0
Shareholding when Elected	％	0	22.68	0
	Shares	0	127,539,689	0
Date of Initial Election, Appoint- ment		2014. 06.11	1968. 10.31	2011. 06.15
Tenure (Years)		3 Years	3 Years	3 Years
Date Elected		2014. 06.11	2014. 06.11	2014. 06.11
Name		Representative: Ku Lai, Mei-Hsueh	Ministry of Finance, R.O.C.	Representative: Lee, Yi-Fen
Nationality And Registration		Republic of China	Republic of China	Republic of China
Title		Director	Director	Director

Other Managers, Directors or Supervisors Related by Marriage or Within Second-degree kinship of Each Other	Rela- tion		-	-
	Name		-	-
	Title		-	-
Other Position			Acting Director General, Training Institute, Ministry of Finance	Dean, Office of International & Cross-Strait Academic Exchange, Soochow University Professor, Soochow University School of Law Chief Executive
Experience & Education		Public Policy Science National Chung Hsing University	Director, Northern Region Office National Property Administration Director-General, National Property Administration, Ministry of Finance Deputy Department of Land Economics, National Chengchi University	Dean, Chinese Culture University College of Law Juris Doctor, University of Iowa
Sharehold - ing by Other Nominee	％		0	0
	Shares		0	0
Spouse & Dependents Sharehold -ing	％		0	0
	Shares		0	0
Present Shareholding	％		0	0
	Shares		0	0
Shareholding when Elected	％		0	0
	Shares		0	0
Date of Initial Election, Appoint- ment			2014. 07.25	2008. 06.13
Tenure (Years)			2.83 Years	3 Years
Date Elected			2014. 07.25	2014. 06.11
Name			Representative: Chen, Kuan-Pao	Yau, Sea-Wain
Nationality And Registration			Republic of China	Republic of China
Title			Director	Independent Director

Other Managers, Directors or Supervisors Related by Marriage or Within Second-degree kinship of Each Other	Rela- tion		-	-
	Name		-	-
	Title		-	-
Other Position		Officer, John Tung Foundation Member, Administrative Appeal Review Committee, Executive Yuan	-	Vice President, Yuanta Futures Co., Ltd.
Experience & Education			Life Insurance Products Review Committee Member, Insurance Bureau, Financial Supervisory Commission Director, Global Life Insurance Company Master of Science Department of Risk Management and Insurance Georgia State University USA	Pricewaterhouse Coopers- Partner University of Alabama- School of Business- Master of Accountancy
Sharehold - ing by Other Nominee	％		0	0
	Shares		0	0
Spouse & Dependents Sharehold -ing	％		0	0
	Shares		0	0
Present Shareholding	％		0	0
	Shares		0	0
Shareholding when Elected	％		0	0
	Shares		0	0
Date of Initial Election, Appoint- ment			2014. 06.11	2014. 06.11
Tenure (Years)			3 Years	3 Years
Date Elected			2014. 06.11	2014. 06.11
Name			Tsen, Ron-Syou	Chou, Yu-Cheng
Nationality And Registration			Republic of China	Republic of China
Title			Independent Director	Independent Director

CORPORATE GOVERNANCE REPORT 03

1. Major Shareholders of Institutional Shareholders

March 29, 2016

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Name of Major Shareholders of the Institutional Shareholders
Institutional
Shareholders Name Percentage (%)
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Name of Institutional Shareholders	Major Shareholders of the Institutional Shareholders	Major Shareholders of the Institutional Shareholders
	Name	Percentage (%)
Evergreen International Corp.	Chang Yung-Fa Foundation	28.86%
	Chang Kuo-Cheng	16.67%
	Chang Kuo-Hua	12.90%
	Chang Kuo-Ming	12.19%
	Lee Yu-Mei	7.14%
	Chen Hui-Chu	5.81%
	Yang Mei-Chen	5.10%
	Chang Yung-Fa Charity Foundation	5.00%
	Chang Yung-Fa	5.00%
	Tseng Chiung-Hui	1.33%
Ministry of Finance,R.O.C.	Non-profit organization	NA

If the Shareholders of above-mentioned table are corporation, the Principal Shareholders of these corporation are as follows:

March 29, 2016

		Major Shareholders of the Institutional	Major Shareholders of the Institutional
	Name of
		Shareholders
Legal Entity	Institutional

	Shareholders	Name	Percentage (%)


Evergreen International Corp.	Chang Yung-Fa Foundation	Non-profit organization	NA
	Chang Yung-Fa CharityFoundation

Central Reinsurance Corporation Annual Report 2015 20

CORPORATE GOVERNANCE REPORT 03

3. Professional qualifications and independence analysis of directors

	Meet One of the Following Professional Qualification	Meet One of the Following Professional Qualification	Meet One of the Following Professional Qualification
	Requirements, Together with at Least Five Years Work			Independence Criteria(Note)
		Experience
	An Instructor or	A Judge, Public	Have Work
	Higher Position in	Prosecutor, Attorney,	Experience
Criteria	a Department of	Certified Public	in the Areas
	Commerce, Law,	Accountant, or Other	of											Number of Other
	Finance,	Professional or	Commerce,											Public Companies in
	Accounting, or	Technical Specialist	Law,											Which the Individual is
	Other Academic	Who has Passed a	Finance, or											Concurrently Serving
	Department	National	Accounting,	1	2	3	4	5	6	7	8	9	10	as an Independent
	Related to the	Examination and	or Otherwise											Director
Name	Business Needs of	been Awarded a	Necessary
	the Company in a	Certificate in a	for the
	Public or Private	Profession Necessary	Business of
	Junior College,	for the Business of	the
	College or	the Company	Company
	University
Yang, Cheng-Tui														0
Chang, Kuo-Cheng														0
Yau, Sea-Wain														0
Tsen, Ron-Syou														0
Chou, Yu-Cheng														0
Lee, Yi-Fen														0
Chen, Kuan-Pao														0
Tai, Jiin-Chyuan														0
Ku Lai, Mei-Hsueh														0

Note: Please tick the corresponding boxes if directors or supervisors have been any of the following during the two years prior to being elected or during the term of office.

Not an employee of the Company or any of its affiliates.
Not a director or supervisor of any of the Company's affiliates. The same does not apply, however, in cases where the person is an independent director of the Company's parent company, or any subsidiary in which the Company holds, directly or indirectly, more than 50% of the voting shares.
Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings.
Not a spouse, relative within the second degree of kinship, or lineal relative within the fifth degree of kinship, of any of the persons in the preceding three subparagraphs.
Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of outstanding shares of the Company or that holds shares ranking in the top five in holdings.
Not a director, supervisor, officer, or shareholder holding 5% or more of the share, of a specified company or institution that has a financial or business relationship with the Company.
Not a professional individual who is an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that provides commercial, legal, financial, accounting services or consultation to the Company or to any affiliate of the Company, or a spouse thereof. These restrictions do not apply to any member of the remuneration committee who exercises powers pursuant to Article 7 of the “Regulations Governing the Establishment and Exercise of Powers of Remuneration Committees of Companies whose Stock is Listed on the TWSE or Traded on the TPEx“.
Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company.
Not been a person of any conditions defined in Article 30 of the Company Law.
Not a governmental, juridical person or its representative as defined in Article 27 of the Company Law.

21 Central Reinsurance Corporation Annual Report 2015

Spouse or Relatives within the Second Degree Holding Position as Manager	Relation- ship	-	-	-	-	-	-
	Name	-	-	-	-	-	-
	Title	None	None	None	None	None	None
Current Position(s) in Other Companies		None	None	None	None	None	None
Principal Work Experience and Academic Qualifications		1. Executive Vice President, Risk Management Division of Evergreen International Corp. 2. B.B.A. in Maritime Science and Management, National Taiwan Ocean University	1. Senior Vice President, Risk Management Division of Evergreen International Corp. 2. B.S. in Maritime Science, National Taiwan Ocean University	1. Auditor (DSVP), Auditing Division of Central Re 2. B.B.A., Feng Chia University	1. Junior Vice President, Finance Division of Evergreen International Corp. 2. M.B.A., Chung Hua University	1. Junior Vice President, Computer Division of Evergreen International Corp. 2. B.B.A, National Taiwan University	1. Junior Vice President, Accounting Department of Central Re 2. B.B.A, National Chengchi University
Shareholding by Other Nominee	%	0	0	0	0	0	0
	Shares	0	0	0	0	0	0
Spouse & Dependents Shareholding	%	0	0	0	0	0	0
	Shares	0	0	0	0	0	0
Shares Held Directly	%	0	0	0.02	0.01	0	0.07
	Shares	0	0	107,100	33,736	0	404,838
Date of Accession		2006.08.07	2012.07.25	2016.01.01	2006.01.01	2011.01.01	2011.01.01
Name		Juang, Chong-Tsang	Tsai, Bai-Long	Wu, Hsien-Hung	Cheng, Ching-Fen	Chang, Yung-Ning	Chen, Yueh-Ying
Nationality And Registration		Republic of China	Republic of China	Republic of China	Republic of China	Republic of China	Republic of China
Title		President	Executive Vice President	Acting Chief Auditor (SVP)	Executive Vice President	Senior Vice President	Senior Vice President

Spouse or Relatives within the Second Degree Holding Position as Manager	Relation- ship	-	-	-	-	-	-	-
	Name	-	-	-	-	-	-	-
	Title	None	None	None	None	None	None	None
Current Position(s) in Other Companies		None	None	None	None	None	None	None
Principal Work Experience and Academic Qualifications		1. Deputy Senior Vice President, Project Division of Central Re 2. M.B.A. in Actuarial Science, Feng Chia University	1. Senior Vice President, Project Division of Central Re 2. M.B.A., National Taipei University	1. Senior Vice President, Property & Casualty Division of Central Re 2. M.S. in Chemical Engineering, National Cheng Kung University	1. Junior Vice President, Personnel Division of Evergreen International Corp. 2. B.L., National Chung Hsin University	1. Junior Vice President, Investment Department of Central Re 2. B.B.A, National Taiwan University	1. Junior Vice President, Legal & Claim Department of Central Re 2. M.B.A., College of Insurance, New York City, U.S.A.	1. Junior Vice President, Life & Health Department of Central Re 2. B.B.A. in Statistics, National Chengchi University
Shareholding by Other Nominee	%	0	0	0	0	0	0	0
	Shares	0	0	0	0	0	0	0
Spouse & Dependents Shareholding	%	0	0	0	0	0	0	0
	Shares	0	0	0	0	0	0	0
Shares Held Directly	%	0	0.01	0.00	0.00	0	0.05	0
	Shares	0	51,000	227	5,000	0	288,809	0
Date of Accession		2016.01.01	2015.04.01	2015.04.01	2014.06.16	2008.01.01	2013.01.01	2012.01.01
Name		Lin, Yu-Te	Chung, Chih-Hung	Lin, Cheng-Yen	Hsu, Tzu-Cheng	Hsiung, Pei-Ching	Ting, Wen-Cheng	Liu, Yu-Hsueh
Nationality And Registration		Republic of China	Republic of China	Republic of China	Republic of China	Republic of China	Republic of China	Republic of China
Title		Appointed Actuary (SVP)	Senior Vice President	Senior Vice President	Deputy Senior Vice President	Deputy Senior Vice President	Deputy Senior Vice President	Deputy Senior Vice President

CORPORATE GOVERNANCE REPORT 03

Implementation of Corporate Governance

a. The Composition and Operations of the Board of Directors
The Board of Directors consists of nine directors (three independent directors are included).
The Board Meetings were convened seven (7) times in 2015.

The directors’ attendance status is as follows:

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Attendance By Attendance Rate
Title Name Remarks
in Person Proxy in Person (%)
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Title	Name	Attendance in Person	By Proxy	Attendance Rate in Person(%)	Remarks
Chairman	Evergreen International Corp. Representative : Yang,Cheng-Tui	7	0	100 %	None
Vice Chairman	Evergreen International Corp. Representative : Chang, Kuo-Cheng	5	2	71.43%	None
Independent Director	Yau, Sea-Wain	7	0	100 %	None
Independent Director	Tsen, Ron-Syou	7	0	100 %	None
Independent Director	Chou, Yu-Cheng	7	0	100 %	None
Director	Ministry of Finance, R.O.C. Representative: Lee,Yi-Fen	7	0	100 %	None
Director	Ministry of Finance, R.O.C. Representative: Chen,Kuan-Pao	7	0	100 %	None
Director	Evergreen International Corp. Representative: Tai,Jiin-Chyuan	5	2	71.43 %	None
Director	Evergreen International Corp. Representative: Ku Lai,Mei-Hsueh	6	1	85.71 %	None

b. The Composition and Operations of the Supervisor and Audit Committee

1. Audit Committee

(1) The Audit Committee consists of all of the independent directors of the Company. Six regular meetings were convened in 2015.
(2) The members’ attendance status is as follows:

Title					Remark
	Name	Attendance i P	By Proxy	Attendance Rt%
		n erson		ae()
Independent Director	Yau, Sea-Wain	6	0	100 %	None
Independent Director	Tsen, Ron-Syou	6	0	100 %	None
Independent Director	Chou, Yu-Cheng	6	0	100 %	None

Central Reinsurance Corporation Annual Report 2015 24

Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons	None	None
Implementation Status1	Abstract Illustration	The Company has established the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” on Oct/29/2014. The information has been disclosed on the Company’s website.	(1) The dedicated unit of the Company handles stock affairs including legal and non-legal issues according to the existing procedure. All shareholders of the Company are able to ask for our stock service via the hotline, email or the Company’s website. (2) The Company submits a monthly report listing the shareholdings of directors, managers and major shareholders (over 10% shareholdings) to the authorities according to Article 25 of Securities and Exchange Act. Moreover, the Company also discloses the latest
	No
	Yes	○	○
	Evaluation Item	1. Does the company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”?	2. Shareholding structure & shareholders’ rights (1) Does the company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure? (2) Does the company possess the list of its major shareholders as well as the ultimate owners of those shares?

25 Central Reinsurance Corporation Annual Report 2015

Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons		None
Implementation Status1	Abstract Illustration	shareholdings of major shareholders (over 5% shareholdings) and the top ten shareholders on the Company’s annual report. (3) Rules are made to strictly regulate the activities of trading, endorsement and loans between the Company and its affiliates. (4) To protect shareholders’ rights and fairly treat shareholders, the Company has established the internal rules to forbid insiders trading on undisclosed information. The Company has also strongly advocated these rules in order to prevent any violations.	(1) The Company has implemented rules regarding member diversification of the Board. Factors taken into account include, but are not limited to gender, age, cultures, educational background, race, professional experience, skills, knowledge and terms of service. (2) In order for the sound supervision and reinforcement of management, the Company established the Enterprise Risk Management Committee in addition to the Remuneration
	No
	Yes		○
	Evaluation Item	(3) Does the company establish and execute the risk management and firewall system within its conglomerate structure? (4) Does the company establish internal rules against insiders trading with undisclosed information?	3. Composition and Responsibilities of the Board of Directors (1) Does the Board develop and implement a diversified policy for the composition of its members? (2) Does the company voluntarily establish other functional committees in addition to the Remuneration Committee and the

Central Reinsurance Corporation Annual Report 2015 26

Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
Implementation Status1	Abstract Illustration	Committee and the Audit Committee. These functional committees shall be responsible for the Board of Directors. (3) The company has formulated rules and procedures for evaluating the Board’s performance and conducted it since year 2014. The Company uses two methods to evaluate the performance of the Board. i. Self-assessment of Board members: Board members fill in the” Self-Assessment Questionnaire for Board Members” at the end of each year. ii. Assessment of the Board: The dedicated unit of the Company conducts the assessment of the Board’s performance at the end of each year too. (4) The Company evaluates the independence of CPAs annually, ensuring that they are not stakeholders such as a Board member, supervisor, shareholder or person paid by the Company.
	No
	Yes
	Evaluation Item	Audit Committee? (3) Does the company establish a standard to measure the performance of the Board, and implement it annually? (4) Does the company regularly evaluate the independence of CPAs?

27 Central Reinsurance Corporation Annual Report 2015

Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons	None	The Company thoroughly complies with the laws and regulations and the Company’s Articles of Incorporation to deal with stock affairs and convene the shareholders’ meeting effectively.	None
Implementation Status1	Abstract Illustration	The Company provides detailed contact information, including telephone numbers and email addresses in the “Stakeholder Area” section of the corporate website. In addition, personnel are in place to exclusively deal with issues of social responsibility, ensuring that various interested parties have channels to communicate with the Company.	The Company sets up a dedicated unit to handle its stock affairs.	(1) The Company has set up a Chinese/English website (www.centralre.com) to disclose information regarding the Company’s financials, business and corporate governance status. (2) The Company has assigned appropriate persons to handle
	No		○
	Yes	○		○
	Evaluation Item	4. Does the company establish a communication channel and build a designated section on its website for stakeholders, as well as handle all the issues they care for in terms of corporate social responsibilities?	5. Does the company appoint a professional shareholder service agency to deal with shareholder affairs?	6. Information Disclosure (1) Does the company have a corporate website to disclose both financial standings and the status of corporate governance? (2) Does the company have other information

Central Reinsurance Corporation Annual Report 2015 28

Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
Implementation Status1	Abstract Illustration	information collection and disclosure. The Company has established a spokesman system. No investor conference was held in the year 2015.
	No
	Yes
	Evaluation Item	disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)?

29 Central Reinsurance Corporation Annual Report 2015

Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons		Title Name Training hours Study Date Sponsoring Organization Course Independent Director Yau, Sea-Wain 3H 2015/8/27 Securities and Futures Institute TWSE/GTSM Listed Companies Directors and Supervisors Forum-Corporate Ethical Risk Control and Social Responsibility 3H 2015/9/24 Securities and Futures Institute Necessary Risk Management Policies for Business Operation 3H 2015/11/6 Taiwan Corporate Governance Association 2015 Corporate Governance Summit XI Independent Director Tsen, Ron-Syou 6H 2015/6/26 Taiwan Stock Exchange Corporation International Forum on Corporate Governance, Financial Supervision, and Law. 3H 2015/9/24 Securities and Futures Institute Necessary Risk Management Policies for Business Operation 3H 2015/11/24 Taiwan Corporate Governance Association Duties of Independent Directors and Functions of Audit Committee 3H 2016/3/15 Taiwan Corporate Governance Association How to Protect Trade-Secret and Prevent Fraud to Strengthen Corporate Governance Independent Director Chou, Yu-Cheng 3H 2015/1/22 Securities and Futures Institute Corporate Social Responsibility Reports – Seminar on Demonstrating the Value of Sustainable Operation 6H 2015/6/26 Taiwan Stock Exchange Corporation International Forum on Corporate Governance, Financial Supervision, and Law. 3H 2015/9/24 Securities and Futures Institute Necessary Risk Management Policies for Business Operation 3H 2016/1/13 Taiwan Securities Association The Introduction of the Newest Tax Law and Regulation 3H 2016/1/26 Securities and Futures Institute 2016 Corporate Governance Forum – Insider Trading and Corporate Social Responsibility 3H 2016/3/16 Taiwan Securities Association Digital Finance – Challenges, Opportunities and Corporate Governance
Implementation Status1	Abstract Illustration
	No
	Yes
	Evaluation Item

Central Reinsurance Corporation Annual Report 2015 30

Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons		Title Name Training hours Study Date Sponsoring Organization Course Director Lee, Yi-Fen 3H 2015/1/22 Securities and Futures Institute Corporate Social Responsibility Reports – Seminar on Demonstrating the Value of Sustainable Operation 6H 2015/6/26 Taiwan Stock Exchange Corporation International Forum on Corporate Governance, Financial Supervision, and Law. 3H 2015/9/24 Securities and Futures Institute Necessary Risk Management Policies for Business Operation Director Chen, Kuan-Pao 3H 2015/8/27 Securities and Futures Institute TWSE/GTSM Listed Companies Directors and Supervisors Forum- Corporate Ethical Risk Control and Social Responsibility 3H 2015/9/24 Securities and Futures Institute Necessary Risk Management Policies for Business Operation 3H 2015/11/5 Taiwan Corporate Governance Association 2015 Corporate Governance Summit XI 3H 2016/1/26 Securities and Futures Institute 2016 Corporate Governance Forum – Insider Trading and Corporate Social Responsibility Director Tai, Jiin-Chyuan 3H 2015/9/24 Securities and Futures Institute Necessary Risk Management Policies for Business Operation Director Ku Lai, Mei-Hsueh 3H 2015/1/22 Securities and Futures Institute Corporate Social Responsibility Reports – Seminar on Demonstrating the Value of Sustainable Operation 3H 2015/8/27 Securities and Futures Institute TWSE/GTSM Listed Companies Directors and Supervisors Forum- Corporate Ethical Risk Control and Social Responsibility 3H 2015/9/24 Securities and Futures Institute Necessary Risk Management Policies for Business Operation 3H 2015/11/6 Taiwan Corporate Governance Association 2015 Corporate Governance Summit XI
Implementation Status1	Abstract Illustration
	No
	Yes
	Evaluation Item

31 Central Reinsurance Corporation Annual Report 2015

Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons	8. Has the company implemented a self-evaluation report2on corporate governance or has it authorized any other professional organization to conduct such evaluation? If so, please describe the opinion from the Board, the result of self or authorized evaluation, the major deficiencies, suggestions, or improvements. According to the FSC Insurance Bureau correspondence, the insurance companies should complete their own assessment before the end of February and August respectively since year 2014 with regard to the checklist of the Provisions of the Insurance Code of Practice for Corporate Governance. The results of our assessment for the year of 2015 are “Totally Suitable”.	Note：1. Regardless of whether the evaluation item is achieved or not, the company shall state an appropriate explanation. 2. A self-evaluation report is defined as the company assessing its corporate governance evaluation items with appropriate explanations on current corporate operations and implementation.
Implementation Status1	Abstract Illustration
	No
	Yes
	Evaluation Item

Central Reinsurance Corporation Annual Report 2015 32

CORPORATE GOVERNANCE REPORT 03

d. The Composition and Operations of the Remuneration Committee

The Remuneration Committee was established in 2011 and consists of three (3) members.
The duties of the Remuneration Committee are as follows：
(1) Establish and periodically review the performance evaluation and remuneration policy, system, standards, and structure for directors, supervisors and managerial officers.
(2) Periodically evaluate and establish the remuneration of directors, supervisors, and managerial officers.
The Remuneration Committee convened three (3) meetings in 2015. The members' attendance status is as follows：

Title					Remark
	Name	Attendance i P	By P	Attendance R%
		n erson	roxy	ate()
Convener	Yau, Sea-Wain	3	0	100%	None
Member	Tsen, Ron-Syou	3	0	100%	None
Member	Chou, Yu-Cheng	3	0	100%	None

33 Central Reinsurance Corporation Annual Report 2015

		None
Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons

Implementation Status1	Abstract Explanation2	(1) Corporate Social Responsibility Policy of Central Reinsurance Corporation and Corporate Social Responsibility Principal of Central Reinsurance Corporation have established and disclose on our website, http://www.centralre.com/content/information/information09.htm (2) In order that our employees realize the importance of corporate social responsibility, every year we regularly hold a variety of CSR-related courses, such as the business ethics training, personal information protection training, legal & compliance training and internal control training. In addition, we also provide corporate governance and corporate social responsibility trainings or seminars to our employees. (3) The annual performance of corporate social responsibility is prepared by Project Division as Corporate Social Responsibility Report, and accepted by Board of Directors.
	No
	Yes	○
	Evaluation Item	1. Corporate Governance Implementation (1) Does the company declare its corporate social responsibility policy and examine the results of the implementation? (2) Does the company provide educational training on corporate social responsibility on a regular basis? (3) Does the company establish exclusively (or concurrently) dedicated first-line managers authorized by the board to be in charge of proposing the corporate social

Central Reinsurance Corporation Annual Report 2015 34

			None
Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons

Implementation Status1	Abstract Explanation2	(4) We have established fair and rational salary polices in order to recruit and retain talents. The evaluation indicators of employees’ performance include “Work performance”, “Character”, “Knowledge, Experience & Skills” and “Reliability”. If any employee violates laws or relevant internal regulations such as Work Rules, Guidelines for the Adoption of Codes of Ethical Conduct and ethical corporate management standards, the evaluation should also include the aforementioned items, and punishments will be given according to the Work Rules. On the contrary, those who contribute to the Company should also be rewarded according to their contributions.	(1) Energy-saving office equipment and electric equipment are now in widespread use in Central Re to improve energy efficiency. Furthermore, we are actively promoting various paper-saving programs such as using the internet bulletin message and initiative paperless meeting. The thermostat of air conditioning is also set higher in summer.
	No
	Yes		○
	Evaluation Item	responsibility policies and reporting to the board? (4) Does the company declare a reasonable salary remuneration policy, and integrate the employee performance appraisal system with its corporate social responsibility policy, as well as establish an effective reward and disciplinary system?	2.Sustainable Environment Development (1) Does the company endeavor to utilize all resources more efficiently and use renewable materials which have low impact on the environment?

35 Central Reinsurance Corporation Annual Report 2015

		None
Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons

Implementation Status1	Abstract Explanation2	(2) To ensure a sound environmental protection system, Central Re has the action plan for energy efficiency and carbon reduction. We also conduct education and training regularly in the fields of environmental management propaganda. (3) Our specific action plan for energy conservation and carbon reduction are as follows. i. To conduct propaganda regularly for water and electricity conservation. ii. To keep electric equipment in good condition for improvement in energy efficiency and set the thermostat of air conditioning higher in summer. iii. To introduce T5 lamps and turn off the lighting for one hour at noon. iv. To promote paperless office. v. To encourage our staff to use more of public transportation
	No
	Yes
	Evaluation Item	(2) Does the company establish proper environmental management systems based on the characteristics of their industries? (3) Does the company monitor the impact of climate change on its operations and conduct greenhouse gas inspections, as well as establish company strategies for energy conservation and carbon reduction?

Central Reinsurance Corporation Annual Report 2015 36

		None
Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons

Implementation Status1	Abstract Explanation2	(1) In order to protect the employee work to right and eliminate any work discrimination, we not only strictly follow the Employment Service Act and the Act of Gender Equality in Employment, but also regulate all of company’s human resource policies and rules in accordance with the Labor Standards Law. Furthermore, we neither compel our employees to perform work nor hire child workers. (2) We have a grievance hotline and email that provide a channel for employees to express their opinions regarding their work and the overall work environment. We also devise a complaint-handling procedure, in case we get employee’s grievance or complaint cases. The dedicated management unit will handle and investigate as soon as possible. In 2015, there were no grievance or violation cases. (3) In order to ensure the healthy and safe working environment, we concentrate our attention on preventing the occurrence of any occupational hazards, and providing comfortable and clean
	No
	Yes	○
	Evaluation Item	3. Preserving Public Welfare (1) Does the company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights? (2) Has the company set up an employee hotline or grievance mechanism to handle complaints with appropriate solutions? (3) Does the company provide a healthy and safe working environment and organize training on health and safety

37 Central Reinsurance Corporation Annual Report 2015


Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons

Implementation Status1	Abstract Explanation2	workplace. Therefore, we have the relevant standard operating procedures and programme, and authorize the dedicated management unit to be in charge of the related jobs. (4) In order to effectively communicate the issue of our employees’ rights and obligations, we offer the two-way communication channel with employees, such as the face-to-face discussion with the first immediate supervisor, specific email, and monthly meeting. If there are any significant changes in operations, we will adopt all open and reasonable ways in advance to inform our employees, and reduce any impact on them as far as possible. (5) In order to enhance the work efficiency and the career development of our employees, we have established a variety of personal and professional curricula. We always provide our employees with training courses related to (re)insurance, finance, risk management, and so on. There were 325 attendances in 2015. At the same time, we constantly inspire our employees to obtain the professional certifications and licenses of the non-life and life insurance and financial related exams held by domestic and
	No
	Yes
	Evaluation Item	for its employees on a regular basis? (4) Does the company setup a communication channel with employees on a regular basis, as well as reasonably inform employees of any significant changes in operations that may have an impact on them? (5) Does the company provide its employees with career development and training sessions?

Central Reinsurance Corporation Annual Report 2015 38


Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons

Implementation Status1	Abstract Explanation2	international institutions. (6) Central Re is the reinsurance company, and offers the related reinsurance services to our clients. We also set up a communication channel with our client. If they have any question, they can obtain information and solutions via the company website, email and hotline. (7) This item is not applicable, since Central Re is a reinsurance company. (8) This item is not applicable, since Central Re is a reinsurance company. (9) This item is not applicable, since Central Re is a reinsurance company.
	No
	Yes
	Evaluation Item	(6) Does the company establish any consumer protection mechanisms and appealing procedures regarding research development, purchasing, producing, operating and service? (7) Does the company advertise and label its goods and services according to relevant regulations and international standards? (8) Does the company evaluate the records of suppliers’ impact on the environment and society before taking on business partnerships? (9) Do the contracts between the company and its major suppliers include termination clauses which come into force once the suppliers breach the corporate social responsibility policy and cause appreciable impact on the environment and society?

39 Central Reinsurance Corporation Annual Report 2015

		None
Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons

Implementation Status1	Abstract Explanation2	(1) The Corporate Social Responsibility Report haves been published on both the official website and MOPS. The report was prepared in accordance with the GRI G4 guidelines published in 2013.
	No
	Yes	○
	Evaluation Item	4. Enhancing Information Disclosure (1) Does the company disclose relevant and reliable information regarding its corporate social responsibility on its website and the Market Observation Post System (MOPS)?

Central Reinsurance Corporation Annual Report 2015 40

		None
Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons

Implementation Status1	Abstract Illustration	(1) The Company has established the Ethical Corporate Management Best-Practice Principles to provide high ethical standards for all employees. The principles are disclosed on the company website. When engaging in commercial activities, the Board of Directors and the management shall comply with the principles. Bribery, corruption, deception, and all other forms of improper conduct are prohibited. (2) The Company has established both the Ethical Corporate Management Best-Practice Principles and the Ethical Corporate Management Procedures and Behavior Guidelines to prevent unethical conduct. The aforementioned principles and guidelines were announced and disseminated to employees, managers and Board of Directors to enhance integrity and self-discipline.
	No
	Yes	○
	Evaluation Item	1. Establishment of ethical corporate management policies and programs (1) Does the company declare its ethical corporate management policies and procedures in its guidelines and external documents, as well as the commitment from its board to implement the policies? (2) Does the company establish policies to prevent unethical conduct with clear statements regarding relevant procedures, guidelines of conduct, punishment for violation, rules of appeal, and the commitment to implement the policies?

41 Central Reinsurance Corporation Annual Report 2015

			None
Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons

Implementation Status1	Abstract Illustration	(3) The Company has amended the internal procedures to prevent any unethical conduct especially regarding procurement and investment activities.	(1) The Company engages the reinsurance business. Both the insurance contracts and the reinsurance contracts are utmost good faith contract. Either party of the contract violates the utmost good faith principle, the contract is void. Additionally, the Company includes relevant clauses as appropriate in the business contracts to prevent doing business with those involved in unethical conduct. (2) The Company has assigned the Human Resources Department of Supervisory Division in charge of promotion and execution of the Company’s Ethical Corporate Management Best Practice Principles. The Audit Office has reported annually the related implementation situation to the Board of Directors Meetings and
	No
	Yes		○
	Evaluation Item	(3) Does the company establish appropriate precautions against high-potential unethical conducts or listed activities stated in Article 2, Paragraph 7 of the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies?	2. Fulfill operations integrity policy (1) Does the company evaluate business partners’ ethical records and include ethics-related clauses in business contracts? (2) Does the company establish an exclusively (or concurrently) dedicated unit supervised by the Board to be in charge of corporate integrity?

Central Reinsurance Corporation Annual Report 2015 42


Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons

Implementation Status1	Abstract Illustration	submits reports to the Board of Directors. (3) The Company follows the Company Act, the Securities and Exchange Act, Business Entity Accounting Act, Political Donations Act, Law Against Accepting Bribes Act, Government Procurement Act, Act on Recusal of Public Servants Due to Conflicts of Interest and other relevant regulations for listed companies. The Company also provides procedures and mailboxes on the Company’s website to prevent conflicts of interest. (4) The Company has established accounting and internal control systems to ensure integrity in our operations. The internal auditors reviewed annually the implementation situation of the Company’s Ethical Corporate Management Best Practice Principles and reported to the Board of Directors Meetings. The reports also sent to the Company’s CPAs. (5) The Company carries out regular training for employees every year. For new employees, training on ethical rules, conflicts of interest, business morals, and all other related subjects are carried out during their first week of work.
	No
	Yes
	Evaluation Item	(3) Does the company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement it? (4) Has the company established effective systems for both accounting and internal control to facilitate ethical corporate management, and are they audited by either internal auditors or CPAs on a regular basis? (5) Does the company regularly hold internal and external educational trainings on operational integrity?

Central Reinsurance Corporation Annual Report 2015

		None
Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons

Implementation Status1	Abstract Illustration	(1) The Company establishes various reporting channels so that employees and relevant people can report improper business behaviors through the system. After a confidential investigation, anyone who violates the regulations on operational integrity will be punished according to the Company’s regulations on reward and punishment. In cases of illegal conduct, legal actions will be taken as well. (2) The Company’s Ethical Corporate Management Procedures and Behavior Guideline has included procedures and secret mechanism to protect prosecutors and publish the persons violating the policies. (3) The Company takes whistleblower protection seriously since the core purpose is protection from unlawful reprisal for diligent employees who step forward to identify potential wrongdoing. The Company has assigned the Human Resource Department to review and determine appropriate actions against reprisal of complaints.
	No
	Yes	○
	Evaluation Item	3. Operation of the integrity channel (1) Does the company establish both a reward/punishment system and an integrity hotline? Can the accused be reached by an appropriate person for follow-up? (2) Does the company establish standard operating procedures for confidential reporting on investigating accusation cases? (3) Does the company provide proper whistleblower protection?

Central Reinsurance Corporation Annual Report 2015 44

		None
Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons

Implementation Status1	Abstract Illustration	The Company’s Ethical Corporate Management Best-Practice Principles have been posted on the Company’s Chinese / English website and MOPS. The results of the implementation have been reported to the Board of Directors Meetings since year 2014.
	No
	Yes	○
	Evaluation Item	4. Strengthening information disclosure (1) Does the company disclose its ethical corporate management policies and the results of its implementation on the company’s website and MOPS?

45 Central Reinsurance Corporation Annual Report 2015

CORPORATE GOVERNANCE REPORT 03

Material Resolutions of Shareholders Meeting and Board of Directors

Meeting

a. Material Resolutions of Shareholders Meeting

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----- Start of picture text -----

Date Major Resolutions Execution
----- End of picture text -----

Date	MajorResolutions	Execution

May 27, 2015	Approval of the distribution of earnings of the year 2014 1. Cash Dividends: NT$674,730,000. Cash dividend per share NT$1.2. 2. Remuneration to Directors and Superiors: NT$2,878,000. 3. Bonus to Employees: NT$7,141,169.	1. The Board Meeting convened on May 27, 2015 resolved the record date for distribution of cash dividends on June 25, 2015 and payment date on July 17, 2015. 2. The cash dividend was distributed on July 17, 2015.
	Amending Procedures for Transaction of Financial Derivatives.	Related actions on behalf of the Company have been conducted in accordance with revised Procedures for Transaction of Financial Derivatives.

b. Material Resolutions of Board of Directors Meeting


Date	Major Proposals

Feb 11, 2015	(1) To stipulate the date and venue for the 2015 Annual General Meeting of Shareholders. (2) To approve the 2014 year-end bonus to managers. (3) To approve the 2014 year-end bonus to the Chairman and Vice Chairman.
Mar. 25, 2015	(1) To approve the 2014 remuneration to directors and supervisors of the Company. (2) To approve the 2014 bonus to employees. (3) To approve the Business Report of the year 2014. (4) To approve the Financial Statements of the year 2014. (5) To approve the distribution of earnings of the year 2014. (6) To amend the Internal Control System and Internal Audit Implementation Rules, Procedures for Transaction of Financial Derivatives, Policies and Procedures for Transaction and Risk Management of Financial Derivatives. (7) To establish Procedures for Ethical Management and Guidelines for Conduct. (8) To approve the 2014 Internal Control Statement. (9) To discuss lifting the restriction of “non-competition” for the Vice Chairman,Mr. Chang,Kuo-Cheng.

Central Reinsurance Corporation Annual Report 2015 46

CORPORATE GOVERNANCE REPORT 03

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----- Start of picture text -----

Date Major Proposals
----- End of picture text -----

Date	Major Proposals

Apr. 29, 2015	(1) To amend Internal Control System of Shareholder Services. (2) To amend the Corporate Social Responsibility Report of 2014. (3) To donate NTD 300,000 to Chang Yung-Fa Foundation for sponsoring its EvergreenSymphony Orchestraconcert tour in Australia.
May 27, 2015	(1) To amend Procedures for Use of the Company's funds in Special Projects, Public Utilities and Social Welfare Enterprises, and Internal Control System and Internal Audit Implementation Rules. (2) To amend Internal Control and Audit System Information Cycle, and Assessment Program for Information Security of Computerization System. (3) To resolve the record date for distribution of cash dividends is on Jun. 25, 2015 and paymentdateis onJul.17,2015.
Aug. 12, 2015	(1) To approve the Financial Statements of the first half of year 2015. (2) To set up Offshore Insurance Unit. (3) To establish the Corporate Social Responsibility Principles. (4) To amend the Internal Control System and Internal Audit Implementation Rules. (5) Toamendthe Company'sLegalCompliance System.
Oct. 28, 2015	(1) To amend the Process System and Procedure for Handling Assessment of Assets, Claims Overdue, Receivable on Demand and Bad Debts by Central Reinsurance Corporation. (2) To amend the Process Procedures for Investing in Publicly Issued Securities Not Listed on Exchange or OTC Market, and in privately Placed Securities. (3) To approve Headquarters to handle of business of Offshore Insurance Unit. (4) To approve the Risk Appetite and Risk Tolerance. (5) To establish Own Risk and Solvency Assessment Policy of 2015. (6) To appoint Mr. Wu Hsien-Hung, Deputy Senior Vice President, as Acting Chief Auditor.
Dec. 24, 2015	(1) To approve Business Plan and Budget for the year 2016. (2) To approve the result of Self Assessment of Capacity for making Financial Statements. (3) To approve the 2016 Annual Audit Plan. (4) To amend Corporate Governance Principles, Ethical Corporate Management Best Practice Principles, and Procedures for Ethical Management and Guidelines for Conduct. (5) To approve the Offshore Insurance Unit Opening Date is set on Jan. 1, 2016. (6) To approve The Company's Legal Compliance Plan 2016. (7) To establish Procedures for Halt and Resumption Applications. (8) To amend the Internal Control System and Internal Audit Implementation Rules. (9) To renew the Directors’ and Officers’ Liability Insurance. (10) To approve2016 CompensationStructure andPerformanceIncentive

47 Central Reinsurance Corporation Annual Report 2015

CORPORATE GOVERNANCE REPORT 03

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----- Start of picture text -----

Date Major Proposals
----- End of picture text -----

Date	Major Proposals

	System for Managers. (11) To approve the 2016 remuneration for managers. (12) To approve 2016 Compensation Structure and Performance Incentive System for Directors. (13) To approve 2016 remuneration for the Chairman and Vice Chairman. (14) To approve 2016 transportation allowances for the directors. (15) To approve 2016 remuneration and the compensation of functional committee for the Independent Directors.
Jan. 29,2016	(1) To stipulate the date and venue for the 2016 Annual General Meeting of Shareholders (2) To approve the 2015 year-end bonus to managers. (3) Toapprovethe2015 year-end bonustothe Chairman and Vice Chairman.
Mar. 17, 2016	(1) To amend Articles of Incorporation. (2) To amend Compensation Structure and Performance Incentive System for Managers, and re-named it as Regulation of Payment for Managers. (3) To approve 2015 employees' compensation. (4) To amend Compensation Structure and Performance Incentive System for Directors, and re-named it as Regulation of Payment for Directors. (5) To approve 2015 directors' remuneration. (6) To approve the Business Report of the year 2015. (7) To approve the Financial Statements of the year 2015. (8) To approve the distribution of earnings of the year 2015. (9) To approve the 2015 Internal Control Statement. (10) To appoint the Company’s Certified Public Accountants. (11) To appoint Ms. Yeh Shih-Hsuan, Deputy Junior Vice President, as AccountingSupervisor.

Central Reinsurance Corporation Annual Report 2015 48

CORPORATE GOVERNANCE REPORT 03

Information on CPA Professional Fees and Replacement of Certified

Public Accountant

a. Audit Fee

Unit: NT$ thousands

Accounting Firm	Name of CPA	Audit Fee		Non-audit Fee	Non-audit Fee	Non-audit Fee		Period Covered by CPA’s Audit
			System of Design	Company Registration	Human Resource	Others	Subtotal
Pricewaterhouse Coopers, Taiwan	Kuo, Puo-Ju	4,030	-	-	-	-	-	2015/01/01 ~ 2015/12/31
	Lai, Chung-Hsi

The non-audit fee paid to certified CPA, certified Office of CPA and affiliated companies accounts for over 1/4 to audit fee: None.
Alter the CPA Firm and the audit fee in altering year is less than that in the previous year: None.
The audit fee is reduced by over 15% compared with the previous year: None.

b. Replacement of CPA

Regarding the Former CPA

Replacement Date	April 30, 2014(Proposal by the Board of Directors meeting)	April 30, 2014(Proposal by the Board of Directors meeting)	April 30, 2014(Proposal by the Board of Directors meeting)
Replacement reasons and explanations	Due to internal adjustments of PwC Taiwan.
Describe whether the Company terminated or the CPA did not accept the appointment	Parties Status	CPA	The Company
	Termination of appointment	Note	Note
	No longer accepted (continued) appointment	Note	Note
Other issues (except for unqualified issues) in the audit reports within the last two years	Modified Unqualified Opinion of Audit Opinion in 2012, due to starting from January 1, 2013, Central Re prepares the financial statements in accordance with International Financial Reporting Standards, International Accounting Standards, and relevant interpretations and interpretative bulletins developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee (Collectively referred herein as the IFRSs ) as recognized by the Financial Supervisory Commission (hereinafter “FSC”) and the “Rules for the Preparation of Financial Reports by Insurance Institutions” effective in 2013. The Company discloses the relating information in Financial Statements notes in advance prior to the adoption of IFRSs in accordance with Jin-Guan-Pao-Tzai letter No. 10002506141 dated April 15,2011.

49 Central Reinsurance Corporation Annual Report 2015

CORPORATE GOVERNANCE REPORT 03

Yes	-	Accounting principles or practices
	-	Disclosure of Financial Statements
	-	Audit scope or steps
	-	Others
None	Note
Remarks/specifydetails:
None

Note: Due to internal adjustments of PwC Taiwan, the CPAs of Central Re were changed beginning 1[st] Quarter, 2014.

2. Regarding the Successor CPA

2. Regarding the Successor CPA
Name of accounting firm	PricewaterhouseCoopers, Taiwan
Name of CPA	Kuo, Puo-Ju and Lai, Chung-Hsi
Date of appointment	Note
Consultation results and opinions on accounting treatments or principles with respect to specified transactions and the company's financial reports that the CPA might issue prior tothe engagement.	None
Succeeding CPA’s written opinion of disagreement toward the former CPA	None

Note: Due to internal adjustments of PwC Taiwan, the CPAs of Central Re were changed beginning 1[st] Quarter, 2014.

3. Reply of the Previous Accountant：None.

Central Reinsurance Corporation Annual Report 2015 50

CORPORATE GOVERNANCE REPORT 03

Changes in Shareholdings and shares Pledged by Directors, Managers

and Major Shareholders

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----- Start of picture text -----

2015 As of March 29, 2016
Increase Increase
Title Name Increase Increase
(Decrease) (Decrease)
(Decrease) (Decrease)
In In
Share Pledged Share Pledged
Shareholding Shareholding
----- End of picture text -----

Title	Name	2015	2015	As of March 29, 2016	As of March 29, 2016
		Increase (Decrease) In Shareholding	Increase (Decrease) Share Pledged	Increase (Decrease) In Shareholding	Increase (Decrease) Share Pledged
Chairman	Evergreen International Corp.	0	0	0	0
	Representative: Yang, Cheng-Tui	0	0	0	0
Vice Chairman	Evergreen International Corp.	0	0	0	0
	Representative: Chang, Kuo-Cheng	0	0	0	0
Independent Director	Yau, Sea-Wain	0	0	0	0
Independent Director	Tsen, Ron-Syou	0	0	0	0
Independent Director	Chou, Yu-Cheng	0	0	0	0
Director	Ministry of Finance, R.O.C.	(2,907,000)	0	0	0
	Representative: Lee, Yi-Fen	0	0	0	0
	Representative: Chen, Kuan-Pao	0	0	0	0
Director	Evergreen International Corp.	0	0	0	0
	Representative: Tai, Jiin-Chyuan	0	0	0	0
	Representative: Ku Lai, Mei-Hsueh	0	0	0	0
President	Juang, Chong-Tsang	0	0	0	0
Major Shareholder	Ministry of Finance, R.O.C.	(2,907,000)	0	0	0
Major Shareholder	Evergreen International Corp.	0	0	0	0
Executive Vice President	Tsai, Bai-Long	0	0	0	0
Chief Auditor (Note 1)	Ko, Hsiao-Nan	0	0

51 Central Reinsurance Corporation Annual Report 2015

CORPORATE GOVERNANCE REPORT 03

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Title	Name	2015	2015	As of March 29, 2016	As of March 29, 2016
		Increase (Decrease) In Shareholding	Increase (Decrease) Share Pledged	Increase (Decrease) In Shareholding	Increase (Decrease) Share Pledged
Acting Chief Auditor (Note 2)	Wu, Hsien-Hung	0	0	0	0
Executive Vice President	Cheng, Ching-Fen	0	0	0	0
Senior Vice President	Chang, Yung-Ning	0	0	0	0
Senior Vice President	Chen, Yueh-Ying	0	0	0	0
Appointed Actuary	Lin, Yu-Te	0	0	0	0
Senior Vice President	Chung, Chih-Hung	0	0	0	0
Senior Vice President	Lin, Cheng-Yen	0	0	0	0
Deputy Senior Vice President	Hsu, Tzu-Cheng	0	0	0	0
Deputy Senior Vice President	Hsiung, Pei-Ching	0	0	0	0
Deputy Senior Vice President	Ting, Wen-Cheng	0	0	0	0
Deputy Senior Vice President	Liu, Yu-Hsueh	0	0	0	0

Note 1: Ko, Hsiao-Nan retired from Jan. 1, 2016.

Note 2: Wu, Hsien-Hung was appointed as Acting Chief Auditor from Jan. 1, 2016.

Central Reinsurance Corporation Annual Report 2015 52

CAPITAL OVERVIEW 04

IV. CAPITAL OVERVIEW

Source of Capital Stock

a. Issued Share

Unit: thousand shares / NT$ thousands

				Unit:	Unit:	thousand shares / NT$ thousands	thousand shares / NT$ thousands
Month/ Year		Authorized Capital		Paid-in Capital		Remark
							Capital
	Par
							Increased
	Value	Shares	Amount	Shares	Amount	Sources of Capital	by
	(NTD)						Assets

							Other
							than Cash
08/2007	10	600,000	6,000,000	525,000	5,250,000	Capitalization of retained earnings 250,000	-
08/2008	10	600,000	6,000,000	551,250	5,512,500	Capitalization of retained earnings 262,500	-
07/2013	10	600,000	6,000,000	562,275	5,622,750	Capitalization of retained earnings 110,250	-

b. Type of Stock

		Unit:thousand shares /NT$thousands	Unit:thousand shares /NT$thousands	Unit:thousand shares /NT$thousands
		Athid Citl
Share Type		uorze apa		Remarks

	Issued Shares	Un-issued Shares	Total Shares
Common Shares	562,275	37,725	600,000	Based on Total Shares Outstanding as of March30,2016

53 Central Reinsurance Corporation Annual Report 2015

CAPITAL OVERVIEW 04

Shareholders Structure

	As of March 29,2016	As of March 29,2016	As of March 29,2016	As of March 29,2016	As of March 29,2016	As of March 29,2016
					Foreign
			Other	Domestic
	G	Fiil			Iii &
Item	overnment	nanca	Juridical	Natural	nsttutons	Total
	Ai	Iii			Nl
	gences	nsttutons	Person	Persons	atura
					Persons

Number of Shareholders	1	1	39	8,339	39	8,419
Shareholding (shares)	124,632,689	2,020	336,324,359	88,465,549	12,850,383	562,275,000
Percentage	22.17%	0.00%	59.81%	15.73%	2.29%	100%

Diffusion of Ownership and List of Principal Shareholders

a. Diffusion of Ownership (Common Shares)

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As of March 29, 2016
Number of
Range of Shareholdings Number of Shares Holding (%)
Shareholders
----- End of picture text -----

Range of Shareholdings	Number of Shareholders	Number of Shares	Holding (%)

1 - 999	2,693	326,371	0.06
1,000 - 5,000	3,520	7,672,213	1.36
5,001 - 10,000	844	6,158,021	1.10
10,001 - 15,000	422	5,035,753	0.90
15,001 - 20,000	210	3,763,767	0.67
20,001 - 30,000	243	5,907,618	1.05
30,001 - 50,000	190	7,423,205	1.32
50,001 - 100,000	147	10,261,358	1.82
100,001 - 200,000	74	10,107,370	1.80
200,001 - 400,000	39	11,144,132	1.98
400,001 - 600,000	14	6,641,510	1.18
600,001 - 800,000	5	3,273,105	0.58
800,001 - 1,000,000	1	859,877	0.15
1,000,001 and above	17	483,700,700	86.03
Total	8,419	562,275,000	100

Central Reinsurance Corporation Annual Report 2015 54

CAPITAL OVERVIEW 04

b. List of Principal Shareholders

As of March 29, 2016

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Shareholding
Number of Shares Holding (%)
Entity
----- End of picture text -----

b. List of Principal Shareholders	As	of March 29, 201
Shareholding Entity	Number of Shares	Holding (%)

Evergreen International Corp.	197,541,037	35.13
Ministryof Finance,R.O.C.	124,632,689	22.17
Evergreen International Storage & Transport Corp.	48,788,966	8.68
Evergreen Marine Corp.(Taiwan)Ltd.	47,491,873	8.45
EVA Airways Corp.	33,526,675	5.96
EFG Bank	7,337,707	1.31
Chang,Kuo-Cheng	6,541,899	1.16
Tsai,Han-Chang	3,030,076	0.54
Hsiang-Li Investment Corp.	2,610,040	0.46
Jung,Ji-Cheng	1,973,000	0.35

Disclosure of the Share Prices and Related Information for the Past

Two Fiscal Years

Two Fiscal Years	Two Fiscal Years
			NT$
			01/01/2016
Year
	2015	2014	~
Items
			03/30/2016

Market Pricesper Share
Highest	18.00	18.20	15.40
Lowest	13.65	14.15	14.05
Average	16.45	16.00	14.80
Net Worthper Share
Before Distribution	16.63	16.82	NA
After Distribution	(Note)	15.62	NA
Earnings per Share
Weighted Average Shares	562,275,000	562,275,000	NA
Diluted Earnings per Share	1.36	1.55	NA
Adjusted Diluted Earnings per Share	(Note)	1.55	NA
Dividendsper Share
Cash Dividends	(Note)	1.20	NA
Stock Dividends
Dividends from Retained Earnings	(Note)	-	NA
Dividends from Capital Surplus	(Note)	-	NA
Accumulated Undistributed Dividends	(Note)	-	NA

55 Central Reinsurance Corporation Annual Report 2015

CAPITAL OVERVIEW 04

			01/01/2016
Year
	2015	2014	~
Items
			03/30/2016

Return on Investment
Price/Earnings Ratio	11.84	10.23	NA
Price/Dividend Ratio	(Note)	13.21	NA
Cash Dividend Yield Rate	(Note)	7.57%	NA

Note: Earnings distribution for 2015 has not yet been ratified at the stockholders’ meeting as of the reporting date.

Dividend Policy and Earnings Distribution Implementation Status

a. Dividend Policy

Under the Company's Articles of Incorporation, the current year's earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 20% of the remaining amount shall be set aside as legal reserve. Afterwards, the Company shall recognize or reverse special reserve in accordance with regulations, and accumulated unappropriated earnings of the prior period. Appropriation of the remainder shall be proposed by the Board of Directors and resolved by the stockholders.

The Company’s dividends are distributed in the form of cash dividends and stock dividends in a coordinated way, among which, the cash dividends shall account for at least 50% of the total dividends distributed.

b. Earnings Distribution Implementation Status

On March 17, 2016, the Board of Directors proposed that total dividends for the distribution of earnings for 2015 was $393,593 thousand (cash dividend of $0.7 (in dollars) per share). Earnings distribution for 2015 has not yet been ratified at the stockholders’ meeting as of the reporting date.

Central Reinsurance Corporation Annual Report 2015 56

BUSINESS OPERATIONS OVERVIEW 05

V. BUSINESS OPERATIONS OVERVIEW

Business Activities

a. Business Scope

1. Breakdown by Source

NT$ thousands

1. Breakdown by Source NT$ thousands	1. Breakdown by Source NT$ thousands	1. Breakdown by Source NT$ thousands	1. Breakdown by Source NT$ thousands	1. Breakdown by Source NT$ thousands
Gross Premium
	2014		2015
Year
Item	Amount	Percentage	Amount	Percentage
		(%)		(%)

Domestic Non-Life Business	8,422,688	51.51	8,315,563	58.58
Domestic Life Business	6,472,138	39.59	4,361,695	30.73
Subtotal	14,894,826	91.10	12,677,258	89.31
International Non-Life Business	1,385,164	8.47	1,444,541	10.18
International Life Business	69,878	0.43	72,491	0.51
Subtotal	1,455,042	8.90	1,517,032	10.69
Total	16,349,868	100.00	14,194,290	100.00

2. Breakdown By Line

NT$ thousands

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----- Start of picture text -----

Gross Premium
Year 2014 2015
Line Amount Percentage (%) Amount Percentage (%)
----- End of picture text -----

2. Breakdown By Line NT$ thousands	2. Breakdown By Line NT$ thousands	2. Breakdown By Line NT$ thousands	2. Breakdown By Line NT$ thousands	2. Breakdown By Line NT$ thousands
Gross Premium
Year Line	2014		2015
	Amount	Percentage (%)	Amount	Percentage (%)

Fire	1,804,408	11.04	1,688,744	11.90
Marine Hull	271,699	1.66	330,286	2.33
Marine Cargo	420,628	2.57	393,372	2.77
Automobile	3,305,225	20.21	3,319,786	23.39
Aviation	5,081	0.03	3,425	0.02
Engineering	305,696	1.87	261,745	1.84
Miscellaneous Casualty	1,331,595	8.14	1,361,784	9.59
Fish Vessel	23,796	0.15	23,230	0.16
Compulsory Automobile Liability	1,402,150	8.58	1,414,125	9.96
Compulsory Motorcycle liability	884,062	5.41	912,379	6.43
Residential Earthquake	53,512	0.33	51,228	0.36
Life	2,346,284	14.35	2,325,930	16.39
Personal Accident	846,340	5.18	763,239	5.38
Health	3,349,392	20.48	1,345,017	9.48
Total	16,349,868	100.00	14,194,290	100.00

57 Central Reinsurance Corporation Annual Report 2015

BUSINESS OPERATIONS OVERVIEW 05

Further Development of new products, clients and markets
(1) Domestic Non-Life Business

The non-life insurers will be approved to sell three-year term personal accident insurance and health insurance in 2016. Central Re, as the only domestic reinsurer, takes this opportunity to deliver innovative and tailor-made solutions for our clients in the area of product development and underwriting. We work with our clients to grow their profession and business. Such relationship enhancement is beneficial to Central Re in expanding our market share.

(2) Domestic Life Business

To cope with the problems presented by an aging population in Taiwan, Financial Supervisory Commission encourages life insurance companies to develop protection insurance such as annuity, health insurance and long term care insurance, etc. Moreover, life insurance policyholders are allowed to transfer their policies into other categories, such as annuity, health insurance and long term care insurance, etc. The transfers are expected to allow the insured to get compensation while they are still alive and financially benefit more elderly insurance policyholders. The competent authority announced the “Revision of the Standard Definitions of Critical Illnesses,” in 2015. From 2016 onwards, all new products of critical illnesses are categorized in two groups of mild and severe in claims. Accordingly, we provide clients with professional supports such as incidence rates for the new products of critical illnesses with an aim to expanding business opportunities in these fields.

(3) International Non-life Business For International business, China, Japan and South Korea are our core markets and we expand business in these markets with a stable and deliberate attitude. On the other hand, we keep exploring other potential market to diversify and optimize our portfolio.

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b. Industry Overview

1. Market Players

According to statistics released by the Insurance Bureau at the end of 2015, there were 54 insurance companies in Taiwan, of which 29 were life insurance companies, 22 were non-life insurance companies and 3 were reinsurance companies. Out of the 29 life insurance companies, 24 were domestic companies while 5 were branches of foreign companies. The 22 non-life insurance companies include 17 domestic and 5 foreign companies.

			Number	of Insurance Companies in Taiwan over the	of Insurance Companies in Taiwan over the	of Insurance Companies in Taiwan over the	of Insurance Companies in Taiwan over the	Past Five Years	Past Five Years
				Non-Life Insurance				Life		Insurance
				Local		Foreign		Local			Foreign
Year	Total	Reinsurance										Liaison
							Liaison				Branch
												Office
			Headquarter	Branch	Offshore	Branch	Office in	Headquarter	Branch	Offshore	in
					Bh	i Ti				Bh		in
					ranc	n awan	Taiwan			ranc	Taiwan
												Taiwan

2011	57	3	17	164	12	6	9	24	129	13	7	3
2012	57	3	17	164	11	6	9	24	129	13	7	3
2013	56	3	17	164	12	6	9	24	123	13	6	3
2014	54	3	17	165	10	5	8	24	123	13	5	2
2015	54	3	17	165	10	5	8	24	123	13	5	2

Source ： Insurance Bureau, Financial Supervisory Commission

2. Premium Income

The total premium income of the domestic insurance industry during 2015 was NT$3,062,796 million, a rise of 5.49% over the previous year. Non-life insurance premium income accounted for NT$136,119 million, a rise of 2.95% over the previous year. Total life insurance premium income was NT$2,926,677 million, a rise of 5.61% over 2014.

NT$ millions

	NT$millions	NT$millions	NT$millions	NT$millions	NT$millions	NT$millions	NT$millions
	Premium Income over the Past Five Years
			Non-Life		Life
	Insurance Industry
			Insurance		Insurance		Premium Income:

Year				Growth			Non-Life vs. Life
	Amount	Growth Rate	Amount	Rate	Amount	Growth Rate	Insurance
		(%)		(%)		(%)

2011	2,311,204	(4.44)	113,033	6.83	2,198,171	(4.96)	1:19.5
2012	2,598,831	12.44	120,483	6.59	2,478,348	12.75	1:20.6
2013	2,708,436	4.22	124,904	3.67	2,583,532	4.24	1:20.7
2014	2,903,350	7.20	132,220	5.86	2,771,130	7.26	1:21.0
2015	3,062,796	5.49	136,119	2.95	2,926,677	5.61	1:21.5

Source: Taiwan Insurance Institute

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c. Long-term and Short-term Development

Long-term Development
(1) Implement legal compliance, risk management, internal control and corporate governance activities
(2) Uphold sound business ethics, contribute to the insurance market, and fulfillment of corporate social responsibility
(3) Promote our professional image, strengthen employee's training and career development
(4) Focus on providing tailor-made reinsurance solutions to increase customer satisfactions
(5) Cultivate Taiwan market to pursue long term and steady underwriting profit
(6) Prudently expand international business and increase overseas business from direct market
(7) Strengthen capital structure and enhance utilization efficiency of capital
Short-Term Development
(1) Implement corporate governance activities, ethical corporation management and fulfillment of corporate social responsibility
(2) Strengthen capital and financial structure to enhance company's solvency
(3) Business development and capital allocation consider relation between risk and return, and aim to maximize capital allocation efficiency and benefits of shareholders
(4) Adopt a sound investment strategy to achieve our goals of steady revenue and earnings growth
(5) Integrate risk management and operation decisions by means of practicing risk management as a mechanism to enhance the ability of risk governance
(6) Satisfy clients by tailor-made solutions based on their requirements to gain the profitable business
(7) Prudently expand international business to diversify our business portfolio and increase profit

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(8) Maintain client relationships by providing actuarial services, support of new products development, professional seminar, discussion of regulation, etc

Market Overview

a. Breakdown by Region

Breakdown by Region	Breakdown by Region	Breakdown by Region	Breakdown by Region	Breakdown by Region
NT$ thousands
Year	2014		2015
Region		P		Percentage
	Amount	ercentage	Amount
		(%)		(%)

Domestic Inward Business	14,894,826	91.10	12,677,258	89.31
Overseas Inward Business	1,455,042	8.90	1,517,032	10.69
Total	16,349,868	100.00	14,194,290	100.00

b. Market Share

In Taiwan market, our market share at the end of 2015 is as follows.

NT$millions	NT$millions	NT$millions
Year
	Non-Life	Life
Item	Insurance	Insurance

Written Premium	136,119	2,926,677
Outward Premium	44,162	18,569
Cession Rate(%)	32.44	0.63
Central Re's Inward	8,316	4,362
Our Market Share(%)	18.83	23.49

c. Market Development

Domestic Non-Life Business

The growth of new car sale and increase of auto third party liability premium rate will benefit to the growth of auto insurance market. In view of slight economic growth of domestic market and several self-discipline measures introduced to insurance market, it is likely to grow slightly in premium income and underwriting profit in 2016.

Domestic Life Business

Facing the aging population with fewer children, the competent authority encourages life insurance companies to develop aging-society care and nursing-related insurance products and strengthen the promotion of such products with a wide range of insurance protection. Moreover, the competent authority has further relaxed restrictions by approving more products to be sold via internet and life insurance companies have offered electronic

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insurance policies to expand the insurance scope in e-commerce. With types of protection products more diversified and sales channels more convenient, reinsurance business will have room to grow.

3. International Non-life Business

After several catastrophes in 2011 such as Japan Tohoku Earthquake, Christchurch Earthquake and Thailand Flood, the renewal prices had substantially increased, with terms improved in the following years. At the same time, more and more new underwriting capacity were accumulated and injected into the market. However, with less natural perils activities over recent years, global market insurance losses were considerably reduced and excessive underwriting capacity were accumulated. The reinsurance pricing remains soft and competition are heating up. As a result, the profit margins of some insurance and reinsurance companies were affected. If no severe catastrophe occurs in the near future, this trend is expected to continue for a period of time.

Human Resources

Employee data and shares of education degrees are shown as follows:

Year	Year	2014	2015	Data as of March 30,2016
Number of Employees		133	132	130
Average Age		40.73	40.42	40.54
Average Years of Service		9.96	10.28	10.30
Education (%)	Masters	45.11	43.94	43.85
	University or College	54.14	55.30	55.38
	Others	0.75	0.76	0.77

Note: The number of full-time employees includes 2 people, who applied the parental leave without pay till March, 2016.

Labor Relations

a. Employee welfare and labor agreements

Employee benefit plans

Central Re offers annual leaves, employee insurances, physical examinations, employee bonus and compensations, and all kinds of subsidies in accordance with labor related regulations. In additional, we have instituted the employee welfare committee to facilitate the promotion of employee welfare. The detailed information related employee benefits kindly refer to Chinese annual report.

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Continuing education and training
We have established a variety of personal and professional curricula to enhance the work efficiency and the career development of our employees. In 2015, it totals 352 person-times to participate in various domestic (re)insurance, finance, or risk management courses. And we also constantly inspire our employees to obtain the professional certifications and licenses of the non-life and life insurance and financial related exams held by domestic and international institutions. Kindly refer to the page 5.
Retirement systems
According to Labor Standards Law and the labor pension related regulations, Central Re continuously appropriates labor retirement reserve fund each month and deposit in the Bank of Taiwan. Meanwhile, we also instituted the pension fund monitoring committee to administer this retirement fund.
After enforcing of Labor Pension Act, the amount of labor pension borne by the company is six percent of the monthly wages for employees applicable to the Labor Pension Act.
Labor-management agreements
To maintain harmonious labor relations, Central Re regularly holds Labor Management Meetings to efficiently and effectively communicate with employees.
b. List any loss sustained as a result of labor disputes, disclose an estimate of losses incurred to date or likely to be incurred in the future, and indicate mitigation measures being or to be taken
In the most recent years and as of date of the publication of the annual report, there are no other critical labor disputes to incur loss.
Due to the complete management system and the harmonious labor relationship, we expect there would be no loss resulting from labor dispute in future.
c. Employee behavior/ethical standards & Employee safety and sanitary policy
Central Re has established policies and rules as a guide for employee conduct, rights, responsibilities, and ethical standards.
(1) Working Rules: Central Re’s working rules clearly define the rights and obligations of management and labor.
(2) Code of Conduct: Central Re has a code of ethical conduct that all directors,

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managers and employees are expected to adhere to and advocate in accordance with the highest ethical standards.

Employee safety and sanitary policy: Central Re’s employee safety and sanitary policy is posted on the intranet and is summarized as follows.
(1) Guards and security systems have been installed at all main base stations and work offices to protect staff, property and information security.
(2) The fire drill and labor safety training are conducted periodically according to disaster prevention and protection plan to reduce risks of employee injury and property loss from natural disasters.
(3) The Prevention Policy of Sexual harassment and its advocacy have been announced on the intranet with a complaints procedure set up.
(4) Labor Safety and Hygiene Rules and its annual management plan have been made and followed.
(5) Energy-saving policies have been established to reduce carbon emissions.

Important Contracts

a. Non-life Business

Type of Contract	Counterparty	Period	Major Contents	Restrictions
Reinsurance Contracts	Domestic and overseas non-life insurance companies	2015.1.1-2015.12.31	Non-life reinsurance inward businesses	Some contracts include exclusion clauses
	Overseas non-life insurance companies	2015.4.1-2016.3.31	Non-life reinsurance inward businesses	Some contracts include exclusion clauses
Retrocession Contracts	Domestic and overseas non-life insurance companies	2015.1.1-2015.12.31	Non-life reinsurance outward businesses	Some contracts include exclusion clauses
	Overseas non-life reinsurance companies	2015.1.1-2015.12.31	Non-life reinsurance outward businesses	Some contracts include exclusion clauses
	Overseas non-life reinsurance Companies	2015.1.1-2015.12.31	Non-life reinsurance inward businesses	some contracts include exclusion clauses
	Overseas non-life reinsurance Companies	2015.4.1-2016.3.31	Non-life reinsurance inward businesses	some contracts include exclusion clauses
Catastrophe Reinsurance Contracts	Overseas non-life reinsurance companies	2015.2.1-2016.1.31	To protect our net retention excess catastrophe losses	The contracts include exclusion clauses

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b. Life Business

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Type of Counterparty Period Major Contents Restrictions
Contract
----- End of picture text -----

Type of Contract	Counterparty	Period	Major Contents	Restrictions

Reinsurance Contracts	Domestic and overseas life insurance companies	2015.1.1-2015.12.31	Life reinsurance inward businesses	Some contracts include exclusion clauses
Retrocession Contracts (Non-Cat)	Domestic life insurance companies	2015.1.1-2015.12.31	Life reinsurance outward businesses	Some contracts include exclusion clauses
	Overseas life reinsurance companies	2015.1.1-2015.12.31	Life reinsurance outward businesses	Some contracts include exclusion clauses
	Overseas life reinsurance companies	2015.4.1-2016.3.31	Life retrocession inward businesses	Some contracts include exclusion clauses
Catastrophe Reinsurance Contracts (Cat)	Overseas life reinsurance companies	2015.2.1-2016.1.31	To protect our net retention excess catastrophe losses	The contracts include exclusion clauses

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VI. FINANCIAL INFORMATION

Financial Statement for Recent Five Years

a. Condensed Balance Sheets and Statements of Comprehensive Income for the Past Five Fiscal Years

1. Condensed Balance Sheets – Adoption of IFRSs

NT$ thousands

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----- Start of picture text -----

Year From 2011 To 2015 (Note 1)
Items 2015 2014 2013 2012 2011
----- End of picture text -----

		NT$ thousands	NT$ thousands	NT$ thousands	NT$ thousands	NT$ thousands
Year Items		From 2011 To 2015 (Note 1)
		2015	2014	2013	2012	2011
Cash and Cash Equivalents		16,461,567	18,430,910	17,673,887	17,008,182	16,112,004
Account Receivable		248,065	399,901	183,877	310,154	413,625
Financial Assets		11,698,239	9,909,822	9,814,286	9,617,139	8,818,044
Reinsurance Contract Assets		3,455,783	3,859,592	3,877,374	3,490,724	3,776,030
Property and Equipment		213,444	214,772	203,973	207,133	209,550
Intangible Assets		3,786	1,531	2,142	3,438	3,243
Other Assets		1,184,187	1,192,639	1,181,693	1,463,858	1,444,152
Total Assets		33,265,071	34,009,167	32,937,232	32,100,628	30,776,648
Account Payable		425,192	577,906	393,767	852,881	611,588
Financial Liabilities		31,549	66,470	11,785	1,266	0
Insurance Liabilities		23,279,625	23,664,460	23,382,630	23,090,610	22,934,621
Provisions		8,015	5,778	772	0	0
Other Liabilities		171,209	237,637	114,730	161,950	109,867
Total Liabilities	Before Distribution	23,915,590	24,552,251	23,903,684	24,106,707	23,656,076
	After Distribution	(Note 2)	25,226,981	24,578,414	24,382,332	23,656,076
Capital		5,622,750	5,622,750	5,622,750	5,512,500	5,512,500
Capital Reserve		300,000	300,000	300,000	300,000	300,000
Retained Earnings	Before Distribution	3,459,020	3,369,901	3,178,535	2,833,627	2,155,817
	After Distribution	(Note 2)	2,695,171	2,503,805	2,447,752	2,155,817
Other Equity		(32,289)	164,265	(67,737)	(652,206)	(847,745)
Total Equity	Before Distribution	9,349,481	9,456,916	9,033,548	7,993,921	7,120,572
	After Distribution	(Note 2)	8,782,186	8,358,818	7,718,296	7,120,572

Note ：

The above financial statements are prepared in accordance with the “Rules for the Preparation of Financial Reports by Insurance Institutions” effective at January 1, 2013.
Earnings distribution for 2015 has not yet been ratified at the stockholders’ meeting as of the reporting date.

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FINANCIAL INFORMATION 06

2. Condensed Statement of Comprehensive Income – Adoption of IFRSs

NT$ thousands

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----- Start of picture text -----

Year From 2012 To 2015 (Note 1)
Items
2015 2014 2013 2012
----- End of picture text -----

	NT$ thousands	NT$ thousands	NT$ thousands	NT$ thousands
Year Items	From 2012 To 2015 (Note 1)
	2015	2014	2013	2012

Operating Revenue	14,068,010	16,283,563	15,384,494	14,350,515
Gross Profit	1,319,034	1,376,146	1,322,146	1,134,404
Net Operating Income	983,606	1,001,012	944,214	773,699
Non-Operating Income and Expenses	(1,790)	(1)	586	19,947
Income from Continuing Operations before Tax	981,816	1,001,011	944,800	793,646
Income from Continuing Operations after Tax	765,865	870,874	732,090	678,934
Net Income	765,865	870,874	732,090	678,934
Total Other Comprehensive Income for The Year(after tax)	(198,570)	227,224	583,162	194,415
Total Comprehensive Income for The Year	567,295	1,098,098	1,315,252	873,349
Earnings per Share(after tax)(NT$)(Note 2)	1.36	1.55	1.30	1.21

Note ：

The above financial statements are prepared in accordance with the “Rules for the Preparation of Financial Reports by Insurance Institutions” effective at January 1, 2013.
Earnings distribution for 2015 has not yet been ratified at the stockholders’ meeting as of the reporting date.

b. Condensed Balance Sheets and Statements of Income for the Past Five

Financial Years

1. Condensed Balance Sheets – Adoption the GAAP of R.O.C.

NT$ thousands

	NT$ thousands	NT$ thousands
Year	From 2011 To 2012 (Note)
Items	2012	2011
Cash and Cash Equivalents	17,008,182	16,112,004
Account Receivable	2,388,138	2,712,761
Investments	9,617,139	8,818,044
Reinsurance Reserve Assets	1,475,820	1,542,526
Fixed Assets	207,133	209,550
Intangible Assets	3,438	3,243
Other Assets	1,399,128	1,376,355
Total Assets	32,098,978	30,774,483
Account Payable	926,767	605,932
Financial Liabilities	1,266	-
Liabilities Reserves	23,090,610	22,934,621
Other Liabilities	86,954	115,456

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----- Start of picture text -----

Year From 2011 To 2012 (Note)
Items 2012 2011
----- End of picture text -----

Year Items	Year Items	From 2011 To 2012 (Note)	From 2011 To 2012 (Note)
		2012	2011

Total Liabilities	Before Distribution	24,105,597	23,656,009
	After Distribution	24,381,222	23,656,009
Capital		5,512,500	5,512,500
Capital Reserve		300,000	300,000
Retained Earnings	Before Distribution	2,700,597	2,021,229
	After Distribution	2,314,722	2,021,229
Other Adjustments to Stockholders’ Equity		(519,716)	(715,255)
Total Stockholders’ Equity	Before Distribution	7,993,381	7,118,474
	After Distribution	7,717,756	7,118,474

Note ： The above financial statements are prepared in accordance with the “Rules for the Preparation of Financial Reports by Insurance Institutions” effective at January 1, 2011.

2. Condensed Statement of Income – Adoption the GAAP of R.O.C.

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NT$ thousands
Year From 2011 To 2012 (Note 1)
Item 2012 2011
----- End of picture text -----

	NT$ thousands	NT$ thousands
Year Item	From 2011 To 2012 (Note 1)
	2012	2011

Operating Revenue	14,350,515	13,204,985
Gross Profit	1,134,404	476,213
Net Operating Income	774,222	126,900
Non-Operating Income and Gains	19,979	13,135
Non-Operating Expenses and Losses	(32)	(2,943)
Income from Continuing Operations before Tax	794,169	137,092
Income from Continuing Operations after Tax	679,368	120,417
Extraordinary Gain /Loss	0	0
Cumulative Effect of Changes in Accounting Principles	0	37,502
Net Income	679,368	157,919
Earnings per Share(after tax)(NT$)(Note 2)	1.21	0.28

Note ：

The above financial statements are prepared in accordance with the “Rules for the Preparation of Financial Reports by Insurance Institutions” effective at January 1, 2011.
Earnings per share were adjusted retroactively based on the number of shares after distribution for the past years.

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FINANCIAL INFORMATION 06

c. Independent Auditors’ Name and Opinion

Year	CPA Firm	CPA’s Name	Audit Opinion
2015	PricewaterhouseCoopers, Taiwan	Kuo, Puo-Ju Lai,Chung-Hsi	Unqualified Opinion
2014	PricewaterhouseCoopers, Taiwan	Kuo, Puo-Ju Lai,Chung-Hsi	Unqualified Opinion
2013	PricewaterhouseCoopers, Taiwan	Chen, Hsien-I Lee,Hsiu-Ling	Unqualified Opinion
2012	PricewaterhouseCoopers, Taiwan	Chen, Hsien-I Lee,Hsiu-Ling	Modified Unqualified Opinion
2011	PricewaterhouseCoopers, Taiwan	Chen, Hsien-I Lee,Hsiu-Ling	Modified Unqualified Opinion

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Financial Analyses for Recent Five Years

a. Financial Analyses – Adoption of IFRSs

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----- Start of picture text -----

Year From 2012 To 2015 (Note 1)
Items 2015 2014 2013 2012
----- End of picture text -----

Year Items	From 2012 To 2015 (Note 1)	From 2012 To 2015 (Note 1)	From 2012 To 2015 (Note 1)	From 2012 To 2015 (Note 1)
	2015	2014	2013	2012
Operating Ability
Changes in Gross Premiums	(13.18%)	4.47%	8.92%	4.18%
Changes in Reinsurance Claims Paid	(8.70%)	7.45%	0.85%	8.48%
Changes in Retention Premiums	(13.00%)	3.55%	9.99%	4.19%
Profitability
Return on Total Assets	2.28%	2.60%	2.25%	2.16%
Return on Equity	8.14%	9.42%	8.60%	8.98%
Net Investment Gain on Available Fund	1.27%	1.40%	1.59%	2.28%
Return on Investments	1.24%	1.37%	1.55%	2.22%
Retention Combined Ratio(Note 2)	97.75%	106.04%	98.69%	102.62%
Retention Expenses Ratio(Note 2)	32.81%	31.70%	33.94%	32.39%
Retention Loss Ratio(Note 2)	64.94%	74.34%	64.75%	70.23%
Operating Structure
Retention Premiums on Equity	142.04%	161.41%	163.18%	167.66%
Gross Premiums on Equity	151.82%	172.89%	173.24%	179.74%
Net Reinsurance Commission on Equity	1.15%	1.06%	1.08%	1.38%
Insurance Liabilities on Equity	248.99%	250.23%	258.84%	288.85%
Changes in Equity	(1.14%)	4.69%	13.01%	12.27%
Expenses Ratio	32.81%	31.54%	33.78%	32.29%
Analysis of financial ratio in last two years. (If the difference doesn’t exceed 20%, the analysis is not required) 1. Changes in gross premiums and Changes in Retention premiums less than last year：Mainly due to the gross premiums decreased in 2015. 2. Changes in reinsurance claims paid less than last year：Mainly due to reinsurance premium decreased, claims paid decreased accordingly in 2015. 3. Changes in equity less than last year：Mainly due to the changes in unrealized loss on available-for-sale financial assets increased in 2015.

Note :

The above financial analyses are prepared in accordance with the “Rules for the Preparation of Financial Reports by Insurance Institutions” effective at January 1, 2013, and these ratios are the key performance indicators of the company.
Pursuant to Article 3 of the “Regulations for Management of the Reserve for Compulsory Automobile Liability Insurance”, prior to amending legislation on December 31, 2013, the company shall set aside an amount equal to 1% of earned pure premium over the last 12 months as claims reserve for incurred but not reported losses. Effective January 1, 2014, claims reserve for incurred but not reported losses are set aside based on past claim experience and expense using the loss development triangle method,

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FINANCIAL INFORMATION 06

of that amount, 60% and 45% of earned pure premium for reinsurance assumed shall be set aside as claims reserve for incurred but not reported losses of automobile and motor reinsurance assumed under compulsory automobile liability insurance, respectively. The fixed percentage referred to in the preceding paragraph shall be calculated by the professional institution entrusted by the competent authority in accordance with the formulation of premium rates under the Act and the past claim experience and expense of the overall industry using the loss development triangle method. The fixed percentage should then be submitted to the competent authority for approval prior to public announcement.

b. Financial Analyses – Adoption the GAAP of R.O.C.

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Year From 2011 To 2012 (Note)
Items 2012 2011
----- End of picture text -----

Year Items	Year Items	From 2011 To 2012 (Note)	From 2011 To 2012 (Note)
		2012	2011

Operating Ability
Changes in Gross Premiums		4.18%	4.02%
Changes in Reinsurance Claim Paid		8.48%	8.23%
Changes in Retention Premiums		4.19%	4.64%
Profitability
Return on Total Assets		2.16%	0.53%
Return on Equity		8.99%	2.08%
Net Investment Gain on Available Fund		2.65%	0.35%
Return on Investments		2.58%	0.34%
Retention Combined Ratio(Note)		102.62%	103.43%
Retention Expenses Ratio(Note)		32.39%	30.36%
Retention Loss Ratio(Note)		70.23%	73.07%
Operating Structure
	Retention Premiums on Equity	167.67%	180.70%
	Gross Premiums on Equity	179.76%	193.75%
	Net Reinsurance Commission on Equity	1.38%	1.54%
	Insurance Liabilities on Equity	288.87%	318.03%
	Changes in Equity	12.29%	(11.52%)
	Expenses Ratio	32.29%	30.38%

Note ： The financial analyses of the fiscal year of 2012 and 2011 were prepared in accordance with “Rules for the Preparation of Financial Reports by Insurance Institutions” effective at January 1, 2011. These ratios are the key performance indicators of the company.

AI assistant

Central Re — Annual Report 2015

52207_rns_2016-07-28_7df113e6-6f35-42a5-990e-dd0cb4dbef78.pdf

2015

CONTENTS

I. LETTER TO SHAREHOLDERS

Operating Performance in 2015

a. Operating Results

1. Underwriting Operations

2. Financial Situation

3. Credit Ratings

b. Budget Accomplishment

c. Profitability Analysis

d. Research and Development

1. Human Resources Development

Business Plan for 2016

a. Operating Strategies

b. Operating Objective

Development Strategy

External Competitive, Regulatory and Macroeconomic Conditions

a. External Competitive Conditions

b. Regulatory Conditions

c. Macroeconomic Conditions

II. COMPANY PROFILE

Date of Incorporation

Company History

III. CORPORATE GOVERNANCE REPORT

Organization

1. Major Shareholders of Institutional Shareholders

3. Professional qualifications and independence analysis of directors

Implementation of Corporate Governance

b. The Composition and Operations of the Supervisor and Audit Committee

1. Audit Committee

d. The Composition and Operations of the Remuneration Committee

Material Resolutions of Shareholders Meeting and Board of Directors

Meeting

a. Material Resolutions of Shareholders Meeting

b. Material Resolutions of Board of Directors Meeting

Information on CPA Professional Fees and Replacement of Certified

Public Accountant

a. Audit Fee

b. Replacement of CPA

2. Regarding the Successor CPA

3. Reply of the Previous Accountant：None.

Changes in Shareholdings and shares Pledged by Directors, Managers

and Major Shareholders

IV. CAPITAL OVERVIEW

Source of Capital Stock

a. Issued Share

b. Type of Stock

Shareholders Structure

Diffusion of Ownership and List of Principal Shareholders

a. Diffusion of Ownership (Common Shares)

b. List of Principal Shareholders

Disclosure of the Share Prices and Related Information for the Past

Two Fiscal Years

Dividend Policy and Earnings Distribution Implementation Status

a. Dividend Policy

b. Earnings Distribution Implementation Status

V. BUSINESS OPERATIONS OVERVIEW

Business Activities

a. Business Scope

1. Breakdown by Source

2. Breakdown By Line

b. Industry Overview

1. Market Players

2. Premium Income

c. Long-term and Short-term Development

Market Overview

a. Breakdown by Region

b. Market Share

c. Market Development

3. International Non-life Business

Human Resources

Labor Relations

a. Employee welfare and labor agreements

Important Contracts

a. Non-life Business

b. Life Business

VI. FINANCIAL INFORMATION

Central Re Annual Report 2015