TFMI — Annual Report 2021

Dec 9, 2021

Stock Code: 2832

Taiwan Fire & Marine Insurance Co., Ltd.

Financial Statements for The Years Ended 31 December 2021 and 2020 With Independent Auditors’ Report

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Address: 8- 9F., No. 49, Guanqian Rd., Taipei 100, Taiwan (R.O.C) Tel: +886 2 2382 1666

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§ TABLE OF CONTENTS §

ITEM PAGE I. COVER 1 II. TABLE OF CONTENTS 2 III. ICPA’S REPORT 3 ~ 6 IV. BALANCE SHEET 7 V. STATEMENT OF COMPREHENSIVE INCOME 8 ~ 11 VI. STATEMENTS OF CHANGES IN EQUITY 12 VII. STATEMENTS OF CASH FLOWS 13 ~ 14 VIII. NOTES TO FINANCIAL STATEMENT (I) Company Profile 15 (II) Date and Procedure for Authorization of Financial Statements 15 (III) Applicability of Newly Promulgated and Amended Standard Rules and Interpretations 15 ~ 21 (IV) Summary of Significant Accounting Policies 21 ~ 42 (V) Major Sources of Major Accounting Judgments, Estimate and Hypotheses 42 ~ 43 (VI) Important Accounting Items 43 ~ 87 (VII) Related Party Transactions 87 ~ 92 (VIII) Pledged Assets - (IX) Major Contingent Liabilities and Commitments Made under Unrecognized Contracts - (X) Loss of Material Disaster - (XI) Subsequent Events 60 ~ 64 (XII) Others 92 ~ 119 (XIII) Additional Disclosures 1. Information about significant transactions 119 2. Information related to reinvested enterprises 119 ~ 120, 121 ~ 122 3. Information about investment in mainland china 120 4. Information about major shareholders 120, 123 (XIV) Information About Segment 120 IX. LIST OF SIGNIFICANT ACCOUNTING ITEMS 124 ~ 158 X. ICPA’S REVIEW REPORT 159 ~ 160 XI. OTHER DISCLOSURES (I) Description of Business 161 ~ 173 (II) Market Price, Dividend, and Equity Distribution 173 ~ 177 (III) Material Financial Information 177 ~ 182 (IV) Review and Analysis For Financial Position and Performance 183 ~ 185 (V) Information About Replacement of Cpas 185

NOTE NO.

- - - - - - - 1 2 3 4 5 6 ~ 24 25 - - - 18 26 ~ 30 31 31 31 31 32 - - - - - - -

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ICPA’s Report

To Taiwan Fire & Marine Insurance Co., Ltd.:

Audit Opinions

We, as the CPAs, have completed the review of the balance sheets dated December 31 of 2021 and 2020 and the consolidated comprehensive income statement, consolidated statement of changes in equity, consolidated statement of cash flows, and consolidated financial statement from January 1 to December 31 of 2021 and 2020, including summaries of major accounting policies of Taiwan Fire & Marine Insurance Co., Ltd.

As CPAs, we believe that the above-mentioned financial statements, in all major respects, were prepared in compliance with the Regulations Governing the Preparation of Financial Reports by Insurance Enterprises and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), and International Financial Reporting Standards Interpretations Committee’s Interpretations (IFRSIC) and Standing Interpretation Committee’s Interpretative Announcement (SIC) approved and released to take effect by the Financial Supervisory Commission and hence are sufficient to show the financial standing of Taiwan Fire & Marine Insurance Co., Ltd. , its financial performance between December 31, of 2021 and 2020, and its financial performance and cash flows between January 1 and December 31 of 2021 and 2020.

Bases for the Audit Opinions

We followed the Rules Governing the Audit of Financial Statements by Certified Public Accountants and generally accepted auditing rules while performing the audit. The responsibilities of the CPAs under the said standards will be explained further in the section about responsibilities in auditing the consolidated financial statement. Independently governed staff in the accounting firm that the CPAs belong to have followed moral regulations pursuant to professional CPA standards and have remained independent of Taiwan Fire & Marine Insurance Co., Ltd. and fulfilled other responsibilities under said regulations. We believe that sufficient and adequate evidence has been obtained for the audit to serve as the basis for expressing the audit opinions. Key Matters Being Audited

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Key matters being audited refer to the most important matters based on the professional judgment of the CPAs to be included in the audit of the consolidated financial statement of 2021 of Taiwan Fire & Marine Insurance Co., Ltd. Such matters were addressed throughout the audit of the consolidated financial statement and during the formation of audit opinions. The CPAs do not express separate opinions regarding these matters.

Key matters being audited of the 2021 consolidated financial statement of Taiwan Fire & Marine Insurance Co., Ltd. are specified as follows:

Claim reserves

Descriptions for the Key Matters Being Audited

By nature, the claim reserves can be divided as reported but not paid or reported. The former is calculated by claim personnel based on the actual relevant information by insurance categories for each case; the latter is estimated in the manners meeting the actuarial principles by the actuarial personnel based on past claim experience and expenses by insurance categories. The key assumption is the development trend of the actual losses from claims in each accident year, and such trend is established by referring the actual experience of Taiwan Fire & Marine Insurance Co., Ltd.

Considering that the management's calculation of the claim reserves involves estimates, judgment, actuarial method and important hypotheses, any update on related information, deviation from important estimation and judgment, adoption of actuarial method or changes of important hypotheses will be critical to the calculation result of claim reserves. Therefore, it was included into the key audit matters (KAMs).

For the related accounting policies, accounting estimation and estimation uncertainties about the claim reserves, and related disclosure information, please refer to Note 4(12), 4(14), 5, 18, 26, 27 and 28(1) of the Financial Statements.

Responding Audit Procedures

1. To understand the related internal control established by the management for the estimated claim reserves, and test the status of the compliance with the internal control.

2. The actuarial experts of the firm have assisted in the assessment of the reasonableness of the applied actuarial methods and key assumptions. The major procedure is as follows:

3. (1) The actuarial experts of the firm obtained the information from each accident year developed until December 31, 2021 (e.g. the policies with claims and the amounts of claims each year), and regenerated the development trend of losses, estimated loss rate and key assumptions using actuarial methods, in order to assess whether the

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development trend of losses, estimated loss rate and key assumptions applied by Taiwan Fire & Marine Insurance Co., Ltd. are reasonable.

• (2) Based on the regenerated development trend of losses, estimated loss rate and key assumptions, the actuarial experts of the firm has estimated the final insurance claims as of December 31, 2021, while considering the paid claims by Taiwan Fire & Marine Insurance Co., Ltd.as of December 31, 2021, to assess the reasonableness of the claim reserves.

• Take the samples from reported unpaid claims as the information about claim estimate, and check whether the reported unpaid claim reserves estimated in the samples were estimated based on said information about claim estimate.

Responsibilities of Management and Governance Unit in Consolidated Financial Statement

Management is responsible for preparing an adequately expressed consolidated financial statement in accordance with the Regulations Governing the Preparation of Financial Reports by Insurance Enterprises and international financial reporting standards, international accounting standards, interpretations, and interpretation announcements approved and released to take effect by the Financial Supervisory Commission and maintaining the necessary internal controls relevant to the compilation of the consolidated financial statement in order to ensure that no significant untruthful expressions exist in the consolidated financial statement due fraud or error. While preparing the consolidated financial statement, the management is responsible for evaluating the ability of Taiwan Fire & Marine Insurance Co., Ltd. to continue with the operation and disclosing related matters and adopting the accounting basis for continued operation, among others. Unless the management intends to liquidate Taiwan Fire & Marine Insurance Co., Ltd. or discontinue operation or there are no other actually feasible solutions than liquidation or discontinued operation.

The governance unit (including the Audit Committee) of Taiwan Fire & Marine Insurance Co., Ltd. is responsible for supervising the financial reporting process.

CPAs Responsibilities in Auditing Consolidated Financial Statements

We audit the consolidated financial statement in order to be reasonably convinced as to whether the consolidated financial statement as a whole contains major untruthful expressions due to frauds or errors and to issue the audit report. Reasonably convinced is highly convinced. There is no guarantee, however, that existence of significant untruthful expressions in the consolidated financial statement will be detected according to generally accepted auditing standards. Untruthful expressions might have been caused by fraud or errors. If individual values or an overview of

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untruthful expressions can be reasonably expected to affect economic decisions made by users of the consolidated financial statement, they are considered significant.

We apply our professional judgment and keep our professional doubts while performing the audit according to generally accepted auditing standards. The CPAs also perform the following tasks:

1. Identify and evaluate the risk of significant untruthful expressions in the consolidated financial statement due to frauds or errors, design and enforce appropriate responsive policies for determined risks; and collect sufficient and adequate evidence from the audit in order to render audit opinions. Because fraud may involve collusion, forging, intentional omission, untruthful statement, or non-compliance with internal control, the risk associated with undetected significant untruthful expressions caused by fraud is higher than that those caused by errors.

2. Obtain a necessary understanding of internal control concerning the audit in order to design appropriate audit procedures reflective of then-current situation. The purpose, however, is not to effectively express opinions on the internal control of Taiwan Fire & Marine Insurance Co., Ltd.

3. Evaluate the adequacy of accounting policies adopted by the management and the legitimacy of accounting estimates and related disclosures made.

4. Reach a conclusion with regard to the adequacy of the accounting basis adopted to continue with operations used by management and whether significant uncertainties of events or conditions that might result in significant concerns about the ability of Taiwan Fire & Marine Insurance Co., Ltd. to continue with existing operations or that are not in accordance with the evidence obtained from the audit. In the event that it is determined that significant uncertainties exist with such events or conditions, on the other hand, the CPAs must remind users of the consolidated financial statement in their audit report that they should pay attention to related disclosures included in the statement or modify their audit opinions if such disclosures are inappropriate. Conclusions made by the CPAs are based on the evidence from the audit obtained as of the date of the audit report. Future events or conditions, however, are likely to result in the Taiwan Fire & Marine Insurance Co., Ltd. no longer capable of continuing with operation.

5. Evaluate the overall expression, structure, and contents of the consolidated financial statement (including related notes) and whether or not the consolidated financial statement has fairly expressed related transactions and events.

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Communications made by the CPAs with governance units include the planned scope and timing of the audit and significant audit findings (including significant deficiencies found with internal controls during the audit).

The CPAs have also provided the governance units with the declaration on independence that independently governed staff in the accounting firm that the CPAs belong to have followed moral regulations in honor of the profession of CPA and have communicated with the governance units all relationships and other matters considered to be likely to undermine the independence of CPAs (including related safeguard measures).

The CPAs, from the matters communicated with the governance unit, decided key matters to be included in the 2021 consolidated financial statement audit of Taiwan Fire & Marine Insurance Co., Ltd. The CPAs specifies such matters in the audit report unless it is disallowed by law to disclose to the public specific matters or under rare circumstances, the CPAs decide not to communicate specific matters in the audit report as it can be reasonably expected that negative impacts from such communication would be greater than the public interest that will be enhanced.

Deloitte & Touche CPA: Wang-Sheng Lin

CPA: Wen-Ya Hsu

Financial Supervisory Commission Approval No. Jin-Guan-Zheng-Shen-Zi No. 1060023872

Securities and Futures Commission Approval No. Tai-Cai-Zheng-Liu-Zi No. 0920123784

March 18, 2022

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Taiwan Fire & Marine Insurance Co., Ltd. BALANCE SHEET

December 31, 2021 and 2020

Unit: NT$ Thousand

Code 11000 12100 12210 12500 12000 14110 14150 14180 14190 14200 14000 15100 15200 15300 15000 16000 16700 17100 17800 18300 18700 18000 1XXXX Code 21400 21500 21600 21000 21700 23800 24100 24200 24400 24500 24000 27000 28000 25300 25900 25000 2XXXX 31100 32100 32200 32000 33100 33200 33300 33000 34000 3XXXX	ASSETS CASH AND CASH EQUIVALENTS (Note 4, 6 and 25) RECEIVABLES (Note 4 and 7) Notes receivable Premiums receivable Other receivables Total receivables INVESTMENTS Financial assets at fair value through profit or loss (Note 4, 8 and 24) Investment under equity method (Note 4 and 11) Other financial assets - net (Note 12) Financial assets at fair value through other comprehensive income (Note 4, 9, 10 and 24) Investment Properties (Note 4 and 13) Total investments REINSURANCE CONTRACT ASSET (Note 4, 18, 26 and 27) Claim recoverable from reinsurers - net Due from reinsurers and ceding companies Reinsurance reserve asset - net Total reinsurance contract asset PROPERTY AND EQUIPMENT (Note 4 and 14) RIGHT-OF-USE ASSETS (Note 4, 15 and 25) INTANGIBLE ASSETS (Note 4) DEFERRED INCOME TAX ASSETS (Note 4 and 21) OTHER ASSETS Refundable deposits (Note 16) Other assets - others Total other assets TOTAL LIABILITIES AND EQUITY PAYABLES Commissions payable Due to reinsurers and ceding companies Other payable Total payables TAX LIABILITIES FOR THE PERIOD (Note 4 and 21) LEASE LIABILITIES (Note 4 and 15) INSURANCE LIABILITY (Note 4, 18, 26, 27 and 28) Unearned premium reserves Claim reserves Special reserves Premium deficiency reserves Total insurance liabilities RESERVE FOR LIABILITIES (Note 4 and 17) DEFERRED INCOME TAX LIABILITIES (Note 4 and 21) OTHER LIABILITIES Guarantee deposit received (Note 25) Other liabilities - others Total other liabilities Total liabilities EQUITY (Note 4 and 19) Common stock Capital surplus Issuance of common shares in excess of par Treasury stock transactions Total capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		December 31, 2021 Amount ％ $ 4,178,338 20 98,510 1 488,898 2 81,393 - 668,801 3 2,181,023 11 264,896 1 2,381,261 12 5,462,283 26 2,144,347 10 12,433,810 60 24,507 - 153,771 1 1,882,073 9 2,060,351 10 468,963 3 42,588 - 12,073 - 42,781 - 683,645 4 51,625 - 735,270 4 $ 20,642,975 100 $ 179,425 1 385,251 2 337,931 2 902,607 5 31,147 - 61,741 - 3,706,888 18 3,179,573 15 2,147,511 11 13,896 - 9,047,868 44 83,267 1 264,150 1 31,843 - 39,061 - 70,904 - 10,461,684 51 3,622,004 18 1,915 - 97,047 - 98,962 - 2,524,209 12 2,809,168 13 556,232 3 5,889,609 28 570,716 3 10,181,291 49 $ 20,642,975 100		December 31, 2020	December 31, 2020
			Amount $ 4,178,338 98,510 488,898 81,393 668,801 2,181,023 264,896 2,381,261 5,462,283 2,144,347 12,433,810 24,507 153,771 1,882,073 2,060,351 468,963 42,588 12,073 42,781 683,645 51,625 735,270 $ 20,642,975 $ 179,425 385,251 337,931 902,607 31,147 61,741 3,706,888 3,179,573 2,147,511 13,896 9,047,868 83,267 264,150 31,843 39,061 70,904 10,461,684 3,622,004 1,915 97,047 98,962 2,524,209 2,809,168 556,232 5,889,609 570,716 10,181,291 $ 20,642,975		Amount $ 3,684,530 96,108 485,363 83,989 665,460 1,938,689 242,485 2,969,507 4,658,775 2,286,757 12,096,213 21,081 171,016 1,727,274 1,919,371 356,406 45,751 9,957 36,700 727,917 38,331 766,248 $ 19,580,636 $ 139,163 368,995 486,220 994,378 38,823 71,498 3,447,801 2,894,345 2,118,699 7,588 8,468,433 82,378 266,669 34,899 43,025 77,924 10,000,103 3,622,004 1,915 97,047 98,962 2,381,521 2,571,709 797,593 5,750,823 108,744 9,580,533 $ 19,580,636	％
						19 1 2 - 3 10 1 15 24 12 62 - 1 9 10 2 - - - 4 - 4 100 1 2 2 5 - - 17 15 11 - 43 1 1 - 1 1 51 18 - 1 1 12 13 4 29 1 49 100

Subsequent notes are incorporated as part of this individual financial statement.

Chairman: Steve Lee

President: Chao-Feng Chen

Chief Accountant: Pi-Chen Wang

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Taiwan Fire & Marine Insurance Co., Ltd.

Statement of Comprehensive Income

From January 1 to December 31 of 2021 and 2020

Unit: NT$ Thousand, but EPS is NT$

Code OPERATING REVENUES Retained earned premium 41110 Direct insurance premium income (Note 4, 25 and 26) 41120 Reinsurance premium income (Note 4) 41100 Premium revenues 51100 Less: Reinsurance premium outward (Note 4) 51310 Less: Net change in unearned premium reserves (Note 4, 18 and 26) 41130 Total retained earned premium 41300 Reinsurance commission earned (Note 26) 41400 Handing fee earned (Note 26) Net gains on investments 41510 Interest income 41521 Gain on financial assets and liabilities at fair value through profit or loss (Note 20) 41527 Realized gain and losses on financial assets at fair value through other comprehensive income (Note 20) 41540 Share of loss on associates and joint ventures recognized using equity method (Note 11) 41550 Exchange loss - investment (Note 20) 41570 Gain (loss) on investment properties (Note 4, 20 and 25) 41585 Impairment loss on investment assets (Note 4 and 20) 41800 Other operating revenues 41000 Total operating revenues		2021	％ 116 6 122 29 3 90 3 1 2 1 2 - - 1 - - 100		2020	％ 121 8 129 38 4 87 4 1 2 1 3 1 ( 1 ) 2 - - 100	% （％）
		Amount $ 8,699,901 459,096 9,158,997 2,123,854 238,350 6,796,793 230,317 62,088 107,495 75,409 145,211 25,718 17,216 ) 80,938 105 - 7,506,858			Amount $ 6,512,206 430,313 6,942,519 2,063,764 181,242 4,697,513 210,974 60,981 119,700 64,460 143,279 25,596 35,052 ) 108,855 378 2 5,396,686
	(			(			34 7 32 3 32 45 9 2 ( 10 ) 17 1 - ( 51 ) ( 26 ) ( 72 ) ( 100 ) 39

(To be continued)

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(Continued)

Code OPERATING COSTS Retained claims 51200 Claims incurred (Note 4, 25 and 26) 41200 Less: Claims recovered from reinsurers 51260 Total retained claims Movement of insurance liability (Note 4, 18 and 26) 51320 Net change in claims reserves 51340 Net change in special reserves 51350 Net change in premium deficiency reserves 51300 Total net change in insurance liability 51500 Commission expenses (Note 25) 51800 Other operating cost 51000 Total operating costs OPERATING EXPENSES (Note 4, 17, 20 and 25) 58100 Service Expenses 58200 Administrative Expenses 58300 Employee training expenses 58400 Impairment loss and reversal gain on expected credit - non- investment 58000 Total operating expenses 61000 OPERATING INCOME 59000 NON-OPERATING INCOME AND EXPENSES 62000 PROFIT BEFORE INCOME TAX FROM CONTINUING OPERATION 63000 INCOME TAX (Note 4 and 21) 66000 NET PROFIT FOR THE PERIOD		2021	％ 65 9 56 2 - - 2 18 1 77 12 5 - 1 18 5 - 5 - 5		2020	％ 58 15 43 2 - - 2 16 1 62 16 8 - - 24 14 - 14 1 13	% （％）
		Amount $ 4,865,594 667,067 4,198,527 151,237 28,812 6,308 186,357 1,343,784 52,955 5,781,623 888,637 391,582 3,710 34,009 1,317,938 407,297 3,856) 403,441 30,233 373,208			Amount $ 3,128,035 773,116 2,354,919 117,642 23,250 ) 434 94,826 860,444 52,327 3,362,516 860,052 390,829 3,922 8,968 1,263,771 770,399 2,540 772,939 85,344 687,595
	(			(			56 ( 14 ) 78 29 224 1,353 97 56 1 72 3 - ( 5 ) 279 4 ( 47 ) ( 252 ) ( 48 ) ( 65 ) ( 46 )

(To be continued)

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(Continued)

Code OTHER COMPREHENSIVE INCOME Items that will not be reclassified subsequently to profit or loss 83110 Remeasurement of defined benefit plans 83180 Less: Income tax relating to items that will not be reclassified subsequently to profit or loss 83190 Equity instruments valuation profit or loss measured at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss 83290 Debt instrument profit or loss measured at fair value through other comprehensive income 83000 Other comprehensive income, net of income tax 85000 TOTAL COMPREHENSIVE INCOME IN THE PERIOD EARNINGS PER SHARE (Note 22) 97500 Basic EPS 98500 Diluted EPS		2021	％ - - 9 ( 1) 8 13		2020	％ - - 2 1 3 16	% （％）
		Amount $ 3,145 ) 629 ) 668,937 38,474) 627,947 $ 1,001,155 $ 1.03 $ 1.03			Amount $ 1,214 243 131,256 35,038 167,265 $ 854,860 $ 1.90 $ 1.89
	( ( (						( 359 ) ( 359 ) 410 ( 210 ) 275 17

Subsequent notes are incorporated as part of this individual financial statement.

President: Chao-Feng Chen

Chief Accountant: Pi-Chen Wang

Chairman: Steve Lee

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Taiwan Fire & Marine Insurance Co., Ltd.

STATEMENTS OF CHANGES IN EQUITY

From January 1 to December 31 of 2021 and 2020

Unit: NT$ Thousand

Code A1 Balance at January 1, 2020 Appropriation of 2019 earnings B1 Appropriation of Legal reserve B5 Cash dividends distributed by the Company B3 Appropriation of special reserves D1 Net profit for 2020 D3 Other comprehensive loss for 2020 D5 Total comprehensive income for 2020 Q1 Disposal of equity instruments measured at fair value through other comprehensive gains and losses/Disposal of equity instruments measured at fair value through other comprehensive gains and losses by associates Z1 Balance at December 31, 2020 Appropriation of 2020 earnings B1 Appropriation of Legal reserve B5 Cash dividends distributed by the Company B3 Appropriation of special reserves D1 Net profit for 2021 D3 Other comprehensive loss for 2021 D5 Total comprehensive income for 2021 Q1 Disposal of equity instruments measured at fair value through other comprehensive gains and losses/Disposal of equity instruments measured at fair value through other comprehensive gains and losses by associates Z1 Balance at December 31, 2021		Capital $ 3,622,004 - - - - - - - 3,622,004 - - - - - - - $ 3,622,004		Capital surplus $ 98,962 - - - - - - - 98,962 - - - - - - - $ 98,962			Retained earnings	Retained earnings	Unappropriated earnings $ 756,029 ( 139,252 ) ( 362,201 ) ( 156,158 ) 687,595 971 688,566 10,609 797,593 ( 142,688 ) ( 398,421 ) ( 237,459 ) 373,208 ( 2,516) 370,692 166,515 $ 556,232	Other Equity (Note 19) Unrealized Gain and Losses on Financial Assets at Fair Value Through Other Comprehensive Income ( $ 46,941 ) - - - - 166,294 166,294 ( 10,609) 108,744 - - - - 630,463 630,463 ( 168,491) $ 570,716	Stockholders’Equity	Stockholders’Equity
						Legal reserve $ 2,242,269 139,252 - - - - - - 2,381,521 142,688 - - - - - - $ 2,524,209		Special reserve $ 2,415,551 - - 156,158 - - - - 2,571,709 - - 237,459 - - - - $ 2,809,168
									( ( ( ( ( ( (	( ( (	( ( (	$ 9,087,874 - 362,201 ) - 687,595 167,265 854,860 - 9,580,533 - 398,421 ) - 373,208 627,947 1,001,155 1,976) $ 10,181,291

Subsequent notes are incorporated as part of this individual financial statement.

President: Chao-Feng Chen

Chief Accountant: Pi-Chen Wang

Chairman: Steve Lee

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Taiwan Fire & Marine Insurance Co., Ltd.

STATEMENTS OF CASH FLOWS

From January 1 to December 31 of 2021 and 2020

Unit: NT$ Thousand

Code CASH FLOWS FROM OPERATING ACTIVITIES A00010 Net Income before income tax from continuing operation A20010 Adjustments to reconcile profit (loss) A20100 Depreciation expense A20200 Amortization expenses A21300 Dividends income A20400 Net (gain) loss on financial assets and liabilities at fair value through profit or loss A20450 Net gain on financial assets and liabilities at fair value through other comprehensive income A20900 Interest expense A21200 Interest income A21400 Net changes in insurance liabilities A21830 Reversal gain on expected credit- investment A21850 Impairment loss on non-investment assets A22300 Share of gain on associates and joint ventures recognized using equity method A22500 Loss from disposal and scrapping of property and equipment A22700 Gain on disposal of investment properties A23800 Impairment reversed benefits of reinsurance financial assets A24100 Unrealized loss on foreign currency exchange A29900 Lease Modification Gains A29900 Other non-operating income A50000 Changes in Operating Assets and Liabilities A51110 Decrease (Increase) in notes receivable A51120 Premiums receivable increase A51130 Other accounts receivable decrease A51140 Increase in financial assets at fair value through profit or loss A51141 Increase of financial assets at fair value through other comprehensive income A51160 Decrease (increase) in other financial assets	2021 $ 403,441 58,968 5,543 ( 151,752 ) ( 67,060 ) ( 1,808 ) 1,621 ( 107,495 ) 424,707 ( 105 ) 34,009 ( 25,718 ) - ( 3,688 ) ( 71 ) 12,378 ( 7 ) ( 49 ) ( 2,426 ) ( 37,064 ) 7,046 ( 175,879 ) ( 167,926 ) 588,646	2020
		$ 772,939 58,854 3,226 ( 149,480 ) ( 54,205 ) ( 4,054 ) 1,661 ( 119,700 ) 276,068 ( 378 ) 8,968 ( 25,596 ) 157 ( 32,206 ) ( 3,973 ) 31,331 ( 32 ) - 24,929 ( 87,304 ) 5,985 ( 119,132 ) ( 136,205 ) ( 12,157 )

(To be continued)

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(Continued)

Code A51170 Decrease (Increase) in reinsurance contract asset A51990 Increase in other assets A52120 Decrease in Claims Payable A52140 Increase in commissions payable A52150 Increase (decrease) in due to reinsurers and ceding companies A52160 Increase (decrease) in other payables A52200 Decrease in employees’ benefit liability A52990 Increase (Decrease) in Other Liabilities A33000 Cash inflow from operations A33100 Interest received A33200 Dividends received A33500 Income tax paid AAAA Net cash inflow from operating activities CASH FLOWS FROM INVESTING ACTIVITIES B02700 Payments for property and equipment B03800 Decrease in refundable deposits B04500 Payments for intangible assets B05400 Payments for investment properties B05500 Proceeds from disposal of investment properties BBBB Net cash inflow from investing activities CASH FLOWS FROM FINANCING ACTIVITIES C03100 Decrease in guarantee deposits received C04020 Repayment of the principal of the lease liabilities C04500 Distribute cash dividends CCCC Net cash outflow used in financing activities EEEE CURRENT INCREASE IN CASH AND CASH EQUIVALENTS FOR THE PERIOD E00100 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD E00200 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD		2021 $ 18,898 13,294 ) - 40,164 16,256 148,289 ) 2,256 ) 3,964) 702,826 101,405 154,439 47,855) 910,815 19,412 ) 25,715 7,659 ) 1,697 ) 21,297 18,244 3,056 ) 33,774 ) 398,421) 435,251) 493,808 3,684,530 $ 4,178,338		2020
	( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( (	$ 61,118 ) 7 ) 4,404 ) 13,156 21,437 ) 22,400 535 ) 6,855 394,606 116,338 150,530 126,529) 534,945 10,723 ) 9,327 8,475 ) 424 ) 140,339 130,044 363 ) 33,188 ) 362,201) 395,752) 269,237 3,415,293 $ 3,684,530

Subsequent notes are incorporated as part of this individual financial statement.

Chairman: Steve Lee

President: Chao-Feng Chen

Chief Accountant: Pi-Chen Wang

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Taiwan Fire & Marine Insurance Co., Ltd.

Notes to Financial Statement

From January 1 to December 31 of 2021 and 2020

(Expressed in Thousand New Taiwan Dollars unless specified otherwise)

I. Company profile

Taiwan Fire & Marine Insurance Co., Ltd. (“Company”) was established in March 1948 as a non-life insurer. The products offered by the Company include aviation insurance, fire insurance, marine insurance, casualty insurance, automobile insurance, as well as the reinsurances for the abovementioned insurances. The headquarters is located in Taipei, with 10 branches and dozens of service centers throughout Taiwan. At the establishment, the paid-up capital was 10 million Old Taiwanese Dollars. Through several capital increases, as of December 31, 2021, the paid-up capital is NT$3,622,004 thousand.

The shares of the Company were approved for the public listing by Securities and Futures Commission, Ministry of Finance on June 11, 1997, and on September 30 of the year started the trading.

The financial statements are presented in NT$, the functional currency of the Company.

II. Date and Procedure for Authorization of Financial Statements

The financial statements were approved by the Board of Directors on March 18, 2022.

III. Applicability of newly promulgated and amended standard rules and interpretations

• (I) The amended Regulations Governing the Preparation of Financial Reports by Insurance Enterprises, as well as International Financial Reporting Standards (“IFRS”), International Accounting Standards (“IAS”), International Financial Reporting Interpretations Committee (“IFRIC”) and Standing Interpretations Committee (“SIC”) Interpretations (collectively “IFRSs”) approved and issued to be effective by the Financial Supervisory Commission, MOF are first time applied.

The applications of the amended Regulations Governing the Preparation of Financial Reports by Insurance Enterprises and IFRSs approved and issued to be effective by FSC will not cause any material changes to the accounting policies of the Company.

• (II) IFRSs approved by FSC applied as of 2022

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Newly Issued/ Amended/ Revised Standards and The effective date Interpretations promulgated by IASB “IFRSs Annual Improvement for the Period of 2018– January 1, 2022 (Note 1) 2020” Amendments to IFRS 3, “Reference to the January 1, 2022 (Note 2) Conceptual Framework” Amendments to IAS 16, “Property, Plant and January 1, 2022 (Note 3) Equipment: Proceeds before Intended Use” Amendments to IAS 37, “Onerous Contracts – Cost January 1, 2022 (Note 4) of Fulfilling a Contract”

• Note 1: The amendments to IFRS 9 are applicable to the exchanges of financial liabilities or amendments to terms and conditions incurring during the annual reporting period as of January 1, 2022. The amendments to IAS 41 “Agriculture” are applicable to the measurement of fair value during the annual reporting period as of January 1, 2022. The amendments to IFRS 1 “First-time Adoption of International Financial Reporting Standards (IFRSs)” are applicable retroactively during the annual reporting period as of January 1, 2022.

• Note 2: The amendments are applicable to the merges of enterprises whose annual reporting periods commence as of January 1, 2022.

• Note 3: The amendments are applicable to the plant, property and equipment bringing an asset into the location and condition necessary for it to be capable of operating in the manner intended by the management as of January 1, 2021.

• Note 4: The amendments are applicable to the contracts which have not yet fulfilled all obligations therein by January 1, 2022.

As of the issuing date of the Financial Statement, the Company has evaluated that the amendments to other standards and interpretations were not likely to cause material effects to the financial positions and performance.

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(III) IFRSs issued by IASB but not yet approved and issued to be effective by FSC

I) IFRSs issued by IASB but not yet approved and issue	d to be effective by FSC
Newly Issued/ Amended/ Revised Standards and Interpretations “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”, amendments to IFRS 10 and IAS 28. IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 – Comparative Information” Amendments to IAS 1, “Classification of Liabilities as Current or Non-Current” Amendments to IAS 1, “Disclosure of Accounting Polices” Amendments to IAS 8, “Definition of Accounting Estimates” Amendments to IAS 12, “Deferred Tax Related to Assets and Liabilities Arising from A Single Transaction”	The effective date promulgated by IASB (Note 1)
	To be determined January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) January 1, 2023 (Note 3) January 1, 2023 (Note 4)

Note 1: Unless otherwise expressly remarked, the aforementioned newly promulgated/Amendment/Amended Rules or Interpretation come into effect in the reporting year starting from the specified effective dates.

• Note 2: The annual reporting period beginning after January 1, 2023 is prospectively applicable to this amendment.

• Note 3: The changes in accounting estimates and accounting policies arising during the annual period beginning after January 1, 2023 are retrospectively applicable to this amendment.

• Note 4: Except recognition of the deferred income tax for the temporary differences of lease and decommission obligation on January 1, 2022, the amendments apply to transactions taking place after January 1, 2022.

• IFRS 17 “Insurance Contracts” and Related Amendments

IFRS 17 regulates the accounting treatments for insurance contracts, and will replace IFRS 4 “Insurance Contracts.” The major regulations of IFRS 17 and related amendments include the followings:

Level of Aggregation of Insurance Contracts

The Company shall identify portfolios of insurance contracts. A portfolio comprises contracts subject to similar risks and managed together. Contracts within a

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certain product line would be expected to have similar risks and hence would be expected to be in the same portfolio if they are managed together. The Company shall at least divide the issued insurance portfolios as:

1. A group of contracts that are onerous at initial recognition, if any;

2. A group of contracts that at initial recognition have no significant possibility of becoming onerous subsequently, if any; and

3. A group of the remaining contracts in the portfolio, if any.

The Company shall only divide groups into those including only contracts issued within a year, and shall apply the rules of recognitions and measurements of IFRS 17 to these contracts decided to be issued.

Recognition

The Company shall recognize a group of insurance contracts it issues from the earliest of the following:

1. The beginning of the coverage period of the group of contracts;

2. The date when the first payment from a policyholder in the group becomes due; and

3. For a group of onerous contracts, when the group becomes onerous.

Measurement of the Initial Recognitions

On initial recognition, the Company shall measure a group of insurance contracts at the total of the fulfillment cash flows, and the contractual service margin. The fulfillment cash flows comprise estimates of future cash flows, an adjustment to reflect the time value of money and the financial risks related to the future cash flows, and a risk adjustment for non-financial risk. The contractual service margin represents the unearned profit the entity will recognize as it provides services in the future. The Company shall measure the contractual service margin on initial recognition of a group of insurance contracts at an amount that, unless on the group of insurance contracts that are onerous contracts, results in no income or expenses arising from: (1) the initial recognition of an amount for the fulfillment cash flows; (2) all cash flows from the contracts in the group on the same day; (3) the derecognition at the date of initial recognition of the following items: (a) any assets for insurance acquisition cash flows; and (b) any other assets or liabilities previously recognized for the cash flows related to the group of contracts.

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Subsequent Measuring

The Company shall report the carrying amount of a group of insurance contracts at the end of each reporting period as the sum of the liability for remaining coverage and the liability for incurred claims, comprising the fulfillment cash flows related to past service allocated to the group at that date. The liability for remaining coverage comprises the fulfillment cash flows related to future service and the contractual service margin; the liability for incurred claims, comprising the fulfillment cash flows related to past service. If a group of insurance contracts becomes onerous (or increasingly onerous) when subsequently measured, the losses shall be recognized immediately.

Onerous Contract

An insurance contract is onerous at the date of initial recognition if the fulfillment cash flows allocated to the contract, any previously recognized acquisition cash flows and any cash flows arising from the contract at the date of initial recognition in total are a net cash outflow. The Company shall recognize a loss in profit or loss for the net outflow for the group of onerous contracts immediately, resulting in carrying amount of the liability for the group being equal to the fulfillment cash flows and the contractual service margin of the group being zero. Before reversing the recognized amount of loss, no contractual service margin occurs, and no income from insurance contracts is recognized。.

Premium Allocation Approach

The Company may simplify the measurement of a group of insurance contracts using the premium allocation approach if, and only if, at the inception of the group, alternatively:

1. The Company reasonably expects that such simplification would produce a measurement of the liability measured for remaining coverage for the group that would not differ materially from the one that would be produced; or

2. The coverage period of each contract in the group is one year or less.

The criterion in said (1) paragraph is not met if at the inception of the group an entity expects significant variability in the fulfillment cash flows that would affect the measurement of the liability for remaining coverage during the period before a claim is incurred.

Using the premium allocation approach, the liability for remaining coverage on initial recognition:

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• Is the premium received at initial recognition;

• Minus any insurance acquisition cash flows on the same day; and

• Plus or minus the derecognition at the date of initial recognition of the following items:

• (1) all insurance acquisition cash flow assets; and

• (2) Any other assets or liabilities previously recognized for the cash flows related to the group of contracts.

Subsequently, the liability for remaining coverage will adjust amount of the premiums received in the period plus the amortization of insurance acquisition cash flows, and minus the amount recognized as insurance revenue for services provided, as well as all investment component paid or transferred to the liability for incurred claims.

Discretionary Participation Feature Investment Contract

The discretionary participation feature investment contract refers to the financial instrument free from transfer of significant insurance risk. If the Company issues the discretionary participation feature investment contract and also insurance contract at the same time, such contract shall apply IFRS 17.

Modification and Derecognition

If the terms of an insurance contract are modified, and meet the certain conditions are met as substantial modification, the Company shall derecognized the original contract and recognize the modified contract as a new contract.

An entity shall recognized an insurance contract when, and only when it is extinguished or substantially modified.

Transitional Regulations

As a principle, the Company shall fully apply IFRS 17 retrospectively. However, if this is not practical, the Company may opt to apply the modified retrospective or fair value approach.

The modified retrospective approach refers to that the Company shall achieve the closest outcome to fully retrospective application possible using reasonable and supportable information available without undue cost or effort. If the reasonable and supportable information is not able to be obtained, it shall apply the fair value approach.

By applying the fair value approach, the Company determines the contractual service margin at the transition date as the difference between the fair value of a group of insurance contracts at that date and the fulfillment cash flows measured at that date.

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Re-designation of financial assets

The enterprise which already applies IFRS 9 on the initial application of IFRS 17 may re-designate and re-classify the financial assets that satisfy the requirements referred to in Paragraph C29 of IFRS 17. The enterprise doesn’t need to re-prepare the comparative information to reflect the changes in reclassification of such assets. Therefore, the difference between the previous carrying amount of such financial assets and that on the date of initial application is stated in the initial retained earnings on the date of initial application (or in the appropriate other equities). If the enterprise re-prepares the comparative information, the re-prepared information needs to reflect the requirements imposed by IFRS 9 on the affected financial assets.

Meanwhile, the enterprise which applies IFRS 9 before the initial application of IFRS 17 may choose to apply the Classification overlay to the financial assets derecognized during the comparative period for the initial application of IFRS 17, based on individual financial assets, as if the financial assets were re-classified per the re-designation requirements referred to Paragraph C29 of IFRS 17 in the comparative period.

Except the above mentioned effects, as of the issuing date of the Financial Statement, the Company has been evaluating the effects to the financial positions and performance from the amendments of other standards and interpretations, and these related effects are to be disclosed when such evaluations are completed.

IV. Summary of significant accounting policies

(I) Declaration in compliance

The financial statements are prepared according to the Regulations Governing the Preparation of Financial Reports by Insurance Enterprises and IFRSs approved by FSC. (II) Principles for preparation

The financial statements have been prepared on the historical cost basis except for financial instruments at fair value and net defined benefit liabilities at the present value of defined obligation less fair value of the plan assets.

Fair value measurement may be divided into three levels based on the observability and importance of related inputs:

1. Level 1 inputs: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

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3. Level 2 inputs: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (from price) or indirectly (induced from price).

4. Level 3 inputs: Unobservable inputs for the asset or liability.

5. (III) Classification of Current and Non-current Assets and Liabilities

In the financial reports, the assets and liabilities are classified by their natures, and sorted by the order of the relative liquidity, but not divided as current and noncurrent items.

• (IV) Foreign Currency

The transactions made in the currencies other than the functional currency of the Company (foreign currency) when the financial statements are prepared, have been translated to the functional currency with the exchange rate on the transaction dates.

The items in foreign currencies were converted at the exchange rates closed on each and every balance sheet date. The difference in foreign exchanges incurred by the items of settlement currency items or conversion currency items was recognized as the profit and/or loss for the current of occurrence.

The foreign currencies, non-current items measured at fair values were converted at the exchange rates quoted on the date on which the fair values were determined. The difference in foreign exchange so incurred was entered as the profit and/or loss of the current term. In the event where the change in the fair value was recognized into other comprehensive profit and/or loss, the difference of the foreign exchange so incurred was entered as other comprehensive profit and/or loss.

(V)

The non-current items measured at historical costs were converted based on the exchange rate quoted on the date of transaction and were not converted anew. Investments in associates

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor a joint venture.

The Company applies the Equity Method to the investments in associates.

Under the equity method, on initial recognition the investment in an associate or a joint venture is recognized at cost. The carrying amount is then increased or decreased to recognize the Company’s share of the subsequent profit or loss of the associates and to include that share of the associates’ other comprehensive incomes. Furthermore, the recognition of the changes of equity in the associates is made based on the percentage of shareholding.

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When evaluating impairments, the entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. The recognized impairment losses are not to be allocated to any assets, including goodwill, as the components of carrying amount of the investments. Any restoration of the loss in impairment was recognized within the scope of subsequent increase of the recoverable amount.

(VI)

For the profit and/or loss incurred by the Company with the associates in upstream, downstream and side-stream, the Company only recognized those within the scope irrelevant to the associates into the financial reports. Property and Equipment

The property and equipment were recognized at costs. Subsequently thereafter, it measured at the amount of the costs deducted with depreciation and the loss in the accumulated impairment.

Property and equipment are accounted depreciation for each material part individually based on the straight-line method during the durable life span. The Company at least review the estimated durable life span, residual value and depreciation method at the end date of year, prospectively apply the effects from the changes of accounting estimations.

When derecognizing property and equipment, the difference between the net consideration of the disposal and the carrying amount of the asset is recognized in profit and loss.

(VII) Investment Properties

Investment property is property held for earning rents or capital appreciation, or both (including the right-of-use assets which satisfy the definition of investment property). Investment properties also include real estate whose future use are not yet determined currently.

The self-owned investment-property was measured at the initial costs (including transaction costs). Subsequently thereafter, it will be measured at the amount of the costs deducted with the accumulated depreciation and the loss of the accumulated impairment.

The investment property acquired from lease are originally measured at the costs (including the original measured amount of lease liability, the lease payment paid before the lease starts, the original direct cost, and estimate cost for recovery of underlying assets minus the received lease incentives); subsequently, they are

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measured at the costs deducting the accumulated depreciation and the loss of impairment, and the re-measurement of the lease liability is adjusted.

All investment properties are accounted for depreciation based on the straightline method.

The investment property is re-stated as property and equipment based on the face value on the date when it is provided for private use.

The property and equipment and right-of-use assets are re-stated as investment property based on the face value on the date when the private use thereof is ended.

When derecognizing investment-properties, the difference between the net consideration of the disposal and the carrying amount of the asset is recognized in profit and loss.

(VIII) INTANGIBLE ASSETS

1. Individually acquired

The intangible assets with limited useful life individually acquired were measured at costs. Subsequently, they were measured at cost deducted with the amount of accumulated amortization and the loss of the accumulated impairment. Intangible assets are accounted for amortization based on the straight-line method during the durable life span. The Company at least review the estimated durable life span, residual value and amortization method at the end date of year, prospectively apply the effects from the changes of accounting estimations. The intangible assets with uncertain durable life span is carried as the cost minus accumulated impairment losses.

1. Derecognition

When derecognizing intangible assets, the difference between the net consideration of the disposal and the carrying amount of the asset is recognized in profit and loss of the current.

(IX) Impairment on property and equipment, right-of-use assets, investment properties and intangible assets (excluding goodwill).

The Company assessed on each and every balance sheet date whether or not there had been any signs indicating potential impairment on property and equipment, rightof-use assets, investment properties and intangible assets (excluding goodwill). Where any sign of impairment was found existent, the Merging Company estimated the recoverable amount of such assets. In the event that the recoverable amount of individual assets could not be estimated, the Company estimated the recoverable

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amount of the units that yielded cash. If a shared asset may be allocated to cash generating unit on the reasonable and consistent basis, that shall be allocated to individual cash generating unit; if not, it shall be allocated to the smallest group of cash generating unit on the reasonable and consistent basis.

Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount.

Where the loss of impairment was recovered afterward, the carrying amount of the units that yielded cash was adjusted upward to the post-amendment recoverable amount. The carrying amount after increase, nevertheless, should not exceed such assets or the carrying amount resolved by the units that yielded cash had it not recognized the loss of impairment in the preceding fiscal year (deducting the amortization or depreciation). The recovery of the loss in impairment was recognized in profit and/or loss.

(X) Financial Instruments

The financial assets and financial liabilities were recognized onto the Balance Sheet when the Company became a party of the contract of the financial instruments.

Upon initial recognition of financial assets and financial liabilities, if the financial assets or financial liabilities were measured for fair values not through profit and/or loss, the Merging Company measured based on the fair value added with the transaction costs, which could be directly attributed to the acquisition or issuance of the financial assets or financial liabilities. The transaction costs which could be directly attributed to the acquisition or issuance of the financial assets or financial liabilities, which were measured at the fair value, were imaginably recognized as the profit and/or loss.

1. Financial assets

The transaction customs of the financial assets were recognized or excluded on the transaction day accounting basis.

• (1) Categories of measuring

The financial assets held by the Company include financial assets at fair value through profit or loss, bond instruments measured at fair value through other comprehensive income, and equity instruments at fair value through other comprehensive income.

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A. Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are the financial assets measured compulsorily at fair value through profit or loss. The financial assets measured compulsorily at fair value through profit or loss include the equity instruments not assigned by the Company to be measured at fair value through other comprehensive income, and the bond instruments not eligible to be categorized at amortized cost, or at fair value through other comprehensive income.

The financial asset at fair value through profit or loss is measured at fair value, and the profit or loss (from the dividends or interests generated from the financial assets) arising from re-measurement is recognized in profit and loss. For the determination of fair value, please refer to Note 24.

• B. Bond instruments investment measured at fair value through other comprehensive income

Shall the bond instruments investments meet the following two conditions on the same time, they are classified as financial assets at fair value through other comprehensive income:

• a. Being held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and sell financial assets; and

• b. The contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Bond instruments investment measured at fair value through other comprehensive income is measured at fair value. In the movement of carrying amount, the interest income calculated using the effective interest rate method, foreign currency gains or losses and impairment gains or losses are recognized directly in profit or loss. The difference between cumulative fair value gains or losses and the cumulative amounts recognized in profit or loss is recognized in OCI until derecognition, when the amounts in OCI are reclassified to profit or loss.

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C. Equity instruments investment at fair value through other comprehensive income

The Company may opt to designate an equity instrument at FVTOCI is available at initial recognition and is irrevocable, for the equity instrument investments not held for trading nor recognized by merge and acquisition, neither with considerations.

Equity instruments at fair value through other comprehensive income are measured at fair value, and the subsequent movements of the fair value are carried in other comprehensive income, and accumulated in other equity. When disposing investments, the accumulated profit/loss is transferred to the retained earnings directly without reclassified as profit/loss.

The dividends from the equity instruments at fair value through other comprehensive income are recognized in profit/loss when the right of receiving of the Company is confirmed, unless such dividends obviously represents the recovery of part of the investment.

• (2) Impairment of financial assets

At each date of balance sheet, the Company evaluate the financial assets at amortized cost (receivables included), and the impairment loss of bond instruments measured at fair value through other comprehensive income based on the expected credit loss.

The receivables are recognized allowance loss as the higher expected credit losses between from the “Regulations Governing the Procedures for Insurance Enterprises to Evaluate Assets and Deal with Nonperforming/Non-accrual Loans”, or of the lifetime. For other financial assets, the credit risk is evaluated if there is any significant increase after the initial recognition. If not, the allowance loss is recognized based on the expected credit losses of 12 months; if there any significant increases, the allowance loss is recognized based on the expected credit losses of life time.

Expected credit losses as the weighted average of credit losses with the weightings being the respective risks of a default occurring. 12-month expected credit losses are expected credit losses that result from those default events on the financial instrument that are possible within 12

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months after the reporting date. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the life of the financial instruments.

The impairment loss for all financial assets reduce the carrying amount through the allowance account; however, the allowance loss of bond instruments measured at fair value through other comprehensive income is recognized in other comprehensive income without reducing the carrying amount.

• (3) Derecognition of financial assets

The Company would exclude financial assets only in the event where the interests on a contract for financial assets based cash flow ceased to be effective or where it had transferred financial assets and almost all risks and returns of all ownership over the financial assets had been transferred to another enterprise.

On the full derecognition of the investment of debt instrument at fair value through other comprehensive income, the difference between the investment’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is stated as income. On the full derecognition of the investment of equity instruments at fair value through other comprehensive income, the accumulated income is transferred to the retained earnings directly, but not reclassified as income.

1. Equity instrument

The equity instruments issued by the Company are categorized as equity based on the nature of the contract agreement and the definition of the equity instrument.

The equity instruments issued by the Company is recognized based on the acquisition price less direct issuing cost.

1. Financial liabilities

2. (1) Subsequent measuring

All financial liabilities are at the amortized cost based on the effective interest method.

• (2) Derecognition of financial liabilities

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When a financial liability is derecognized, the price difference between its carrying amount and total consideration paid (including any transferred non-cash assets or obligation) shall be stated as income.

(XI) Lending Negotiable Securities

The Company lends negotiable securities through TWSE. The formula of income from lending securities of auction transactions, is to multiply the daily closed price of the underlying negotiable securities one by one and day by the quantity of lending, and then multiply by the fare of completed transaction. The income from security lending is recognized every month, and shall be received by the brokers when the securities are returned.

(XII) Reinsurance contract asset

To limit the amount of loss that may be resulted from some exposures, the reinsurance is conducted according to the business needs and the related insurance laws and regulations. For the ceding reinsurance, the Company is not to reject the obligations to the insured by the excuse that the reinsurer fails to fulfill its obligations.

For the ceding reinsurance business, the reinsurance premium outward is recognized based on the ceding reinsurance contracts. The consideration for the end time of the financial statement shall be consistent with the premium income. When settling, the reinsurance premium outward shall be estimated in a reasonable and systematic manner. The related income (e.g. the commission incomes of reinsurance) are recognized in the same period, and the related reinsurance profit/loss is not deferred.

The reinsurance reserve assets include: ceding unearned premium reserves, ceding claims reserves, ceding liability reserves, ceding premium deficiency reserves, and ceding liability adequacy reserves, and are based on the “Regulations Governing Various Reserves of Insurance Enterprises”, the reinsurance contract, and the right to the reinsurers of the ceding company.

The rights of the Company to the reinsurers are reinsurance contract assets (including reinsurance contract assets, claim recoverable from reinsurers, and net due from reinsurers and ceding companies); these rights shall be evaluated periodically whether impairment occurs or to be unrecoverable. Where objective evidences showing that events of such rights occurring after the initial recognition, may cause the Company unable to recover all the receivable amount under the contract terms, and such events has reliably measured effects to the amount to be recovered from the

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reinsurers, the Company recognizes impairment loss for the shortage of recoverable amount to the book value of the said rights.

• (XIII) The residuals taken over and the rights of subrogation

The residuals taken over by laws due to claim procedure in the direct insurance are recognized based on the evaluation to their fair values. For the right of subrogation to the insured subject obtained by laws, it is recognized when the pursuit of recovery is cleared (the inflow of future economic benefits is very probable), and the amount can be reliably measured.

• (XIV) Insurance liabilities

Various reserves are provided based on the “Regulations Governing Various Reserves of Insurance Enterprises”, “Regulations for the Management of the Various Reserves for Compulsory Automobile Liability Insurance”, “Enforcement Rules for the Risk Spreading Mechanism of Residential Earthquake Insurance”, “Regulations Governing Various Reserves for Nuclear Energy Insurance Operated by Non-Life Insurance Enterprises”, “Regulations Governing Various Reserves for Commercial Earthquake Insurance and Typhoon and Flood Insurance Operated by Non-Life Insurance Enterprises”, as well as “Directions for Strengthening Natural Disaster Insurance (Commercial Earthquake, Typhoon and Flood Insurance) Reserve by NonLife Insurance Enterprises”, and such reserves shall be certified by the appointed actuaries approved by FSC. The basic description of the provision basis for each liability reserves are as follows:

1. Unearned premium reserves

To the unearned valid contracts or the insurance risks not yet eliminated, the unearned premium reserves shall be calculated based un the unearned risks and provided for each insurance.

1. Claim reserves

Based on the past experience and fees by insurance categories, the claim reserves shall be calculated in the manners consistent with the actuarial principles, and the portions that are reported but not paid and unreported shall be provided. The claims reported but not yet paid shall be estimated based on actual information case by case and provided by insurance categories

1. Special reserves

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Based on Article 8, the “Regulations Governing Various Reserves of Insurance Enterprises”, the provided reserves for the self-retain businesses shall include the following:

• (1) Special reserves for material accidents.

• (2) Special reserves for hazard changes.

• (3) Special reserves for other special needs.

Except otherwise regulated, the special reserves that had been provided before January 1, 2011 are still recognized as liability reserves. From January 1, 2011, the new provisions of each year shall be accounted to the special reserves under the shareholders’ equity after deducting income taxes based on IAS 12. The time of accounting is the end of the year. From January 1, 2011, the off-set or recovered amount by laws may be off-set or recovered from the special reserves under the liability reserves. Where the balance of such liability reserves are insufficient to be off-set or recovered, the shortage may be offset or recovered from the special reserves under the shareholders’ equity as the remaining balance after income tax specified in IAS 12.

According to the “Directions for Strengthening Natural Disaster Insurance (Commercial Earthquake, Typhoon and Flood Insurance) Reserve by Non-Life Insurance Enterprises”, issued with Jin-Guan-Bao-Cai-Zi No. 10102515061, November 9, 2012, the Company has not yet complemented the reserves for material accidents for commercial earthquake insurance and typhoon and flood insurance and the special reserves for hazard changes to the full water level with the special reserves accounted under the liabilities, and thus the reserves are not to be transferred to the special reserves. The application of these notes does not materially effects the profit and loss, liability, and equity of shareholders of the Company.

• (1) Special reserves for material accidents

Provided by the ratio of special reserves for material accidents determined by the competent authorities for each insurance category. For the material disasters issued by the Government, when one single accident occurs, the sum of the accumulated retained claims for each insurance category is NT$30 million or more, and the total claim payable of each insurance category of the non-life insurance industry as a whole is NT$2

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billion or more, the special reserves for material accidents may be used for offset.

The special reserves for commercial earthquake insurance and typhoon and flood insurance provided for more than 30 years may be recovered. The special reserves for other accidents at each insurance category provided for more than 15 years, a recovery mechanism may be assess and prepared by the certified actuaries, and submitted to the competent authorities for reference and then further implemented.

• (2) Special reserves for hazard changes

When the amount of the actual claims of each insurance minus the remaining balance of the offset special reserves for material accidents is lower than the expected claims, for commercial earthquake insurance and typhoon and flood insurance, 75% of the difference shall be provided for the special reserves for hazard changes, for other insurance, 15% of the difference shall be provided for the special reserves for hazard changes.

When the amount of the actual claims of each insurance minus the remaining balance of the offset special reserves for material accidents is higher than the expected claims, the excess may be offset against the provided special reserves for hazard changes. Shall the special reserves for hazard changes be insufficient for offsetting, it may be offset with the special reserves for hazard changes of other insurance categories; the category of insurance and the amount for offset shall follow the notes established by the competent authorities, and submitted to the competent authorities for reference.

When the special reserves for hazard changes of commercial earthquake insurance accumulates to more than 18 times of the retained earned premium of the year, the special reserves for hazard changes of typhoon and flood insurance accumulates to more than 8 times of the retained earned premium of the year, the special reserves for hazard changes of personal accident insurance and health insurance accumulates to more than 30% of the retained earned premium of the year, and the special reserves for hazard changes of other insurance accumulates to more than 60% of the retained earned premium of the year, the excess shall be recovered.

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• (3) Special reserves for other special needs

The special reserves for the compulsory personal and commercial automobile liability insurance are based on the “Regulations for the Management of the Various Reserves for Compulsory Automobile Liability Insurance.”

The special reserves for nuclear energy insurance are based on the “Regulations Governing Various Reserves for Nuclear Energy Insurance Operated by Non-Life Insurance Enterprises”.

The special reserves for residential earthquake insurance are based on the “Enforcement Rules for the Risk Spreading Mechanism of Residential Earthquake Insurance” and the “Principles of Accounting Treatment for Residential Earthquake Insurance Provided by Insurance Enterprises.”

According to the “Directions for Strengthening Natural Disaster Insurance (Commercial Earthquake, Typhoon and Flood Insurance) Reserve by Non-Life Insurance Enterprises”, from January 1, 2013, the special reserves for material accidents and the special reserves for hazard changes of the insurance categories other than the compulsory automobile liability insurance, nuclear energy insurance, Policy-supported earthquake insurance, commercial earthquake insurance, and typhoon and flood insurance, and accounted under liability before December 31, 2012, shall be firstly complement the special reserves for material accidents and the special reserves for hazard changes of the commercial earthquake insurance and typhoon and flood insurance to the full water level, and the reserves are accounted under liability. For the special reserves for material accidents and the special reserves for hazard changes of other insurance categories, the excessive balance over the full water level shall be accounted to the special reserves under the shareholders’ equity after deducting income taxes based on IAS 12.

1. Premium deficiency reserves

Where the possible future claims and expenses of the unearned valid contracts or the insurance risks has exceed the provided the unearned premium reserves and the expected future premium incomes, the difference shall be provided for the premium deficiency reserves.

1. Liability adequacy reserves

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Based on the outcomes of liability adequacy test specified in IFRS 4 “Insurance Contract”, if there is any deficiency in the outcomes, the amount of such deficiency shall be provided as the liabilities adequacy reserves.

1. Unqualified reinsurance reserves

The unqualified reinsurance under the “Regulations Governing Insurance Enterprises Engaging in Operating Reinsurance and Other Risk Spreading Mechanisms” on the reinsurance ceded date or the balance sheet date, shall be provided the unqualified reinsurance reserves, and disclosed in notes of the financial statements.

• (XV) Reserve for liabilities

The amount recognized as reserve for liabilities is the best estimate for the repayment obligations on the balance sheet date by considering the risks and uncertainties of such obligations. The reserves for liabilities are measured at the discounted cash flow estimate of the repayment obligations.

When a part or all of the expenditure required for repaying the reserve of liabilities are expected to be reimbursed from the other party, and the reimbursement is almost secured while the amount can be reliably measured, the reimbursement is recognized as asset.

• (XVI) Lease

The Company evaluates if a contract is, or includes a lease on the date when the contract is established.

1. If the Company is the lessor

In an event all risks and remuneration of the ownership of the assets based on the lease terms and conditions were transferred to the lessees in full, such assets were classified as financing leasehold. All other categories of lease were classified as operational lease.

When the Company subleases the right-of-use assets, it judges the classification of sublease based on the right-of-use assets (not the underlying assets).

The lease payment minus lease incentives in the operating leases is recognized as profit within the duration of the relevant lease on the straight-line basis. This is because the initial direct cost arising from operational leases is increased to the carrying amount of the underlying assets, and recognized as expense on the straight-line basis over the lease period. According to the lease

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negotiation with the lessee, the new lease shall apply as of the effective date of the variation of lease.

The variable rents not depending on any index or fares in a lease agreement are recognized as income of the current when it occurs.

When a lease includes both land and buildings elements, the Company assess the classification of each element as a finance lease or an operating lease separately based on if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset to the lessee. The lease payments shall be allocated between the land and the buildings elements in proportion to the relative fair values of the leasehold rights in the land element and buildings element of the lease on the date when the contract is established. If the lease payments can be allocated reliably between these two elements, each element is treated based on the applicable classes of lease. If the lease payments cannot be allocated reliably between these two elements, the entire lease is classified as a finance lease, unless it is clear that both elements are operating leases, in which case, the entire lease is classified as an operating lease.

2.

• If the Company is the lessee

The lease payments applicable to the recognized waived low-valued underlying asset lease and the short-term lease are recognized as expenses on the straight-line basis over the lease period. For all other leases, the right-of-use assets and lease liabilities are recognized from the starting date of leases.

The right-of-use assets are originally measured at the costs (including the original measured amount of lease liability, the lease payment paid before the lease starts, and minus the received lease incentives); subsequently, they are measured at the costs deducting the accumulated depreciation and the loss of impairment, and the re-measurement of the lease liability is adjusted. Unless being qualified for the defined investment oriented property, the right-of-use assets are individually expressed in the balance sheets. Notwithstanding, for recognition and measurement of the right-of-use assets defined as investment property, please refer to (7) investment property accounting policies.

The right-of-use assets on the straight-line basis provide depreciation from the starting date of lease, up to the durable life expires or the lease period expires, the earlier prevails.

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The lease liabilities were measured based on the present value of the lease payment (including fixed payment and indexes or fares determining the lease payments). If the implied interest rate of a lease is easy to be confirmed, the rate is applied to discount the lease payment. If the rate is not easy to be confirmed, the lessee incremental borrowing rate of interest will be applied.

Subsequently, the lease liabilities are measured at the amortized cost under the effective interest method, and the interest expense are allocated during the lease periods. If there is any change in the lease period or the indexes or fares determining the lease payments, the expected amount of payment under the remaining value guarantee, the evaluation of the call option of the underlying assets, or the indexes or fares determining the lease payments will result in changes of future lease payment, the Company remeasures the lease liabilities, and relatively adjusts the right-of-use assets; provided the carrying amount of the right-of-use asset has decreased to zero, the remaining remeasured amount is recognized in the income/loss. For the variation of leases which is not treated individually, the remeasurement of lease liabilities resulting from decrease in the scope of lease indicates reduction in the right-of-use assets, and recognizes the income/loss from termination of the lease, in whole or in part. The remeasurement of lease liabilities resulting from other variations indicates adjustment of the right-of-use assets. The lease liabilities are individually expressed in the balance sheets.

The Company engaged in the negotiation for the rent directly related to COVID-19 with landlords and adjusted the rent due before June 30, 2022, thereby resulting in the decrease in the rent. Notwithstanding, the other lease terms and conditions remained unchanged by the negotiation. The Company chose to adopt the expedient and practical practices when engaging the negotiation for the rent for all of the lease contracts satisfying said conditions, without assessing whether the negotiation should be stated as leasehold improvement. Instead, the Company recognized the decrease in lease payment as the income upon occurrence of the concession event or condition (stated as other non-operating revenue and expenses), and also relatively reduced the lease liabilities.

The variable rents not depending on any index or fees in a lease agreement are recognized as expenses of the current when it occurs.

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(XVII) Employee Benefits

Post-employment benefits

For defined contribution retirement benefit plans, payments to the benefit plan are recognized as an expense when the employees have rendered service entitling them to the contribution.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the Projected Unit Credit Method. Service cost (including current service cost), and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur, accounted to the retained earnings, and will not be reclassified to profit or loss.

Net defined benefit liability (asset) represents the actual deficit (excess) in the Company’s defined benefit plan. Net defined benefit asset shall not exceed the present value of the provision returned from the plan or the reducible future provision.

(XVIII) Income tax

The term “income tax expenses” as set forth herein denotes total of the income tax payable in the current term and the deferred income tax.

1. Current tax

The income tax levied on the undistributed surplus earnings based the Income Tax Act, is recognized in the year when resolved by the shareholders’ meeting.

The adjustment of the payable income tax of the previous year is included in the current income tax.

1. Deferred income tax

Deferred income tax is calculated based on the temporary difference between the carrying amounts of the assets and liabilities on the accounts, and the tax basis for calculating the taxes.

The deferred income tax liabilities would be generally recognized for all taxable provisional difference. The deferred income tax assets were recognized at the moment upon occurrence of income tax credit of the potential taxable income deducted with provisional difference.

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The taxable temporary difference related to the investments in associates is to recognize the deferred income tax liabilities; however, if the Company may control the timing of reversing the temporary difference, and such temporary difference may likely not be reversed in the foreseeable future, such temporary difference is excluded. The deductible temporary difference related to such investment is recognized as deferred income tax assets to the extent that it is probable that taxable profits will be available against which temporary differences in the deductibles can be utilized.

The carrying amount of the deferred income tax assets was reviewed anew on each and every balance sheet date. Aiming at such event where there would be very likely not adequate taxable income to recover the assets either in whole or in part, the Company adjusted downward the carrying amount. Where those were not initially recognized as deferred income tax assets, the Merging Company, as well, reviewed anew on each and every balance sheet date. It, in turn, would adjust upward the carrying amount in the future while there would be likely to yield taxable income to recover assets either in whole or in part.

The deferred income tax assets and liabilities were measured at the tax rates of that current. The said tax rate would be on the grounds of the tax rates and taxation laws, which had been enacted or had been substantially enacted as of the balance sheet date. The deferred income tax liabilities and assets were measured to reflect the Company for the taxation consequences of taxation for the carrying amounts of the assets and liabilities anticipated to be recovered or reimbursed as of the balance sheet date.

3.

• Current and Deferred income tax

The current and deferred income tax was recognized in the profit and/or loss. The current and deferred income tax relevant to the items, which were recognized in other comprehensive income or directly counted into the items of equity, was recognition into other comprehensive income or directly counted into equity respectively.

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(XIX) Revenue Recognition

Except the “revenue from insurance operations”, the revenue is recognized under IFRS 15 "Revenue from Contracts with Customers". Revenue is measured at the fair value of the received or receivable considerations.

Dividend revenues and Interest incomes

The dividend revenue yielded in investment was recognized at the moment where the rights for shareholders to receive the dividends, but in the very premise that the transaction related economic gains would be very likely to be flown into the Company and the amount of revenues could be measured in a trustworthy manner.

The Interest income of financial assets was recognized at the moment while the economic gains would be very likely to be flown into the Company and the amount of revenues could be measured in a trustworthy manner. Interest income shall be recognized on an accrual basis subject to the outstanding principal and applicable interest rate.

(XX) Insurance Business Income and Acquisition Cost

The premium income from the direct insurance is recognized based on all of the current policy-written insurance and policies with confirmed modification. The income of reinsurance inward premium of the reinsurance inward is accounted at the date of statement arrival in daily course, and the unaccounted reinsurance premium incomes are estimated with a reasonable and systematic method. The related acquisition cost (e.g. commission expenditure, agency expenses, fee expenditure and the reinsurance commission expenditure) are recognized at the same period without being deferred.

The unearned premium reserves calculates the unearned premiums based on the unearned risks and provided for each insurance for the unearned valid contracts or the insurance risks not yet eliminated.

The unearned premium reserves for the compulsory automobile insurance are provided based on the “Regulations for the Management of the Various Reserves for Compulsory Automobile Liability Insurance.”

The unearned premium reserves for the residential earthquake insurance are provided based on the “Enforcement Rules for the Risk Spreading Mechanism of Residential Earthquake Insurance.”

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The unearned premium reserves for nuclear energy insurance are provided based on the “Regulations Governing Various Reserves for Nuclear Energy Insurance Operated by Non-Life Insurance Enterprises”.

The approach to provide the unearned reserves, unless required by laws otherwise, shall be determined by the appointed actuaries (not to be changed without the approval from the competent authorities). The amount of unearned premium reserves shall be audit and certified by the appointed actuaries.

The taxes related to the insurance business revenues are recognized accrual basis of accounting according to the Value-Added Tax and Non-Value-Added Tax Act and the Stamp Tax Act.

(XXI) Claim Costs of Insurance Business

The insurance claims of the direct insurance are recognized at the paid claims (claim expenses included) of the current occurred and with report accepted. Where the claim department has confirm the amount of claims but the accounting and finance department has not proceed to pay the claims, and the amount of claim is not yet confirmed, are estimated with the actual information case by case based on the insurance type, and recognized as the net change to the claim reserves reported but not paid.

The reinsurance claims of the reinsurance inward are accounted at the date of statement arrival in daily course, and the unaccounted reinsurance claims are estimated with a reasonable and systematic method to be recognized as the net change in claims reserves.

The unreported claims for the direct insurance and reinsurance inward are calculated based on the past experience and fees by insurance categories, the claim reserves shall be calculated in the manners consistent with the actuarial principles, to be recognized the net change in claims reserves.

For the claims of the reinsurance case that shall be refundable form the reinsurers, the paid claims (claim expenses included) are recognized as the refundable claim payable; the reported but not paid claims (claim expenses included) are recognized as net change in claims reserves.

The provision of claim reserves does not apply discount.

The claim reserves for the compulsory automobile insurance are provided based on the “Regulations for the Management of the Various Reserves for Compulsory Automobile Liability Insurance.”

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The claim reserves for the residential earthquake insurance are provided based on the “Enforcement Rules for the Risk Spreading Mechanism of Residential Earthquake Insurance.”

The claim reserves for nuclear energy insurance are provided based on the “Regulations Governing Various Reserves for Nuclear Energy Insurance Operated by Non-Life Insurance Enterprises.”

(XXII) Adequacy Test of Liabilities

By applying IFRS 4 “Insurance Contract”, the contract required for adequacy test shall test the adequacy for its recognized insurance liabilities with the current information at each balance sheet date based on the actuarial practice principles issued by the Actuarial Institute of the Republic of China. Shall there be any deficiency in the outcome, the deficit amount shall be provided for the liability adequacy reserves.

(XXIII) Co-Insurance Organization, Co-Insurance, and the Agreement of Guarantee Fund

1. Contract of co-insurance and co-sharing for the compulsory automobile liability insurance

The Company has entered the “Contract of co-insurance and co-sharing for the compulsory automobile liability insurance” with all member companies approved by the competent authorities to operate compulsory automobile liability insurance business, to agree the compulsory automobile liability insurance covered shall be included in the co-insurance, the violation is subjected to fines, and the co-insurance panel may sent auditors to audit. The undertaking of the co-insurance is calculated on the basis of pure premiums and allocated based on the agreed co-insurance percentage. Shall there be several (2 or more) co-insurers involve the claims for the same car accident, the co-insurers shall proceed based on the regulations, and then share the liabilities based on the responsibilities of each party by case. Unless being liquidated or ceasing the operation, any member company joining the co-insurance must not withdraw on its own will. At the time ceasing the automobile liability insurance, it is deemed a withdrawal from the co-insurance, the unearned liability expires naturally.

1. Coinsurance Contract for Subcontracting Residential Earthquake Insurance

The Company has entered the “Coinsurance Contract for Subcontracting Residential Earthquake Insurance” with all member companies approved by the competent authorities to operate residential fire insurance business, after the application to join Taiwan Residential Earthquake Insurance Fund (“Residential

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Earthquake Insurance Fund”) to agree the residential earthquake insurance covered shall be included in the co-insurance, and the co-insurance panel may sent auditors to audit. The undertaking of the co-insurance is calculated on the basis of pure premiums, and the individual member companies assumes the coinsurance liabilities based on its share, without joint liabilities. The member company may notify the Residential Earthquake Insurance Fund three months prior to the next year that it will withdraw from the coinsurance from the next year. Its accepted share is accepted till the end of the year, and the unfinished liabilities from such accepted share is transferred to that member at the time. Shall any member company become a ceased company due to suspension for reconstruction, dissolution, or merge, it shall immediately notify the Residential Earthquake Insurance Fund to withdraw from the coinsurance. The remaining accepted share for that year, shall be transferred to be accepted by other members of the coinsurance from the date of suspension for reconstruction and dissolution announced by the competent authorities. The transfer method is determined by the meeting of members. For the withdrawal due to merge, the remaining accepted share for that year shall be succeeded by the surviving company.

V. Major Sources of Major Accounting Judgments, Estimate and Hypotheses

Where the Company adopted accounting policies, where the relevant information was found hardly available from other sources, the management must come to relevant judgments, estimates and hypotheses based on historical experiences and other relevant factors. The estimation might be different from the actual result.

The management would continually review the estimates and fundamental hypotheses. In the event that the estimated amendment would only affect the current term, it would be recognized in the term of amendment. In the event that the amendment of the accounting estimates would simultaneously affect both the current and future terms, it would be recognized in the term of the amendment and the future term. Claim liabilities arising from insurance contracts

For the estimation of the final claim liability to insurance contract, the claim reserves are calculated based on the past claim experience and fee by insurance type in the manner consistent to the actuarial principles. On the balance sheet date, the pending claim reserves can afford to cover all of the claim losses and expenses for the incidents incurred on the same day, provided that the reserves are provided based estimates. Therefore, the final liabilities might be more or less than the estimates.

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VI. Cash and cash equivalents

Cash and cash equivalents
Cash on hand and working capital Bank’s notes and current deposit Cash equivalents Commercial paper Time deposits in banks due within 3 months in the date of initial maturity Less: Deductible of the Refundable Deposits (Note 16)	December 31, 2021 $ 32,959 2,668,364 1,298,685 235,200 ( 56,870) $ 4,178,338	December 31, 2020
	(	(	$ 31,015 2,352,720 1,048,190 340,190 87,585) $ 3,684,530

The interest rate ranges for bank time deposits and promissory notes on the balance sheet date are stated as following:

sheet date are stated as following:
Time deposits in banks due within 3 months in the date of initial maturity Commercial paper	December 31, 2021 0.06%～0.41% 0.27%～0.31%	December 31, 2020
		0.06%～0.41% 0.18%～0.23%

VII. Receivables

Receivables
Notes receivable Less: allowance loss Premiums receivable Premiums receivable - Non- accrual loan Less: allowance loss Interest receivable Stock dividends receivable Other receivable Other receivable - Non-accrual loan Less: allowance loss Other receivables	December 31, 2021 $ 99,505 ( 995) $ 98,510 $ 455,849 79,281 ( 46,232) $ 488,898 $ 64,413 620 13,309 7,843 ( 4,792) $ 81,393	December 31, 2020
	( ( (	( ( (	$ 97,079 971) $ 96,108 $ 469,941 25,653 10,231) $ 485,363 $ 58,323 - 13,133 19,366 6,833) $ 83,989

(I) Receivables

To reduce the credit risks, the management of the Company has assigned the premium section to track the overdue payment, to ensure the proper actions have been

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taken for the recovery of overdue receivables. Besides, on the balance sheet dates, the Company review the recoverable amount of the receivables again one by one, to ensure the unrecoverable receivables are provided for the proper allowance loss. Therefore, the management of the Company believes the credit risks of the Company is significantly reduced.

The Company recognizes the allowance loss for receivables as the higher expected credit losses between from of the “Regulations Governing the Procedures for Insurance Enterprises to Evaluate Assets and Deal with Non-performing/Non-accrual Loans” and simplified method of IFRS 9, or of the lifetime. The lifetime expected credit losses are calculated using the reserve matrix, by considering the past default records and the current financial position of clients, industrial economic situations, as well as the GDP forecast and industrial outlooks. As the credit loss history of the Company shows that there is no significant difference among the loss patterns of different client groups, the reserve matrix does not further divide the client groups, but only establish the expected credit losses based on the aging of receivables.

Where any evidence shows that the counterparties of transactions have severe financial difficulties, and the Company cannot reasonably expect the recoverable amount, e.g. the counterparty is being liquidated, the Company writes off the related receivables upon the resolution passed by the Board of Directors. However the pursuit of recovery will be continued, and the amount recovered from such pursuit will be recognized in profit/loss.

The Company recognizes the allowance loss for receivables as the higher expected credit losses between from of the “Regulations Governing the Procedures for Insurance Enterprises to Evaluate Assets and Deal with Non-performing/Non-accrual Loans”, or from the reserve matrix. The movement for the allowance loss for the receivables are as follows:

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December 31, 2021

Balance - beginning Add: Provision (reversal) in the period Balance - ending		12-month expected credit loss I $ 1,360 1,704 $ 3,064		Lifetime expected credit loss II $ 3,132 44,027 $ 47,159	Lifetime expected credit loss III $ 1,673 ( 894) $ 779	Impairment provided based in IFRS 9 $ 6,165 44,837 $ 51,002	Impairment based on the “Regulations Governing the Procedures for Insurance Enterprises to Evaluate Assets and Deal with Non- performing/No n-accrual Loans” $ 11,870 ( 10,853) $ 1,017		Total
					(		(		$ 18,035 33,984 $ 52,019

December 31, 2020

Balance - beginning Add: Provision (reversal) in the current period Balance - ending		12-month expected credit loss I $ 3,195 1,835) $ 1,360		Lifetime expected credit loss II $ 2,735 397 $ 3,132	Lifetime expected credit loss III $ 825 848 $ 1,673	Impairment provided based in IFRS 9 $ 6,755 ( 590) $ 6,165	Impairment based on the “Regulations Governing the Procedures for Insurance Enterprises to Evaluate Assets and Deal with Non- performing/No n-accrual Loans” $ 5,480 6,390 $ 11,870		Total
	(					(			$ 12,235 5,800 $ 18,035

The allowance loss as of December 31, 2021 and 2020 increased by NT$21,037 thousand and NT$5,800 thousand, respectively, mainly as a result of the net increase of NT$42,105 thousand and NT$6,552 thousand to the gross carrying amount of receivables transferred to the non-accrual loans.

(II) Non-accrual loan and allowance for loss

For the notes receivable, premium receivable, and non-accrual loans in other receivables, the allowances have been provided as NT$0 thousand, NT$44,583 thousand, and NT$3,355 thousand, respectively, as of December 31, 2021.

For the notes receivable, premium receivable, and non-accrual loans in other receivables, the allowances have been provided as NT$0 thousand, NT$6,215 thousand, and NT$6,693 thousand, respectively, as of December 31, 2020.

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(III) The ageing analysis for the receivables

0–30 days 31–90 days 91–180 days 181–365 days More than 365 days Total	December 31, 2021 $ 546,556 87,162 34,620 51,703 779 $ 720,820	December 31, 2020	December 31, 2020
			$ 558,221 80,287 21,802 12,771 10,414 $ 683,495

The aging analysis is conducted based on the accounted dates.

VIII.	Financial instruments measured at fair values through profit and/or	Financial instruments measured at fair values through profit and/or	loss December 31, 2020	loss December 31, 2020
	Compulsory measurement at fair value through profit and loss - TWSE/GTSM listed shares - Beneficiary certificates of funds - Domestic financial bonds - Domestic corporate bonds - Overseas financial bonds	December 31, 2021 $ 159,441 171,776 1,202,403 518,316 129,087 $ 2,181,023
				$ 204,920 156,780 1,054,592 522,397 - $ 1,938,689

IX. Financial assets at fair value through other comprehensive income

Equity instruments at fair value through other comprehensive income Bond instruments measured at fair value through other comprehensive income Deductible of refundable deposits Investments in equity instruments Domestic investment TWSE/TPEx-listed shares and emerging shares Unlisted Shares	December 31, 2021 $ 4,368,106 1,697,807 ( 603,630) $ 5,462,283 December 31, 2021 $ 3,901,930 466,176 $ 4,368,106	December 31, 2020	December 31, 2020
		$ 3,668,717 1,612,245 ( 622,187) $ 4,658,775 December 31, 2020
			$ 3,310,661 358,056 $ 3,668,717

(I) Investments in equity instruments

The Company invests for the mid- and long-term strategies, and expects to gain through the long-term investments. The management of the Company believes that it is inconsistent to include the short-term fair value fluctuations of such investments in

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profit/loss for the said purpose of long-term investments; therefore, it opts to designate such investments as measured at FVTOCI.

In 2021 and 2020, the Company adjusted the investment positions to diversify risks, and the sold part of common shares at fair value for NT$886,382 thousand and NT$91,815 thousand; the related other equity - unrealized gains and losses on financial assets at fair value through profit or loss, NT$168,491 thousand and NT$10,609 thousand have been transferred to the retained earnings.

The Company recognized the dividend revenues, NT$143,403 thousand and NT$139,225 thousand, respectively, in 2021 and 2020, including the amounts related to investments derecognized at the end of the period, NT$5,463 thousand and NT$0 thousand. The amounts related to the holders were NT$137,940 thousand and NT$139,225 thousand on December 31, 2021 and 2020.

(II) Investments in liability instruments

Investments in liability instruments
Domestic investment Government Bonds Financial bonds Corporate Bonds Deductible of the Refundable Deposits (Note 16) Subtotal Foreign investment Financial bonds Corporate Bonds Subtotal Total	December 31, 2021 $ 603,630 99,998 103,518 ( 603,630) 203,516 138,211 752,450 890,661 $ 1,094,177	December 31, 2020
	(	(	$ 622,187 49,998 104,110 622,187) 154,108 142,258 693,692 835,950 $ 990,058

For the information for credit risks management and the impairment evaluation related to bond instruments measured at fair value through other comprehensive income, please refer to Note 10.

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X. Credit risks management for Investments in liability instruments

Bond instruments investment accounted as financial assets at fair value through

other comprehensive income:

December 31, 2021

December 31, 2021
Total of Carrying Amount Allowance loss Amortized cost Adjustment to fair value Deductible of refundable deposits December 31, 2020	At fair value through other comprehensive income
	( (	$ 1,641,291 779) 1,640,512 57,295 1,697,807 603,630) $ 1,094,177

December 31, 2020
Total of Carrying Amount Allowance loss Amortized cost Adjustment to fair value Deductible of refundable deposits	At fair value through other comprehensive income
	( (	$ 1,517,360 884) 1,516,476 95,769 1,612,245 622,187) $ 990,058

The policies applied by the Company is to only invest the bond instruments with rating of investment grade and above and low credit risk for impairment evaluation. The credit ratings are provided by independent rating agencies. The Company continuously track the external ratings to monitor the movement of the credit risk for the invested bond instruments, while reviewing other information such as the yield curves of bonds and material information of the debtors, for the purpose of evaluating if the credit risks of bond instruments increase significantly since the initial recognition.

By considering the default loss rate provided by the external rating agencies, current financial position of the debtors, and the outlook forecasts of the industries where they operates, to measure the 12-month ECLs or lifetime ECLs. The current credit risk rating mechanism of the Company is as the following:

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Credit Rating Normal Abnormal Default Write Off	Definition The credit risk of the debtor is low, or not increased significantly, with sufficient solvency for the contractual cash flow The credit risk has been significantly increased since initial recognition Evidence of credit loss exists or the credit impairment loss is recognized The available proof showed that the debtor was suffering serious financial difficulties and it was impossible for the Company to expect recoverability	Basis for Recognizing ECLs
		12-month expected credit loss Lifetime expected credit loss (credit not impaired) Lifetime expected credit loss (credit impaired) Direct Write Off

The total carrying amounts of the debt instrument investments of each credit rating, and the applicable ECL rates are as the following:

December 31, 2021

December 31, 2021
Credit Rating Normal Abnormal Default Write Off	Expected Credit Loss (ECL) 0.000%～0.4997% (Note) (Note) (Note)	December 31, 2021 Total of Carrying Amount
		$ 1,641,291 - - -

December 31, 2020

December 31, 2020
Credit Rating Normal Abnormal Default Write Off	Expected Credit Loss (ECL) 0.002%～0.519% (Note) (Note) (Note)	December 31, 2020 Total of Carrying Amount
		$ 1,517,360 - - -

(Note): The credit level of the bond investments as of December 31, 2021 and 2020 were all normal and thus not applicable.

For the bond instruments measured at fair value through other comprehensive income, the movement for allowance loss is summarized by the grade of credit risks as the following:

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XI.	Credit Rating Normal (12-month expected credit loss) Abnormal (Lifetime expected credit loss whose credit not impaired) Default (Lifetime expected credit loss exists and the credit is impaired) Balance at January 1, 2021 $ 884 $ - $ - Purchase of New Liability Instruments 91 - - Derecognition ( 83) - - Exchange rate and other movement ( 113) - - Allowance loss on December 31, 2021 $ 779 $ - $ - Balance at January 1, 2020 $ 1,262 $ - $ - Purchase of New Liability Instruments 15 - - Derecognition ( 145) - - Exchange rate and other movement ( 248) - - Allowance loss on December 31, 2020 $ 884 $ - $ - Investment under equity method December 31, 2021 December 31, 2020 Investments in associates $ 264,896 $ 242,485 Summarization About Associates With Immateriality Information Percentage of the shareholding and voting rights Company Name December 31, 2021 December 31, 2020 Top Taiwan X Venture Capital Co., Ltd. 24.75% 24.75% 2021 2020 Shares Vested in the Company Net profit for the period from continuing operations $ 25,718 $ 25,596 Other comprehensive income - - Total comprehensive income $ 25,718 $ 25,596			Credit Rating	Credit Rating
						Default (Lifetime expected credit loss exists and the credit is impaired)
	Company Name Top Taiwan X Venture Capital Co., Ltd. Shares Vested in the Company Net profit for the period from continuing operations Other comprehensive income Total comprehensive income
			December 31, 2021 24.75% 2021 $ 25,718 - $ 25,718		December 31, 2020
							24.75% 2020
							$ 25,596 - $ 25,596

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For the business natures, major business locations, and the countries where the entities register, please refer to the Table 1: “Information, Location of the Invested Company”

The investment under equity method and shares of income and other comprehensive income remaining vested in the Company in it were recognized based on the affiliates' financial statements audited by the CPA for the same fiscal period.

XII. Other financial assets - net

Other financial assets-net
Time deposit with initial maturity date more than three months away Less: Deductible of the Refundable Deposits (Note 16)	December 31, 2021 $ 2,404,406 ( 23,145) $ 2,381,261	December 31, 2020
	(	(	$ 2,987,652 18,145) $ 2,969,507

The interest rate ranges of time deposit and NCD on the balance sheet date are as follows:

follows:
Time deposits Investment Properties Investment Properties Completed Right-of-use assets	December 31, 2021 0.06% ~ 2.55% December 31, 2021 $ 2,129,442 14,905 $ 2,144,347	December 31, 2020
		0.06% ~ 2.70% December 31, 2020
			$ 2,265,866 20,891 $ 2,286,757

XIII. Investment Properties

Cost Balance at January 1, 2020 Increase Disposition Transferred to property and equipment Transferred from property and equipment Balance at December 31, 2020 Accumulated Depreciation Balance at January 1, 2020 Depreciation expense Disposition Transferred to property and equipment Transferred from property and equipment Balance at December 31, 2020 Net at December 31, 2020	Land $ 2,120,730 - ( 59,080) ( 28,735) 28,735 $ 2,061,650 $ - - - - - $ - $ 2,061,650	House and building $ 509,617 424 ( 54,289) ( 10,599) 10,599 $ 455,752 $ 243,245 13,470 ( 5,236) ( 6,886) 6,943 $ 251,536 $ 204,216		Right-of-use assets $ 32,861 - - - - $ 32,861 $ 5,985 5,985 - - - $ 11,970 $ 20,891	Total
					$ 2,663,208 424 ( 113,369) ( 39,334) 39,334 $ 2,550,263 $ 249,230 19,455 ( 5,236) ( 6,886) 6,943 $ 263,506 $ 2,286,757

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Cost Balance at January 1, 2021 $ 2,061,650 $ 455,752 Increase - 1,697 Disposition ( 7,377) ( 11,523) Transferred to property and equipment ( 73,560) ( 38,217) Balance at December 31, 2021 $ 1,980,713 $ 407,709 Accumulated Depreciation Balance at January 1, 2021 $ - $ 251,536 Depreciation expense - 12,957 Disposition - ( 1,291) Transferred to property and equipment - ( 4,222) Balance at December 31, 2021 $ - $ 258,980 Net at December 31, 2021 $ 1,980,713 $ 148,729

$ 32,861 $ 2,550,263 - 1,697 - ( 18,900) - ( 111,777) $ 32,861 $ 2,421,283 $ 11,970 $ 263,506 5,986 18,943 - ( 1,291) - ( 4,222) $ 17,956 $ 276,936 $ 14,905 $ 2,144,347

The Company amortized depreciation on the straight-line basis for its investment properties of the following useful life:

House and building Right-of-use assets

==> picture [58 x 25] intentionally omitted <==

Considering that the COVID-19 epidemic has severely affected the market economy in 2021, before the national epidemic alert standard was adjusted as Level 3, the Company agreed that certain lease contracts may cut rent by 5% from April to December 2021, and by 30–40% from May 18 to August 17, 2021 after the national epidemic alert standard was adjusted as Level 3. Notwithstanding, as the national epidemic alert standard was adjusted as Level 2 or below before August 17, 2021, the monthly rent was adjusted back to the same amount applicable before the national epidemic alert standard was adjusted as Level 3 as of the date following the degrading of the national epidemic alert standard. The effects of said amount resulting from the adjustment have been NT$5,251 thousand in total.

Considering that the COVID-19 epidemic severely affected the market economy in 2020, the Company agreed that certain lease contracts may cut rent by 20% from March to May 2020, and by 10% from August to October 2020, i.e. by NT$4,615 thousand in total.

The fair value (right-of-use assets are excluded) of investment property on December 31, 2021 and 2020 was appraised by the independent appraisers, Cathay Real Estate Appraisers Joint Firm and Affluence Real Estate Appraiser Firm, based on the inputs for Level 3 fair value measurement on the balance sheet date. The appraisal was

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evaluated base on the “Regulations on Real Estate Appraisal”, by applying appraisal approaches including market comparison, income, analysis of land development, or cost. The applied key unobservable input is the discount rate. The fair values from the appraisals are as follows:

appraisals are as follows:
Fair Value Discount rate	December 31, 2021 $ 4,378,483 0.98%~3.82%	December 31, 2020
		$ 4,586,157 0.82%~5.00%

On May 21, 2010, the Company entered a co-building contract with Jut Land Development Co., Ltd. (“Jut Land Development”), to jointly build a building at Small Section 1, Zhongshan Section, Zhongshan District, Taipei City. The approach of the project is co-construction for sharing building. The Company provided the land, and Jut Land Development provided fund for construction. The area of each levels and the parking lot are shared by Jut Land Development and the Company for 35% and 65%, respectively. According to the co-building contract, Jut Land Development should pay the deposit of NT$50,000 thousand to the Company (stated as deposits received) when signing the contract, with a note bond with carrying amount of NT$50,000 thousand. The Company shall return the said bond and note bond to Jut Land Development upon building delivery. On May 6, 2016, the Company signed a complementary agreement with Jut Land Development. On the signing date, the deposit of NT$50,000 thousand was returned. The last unit at A1-7F of the co-building project has been surrendered to the client on April 14, 2020. Therefore, on May 25, 2020, the note bond with carrying amount of NT$50,000 thousand was refunded to Jut Land Development.

The land provided by the Company was transferred on December 27, 2014, and the building started to be sold when the title of the building was obtained on January 27, 2015.

From January 1 to December 31, 2021, the Company disposed of the investment properties including the land and buildings at Small Section 3, Xinglong Section, Wenshan District, Taipei City, and generated the proceeds totaling NT$21,297 thousand (after tax). Less the book value, NT$17,609 thousand, the gains from the disposal became NT$3,688 thousand, stated as the operating revenue-gain (loss) on investment properties.

From January 1 to December 31, 2020, the Company disposed of the investment properties including the land and buildings at Small Section 1, Zhongshan Section, Zhongshan District, Taipei City, and generated the proceeds totaling NT$79,909 thousand (after tax). Less the book value, NT$56,583 thousand, the gains from the disposal became NT$23,326 thousand, stated as the operating revenue-gain (loss) on investment properties.

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From January 1 to December 31, 2020, the Company disposed of the investment properties including the land and buildings at Small Section 3, Xinglong Section, Wenshan District, Taipei City, and generated the proceeds totaling NT$60,430 thousand (after tax). Less the book value, NT$51,550 thousand, the gains from the disposal became NT$8,880 thousand, stated as the operating revenue-gain (loss) on investment properties. All investment properties owned by the Company was in its own interests.

The right-of-use assets included in the investment properties refers to the land rented by the Company and subleased to others in the form of operating lease.

The total amounts of the expected future lease payments from the investment properties leased as operating leases are as the following:

1st year 2nd year 3rd year 4th year 5th year More than 5 years	December 31, 2021 $ 120,906 91,710 75,644 44,047 28,584 87,300 $ 448,191	December 31, 2020	December 31, 2020
			$ 109,829 87,388 56,701 42,640 10,460 2,659 $ 309,677

XIV. Property and Equipment

Cost Balance at January 1, 2020 Increase Disposition Transferred from investment properties Transferred to investment properties BALANCE at December 31, 2020 Accumulated Depreciation Balance at January 1, 2020 Depreciation expense Disposition Transferred from investment properties Transferred to investment properties BALANCE at December 31, 2020 Net at December 31, 2020		Own land	Buildings and ancillary equipment	Buildings and ancillary equipment		Computer equipment		Traffic and transport equipment		Other equipment	Leasehold improvements	Leasehold improvements		Total
	(	$ 261,774 - - 28,735 28,735) $ 261,774 $ - - - - - $ - $ 261,774	( (	$ 164,730 2,212 - 10,599 10,599) $ 166,942 $ 94,056 3,355 - 6,886 6,943) $ 97,354 $ 69,588	( (	$ 30,688 6,320 7,134 ) - - $ 29,874 $ 15,738 6,177 6,977 ) - - $ 14,938 $ 14,936	( (	$ 8,949 143 555 ) - - $ 8,537 $ 5,307 1,139 555 ) - - $ 5,891 $ 2,646	( (	$ 10,839 1,119 2,988 ) - - $ 8,970 $ 6,142 1,546 2,988 ) - - $ 4,700 $ 4,270	( (	$ 10,889 929 4,092 ) - - $ 7,726 $ 6,237 2,389 4,092 ) - - $ 4,534 $ 3,192	( ( ( (	$ 487,869 10,723 14,769 ) 39,334 39,334) $ 483,823 $ 127,480 14,606 14,612 ) 6,886 6,943) $ 127,417 $ 356,406

(To be continued)

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(Continued)

Cost Balance at January 1, 2021 Increase Disposition Transferred from investment properties Balance at December 31, 2021 Accumulated Depreciation Balance at January 1, 2021 Depreciation expense Disposition Transferred from investment properties Balance at December 31, 2021 Net at December 31, 2021		Own land	Buildings and ancillary equipment	Buildings and ancillary equipment		Computer equipment		Traffic and transport equipment		Other equipment	Leasehold improvements	Leasehold improvements		Total
		$ 261,774 - - 73,560 $ 335,334 $ - - - - $ - $ 335,334		$ 166,942 - - 38,217 $ 205,159 $ 97,354 4,012 - 4,222 $ 105,588 $ 99,571	( (	$ 29,874 16,271 6,528 ) - $ 39,617 $ 14,938 6,416 6,528 ) - $ 14,826 $ 24,791	( (	$ 8,537 316 3,542 ) - $ 5,311 $ 5,891 723 3,542 ) - $ 3,072 $ 2,239	( (	$ 8,970 1,100 1,680 ) - $ 8,390 $ 4,700 1,215 1,680 ) - $ 4,235 $ 4,155	( (	$ 7,726 1,725 1,493 ) - $ 7,958 $ 4,534 2,044 1,493 ) - $ 5,085 $ 2,873	( (	$ 483,823 19,412 13,243 ) 111,777 $ 601,769 $ 127,417 14,410 13,243 ) 4,222 $ 132,806 $ 468,963

The depreciation expenses are provided on the straight-line basis during the durable life span:

Building	30-35 and 55 years
Auxiliary equipment
Power transmission equipment	15-20 years
Telecommunication equipment	8-10 and 15 years
Fire-fighting equipment	10 years
Computer equipment	3-6 years
Traffic and transport equipment	3-5 years
Other equipment	4-8 years
Leasehold improvements	4 years

XV. Lease Agreement

(I) Right-of-use assets

ight-of-use assets
Cost Balance at January 1, 2020 Increase Decrease in the period Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation expense Decrease in the period Balance at December 31, 2020 NET at December 31, 2020		Building $ 50,762 34,850 15,792) $ 69,820 $ 20,550 22,206 15,585) $ 27,171 $ 42,649		Transport equipment $ 8,074 1,983 3,005) $ 7,052 $ 4,154 2,587 2,791) $ 3,950 $ 3,102	( (	Total
	( (		( (			$ 58,836 36,833 18,797) $ 76,872 $ 24,704 24,793 18,376) $ 31,121 $ 45,751

(To be continued)

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(Continued)

Cost Balance at January 1, 2021 Increase Decrease in the period Balance at December 31, 2021 Accumulated depreciation and impairment Balance at January 1, 2021 Depreciation expense Decrease in the period Balance at December 31, 2021 Net at December 31, 2021		Building $ 69,820 20,743 14,729) $ 75,834 $ 27,171 22,459 14,373) $ 35,257 $ 40,577		Transport equipment $ 7,052 2,122 4,029) $ 5,145 $ 3,950 3,156 3,972) $ 3,134 $ 2,011		Total
	( (		( (		( (	$ 76,872 22,865 18,758) $ 80,979 $ 31,121 25,615 18,345) $ 38,391 $ 42,588

The land rented by the Company was subleased in the form of operating lease. The relevant right-of-use assets were stated as the investment properties. Please refer to Note 13. Said right-of-use assets excluded those defined as investment properties.

(II) Lease liabilities

ease liabilities
Carrying amount of lease liabilities Interest expense of lease liabilities	December 31, 2021 $ 61,741 December 31, 2021 $ 1,621	December 31, 2020
		$ 71,498 December 31, 2020
			$ 1,661

Discount rates for the lease liabilities are as the following:

Land Building Transport equipment	December 31, 2021 2.616% 2.366%~2.616% 2.366%~2.616%	December 31, 2020
		2.616% 2.366%~2.616% 2.366%~2.616%

(III) Major lessee activities and terms and conditions

When the Company is a lessee of lands and buildings, the period is 1 to 5 years. When the lease period expires, the Company has no favorable right to purchase the leased lands.

Considering that the COVID-19 epidemic has severely affected the market economy in 2021, the Company engaged in the negotiation with the Irrigation Agency, Council of Agriculture, Executive Yuan for the rent concession for lease of building. As a result, the Agency agreed to reduce the rent by 20% from May to December 2021. The effect of said rent concession recognized by the Company from January 1 to

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December 31, 2021 was NT$49 thousand (stated as non-operating revenue and expense).

• (IV) Other information of Leases

ther information of Leases
Short-term lease expenses Low-valued asset lease expenses Total amount of cash (outflow) of lease	December 31, 2021 $ 102 $ 301 ($ 33,774)	December 31, 2020
	(	(	$ 132 $ 123 $ 33,188)

• XVI. Refundable Deposit

Refundable Deposit
Refundable deposit Bond of Insurance Enterprises Bond of Litigation Others	December 31, 2021 $ 603,630 3,337 76,678 $ 683,645	December 31, 2020
			$ 622,187 18,377 87,353 $ 727,917

• (I) Based on Article 141 and 142 of the Insurance Act, an insurance enterprise shall post bond at the national treasury in an amount equal to 15% of the total amount of its paidin capital or paid-in fund. The bond posted is not to be returned except suspending business and having liquidation completed. The Company offset it with the government bonds.

• (II) The Company has paid the following assets as bonds for legal actions and others on December 31, 2021 and 2020.

December 31, 2021 and 2020.
Other financial assets - Time deposits Cash and cash equivalents Reserve for liabilities Net defined benefit liability	December 31, 2021 $ 23,145 56,870 $ 80,015 December 31, 2021 $ 83,267	December 31, 2020
		$ 18,145 87,585 $ 105,730 December 31, 2020
			$ 82,378

XVII. Reserve for liabilities

(I) Defined contribution plan

The “Labor Pension Act” is applicable to the Company, which is a defined contribution plan managed by the Government. Monthly contributions equal to 6% of each employee’s monthly salary are made to employees’ pension accounts.

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(II) Ascertained fringe benefit plans

The pension system implemented by the Company based on the “Labor Standards Act” is a defined benefit plan managed by the Government. The pension benefits a participant receives are determined based on an employee’s number of years of service and average compensation for the 6-month period prior to retirement. The Company contributes an amount equal to 2% of salaries paid each month to the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. Before the end of each year, if the amount of the balance in the Funds is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The Funds are operated and managed by the government’s designated authorities; as such, the Company does not have any right to intervene in the investments of the Funds.

Amounts recognized in the balance sheet in respect of these defined benefit plans were as follows:

were as follows:
Present value of defined benefit obligation Fair value of plan asset Net defined benefit liability	December 31, 2021 $ 138,110 ( 54,843) $ 83,267	December 31, 2020
	(	(	$ 140,575 58,197) $ 82,378

Movement of the net defined benefit liability are as following:

January 1, 2020 Service cost Current service cost Interest expense (revenue) Recognized into profit and/or loss Remeasurements Plan asset return (the amount included in the net interests is excluded) Actuarial gains and losses - movement of demographic assumption Actuarial gains and losses - movement of financial assumption Actuarial gains and losses - experience adjustments Recognized under other comprehensive income Contributions from employer Benefits paid December 31, 2020		Present value of defined benefit obligation $ 141,437 1,548 1,053 2,601 - 751 116 250 ) 617 - 4,080 ) 140,575	Fair value of plan asset ($ 57,310 ) - ( 432 ) ( 432 ) ( 1,831 ) - - - ( 1,831 ) ( 2,704 ) 4,080 ( 58,197 )	Net defined benefit liability (asset)	Net defined benefit liability (asset)
	( (		( ( ( ( ( ( (	( ( ( (	$ 84,127 1,548 621 2,169 1,831 ) 751 116 250 ) 1,214 ) 2,704 ) - 82,378

(To be continued)

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(Continued)

Service cost Current service cost Interest expense (revenue) Recognized into profit and/or loss Remeasurements Plan asset return (the amount included in the net interests is excluded) Actuarial gains and losses - movement of demographic assumption Actuarial gains and losses - experience adjustments Recognized under other comprehensive income Contributions from employer Benefits paid December 31, 2021		Present value of defined benefit obligation $ 1,499 689 2,188 - 3,281 608 3,889 - 8,542 ) $ 138,110	Fair value of plan asset $ - ( 284 ) ( 284 ) ( 744 ) - - ( 744 ) ( 2,660 ) 7,042 ($ 54,843 )	Net defined benefit liability (asset)	Net defined benefit liability (asset)
	(		( ( ( ( ( (	( ( (	$ 1,499 405 1,904 744 ) 3,281 608 3,145 2,660 ) 1,500 ) $ 83,267

Through the defined benefit plans under the “Labor Standards Act”, the Company is exposed to the following risks:

1. Investment risk: The pension funds are invested in domestic and overseas equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau of Labor Funds, MOL or under the mandated management. However, the distributable amount of the plan assets of the Company, is the income calculated based on the rate no lower than the average interest rate on a 2-year time deposit published by the local banks.

2. Interest risk: A decrease in the government bond/corporate bond interest rate will increase the present value of the defined benefit obligation; however, net defined benefit liability, this will be partially offset by an increase in the return on the debt investments of the plan assets.

3. Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The present value of the defined benefit obligation is calculated by qualified actuaries, and the material assumptions on the measurement date are as follows:

Discount rate Average long term wage- adjustment rate	December 31, 2021 0.50% 2.00%	December 31, 2020
		0.50% 2.00%

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Shall the material actuarial assumptions occur reasonable and possible changes, respectively, where all other assumptions remaining the same, the present value of defined benefit obligation will be caused to increase (decrease) as the following

Discount rate Increase 0.25% Decrease 0.25% Average long term wage- adjustment rate Increase 0.25% Decrease 0.25%	December 31, 2021 ($ 3,333) $ 3,458 $ 3,347 ($ 3,244)	December 31, 2020	December 31, 2020
	(	(	$ 3,543) $ 3,682 $ 3,565 $ 3,450)

As the actuarial assumptions may be interrelated, it is not very likely that only one assumption changes, and thus the abovementioned analysis of sensitivity may not reflect the changes of present value of defined benefit obligations.

Amount expected to be provided within 1 year Average maturity for the defined benefit obligation	December 31, 2021 $ 2,672 9.7 years	December 31, 2020	December 31, 2020
			$ 2,688 10.1 years

XVIII. Reinsurance contract asset and Insurance liabilities

Less benefits & claims recovered from reinsurers Less: allowance loss Due from reinsurers and ceding companies Due from reinsurers and ceding companies - Non-accrual loan Less: allowance loss Reinsurance reserve asset - net Ceding unearned premium reserves Ceding claims reserves Less: Accumulated impairment Insurance liabilities Unearned premium reserves Claim reserves Special reserves Premium deficiency reserves	December 31, 2021 $ 24,630 ( 123) $ 24,507 $ 158,446 5,900 ( 10,575) $ 153,771 $ 822,921 1,059,395 ( 243) $ 1,882,073 $ 3,706,888 3,179,573 2,147,511 13,896 $ 9,047,868	December 31, 2020	December 31, 2020
	( ( (	( ( (	$ 21,187 106) $ 21,081 $ 174,240 11,734 14,958) $ 171,016 $ 802,184 925,404 314) $ 1,727,274 $ 3,447,801 2,894,345 2,118,699 7,588 $ 8,468,433

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(I) Less benefits & claims recovered from reinsurers

Upon determination of the recoverability of claim recoverable from reinsurers, the Company took into account and all changes in the quality of credit of the claim recoverable from reinsurers during the period starting from the initial granting of the loan until the balance sheet date. The Company provides the allowance for loss based on the “Regulations Governing the Procedures for Insurance Enterprises to Evaluate Assets and Deal with Non-performing/Non-accrual Loans,” and all the claims that are overdue for nine months and recoverable from reinsurers are transferred to the nonaccrued loans.

This is the current payment resulted from ceding reinsurance business among insurer’s peer, and thus the concentration of the credit risk is limited. (II) Due from reinsurers and ceding companies

Upon determination of the recoverability of due from reinsurers and ceding companies, the Company took into account and all changes in the quality of credit of the due from reinsurers during the period starting from the initial granting of the loan until the balance sheet date. The Company provides the allowance for loss based on the “Regulations Governing the Procedures for Insurance Enterprises to Evaluate Assets and Deal with Non-performing/Non-accrual Loans,” and all the due from reinsurers overdue for nine months are transferred to the non-accrued loans.

This is the current payment resulted from ceding and inward reinsurance business among insurer’s peer, and thus the concentration of the credit risk is limited.

(III) Movement of allowance for loss for Claim recoverable from reinsurers and due from reinsurers and ceding companies are as follows:

Balance at January 1, 2020 Add: Provision (reversal) in the current year Balance at December 31, 2020 Balance at January 1, 2021 Add: Provision (reversal) in the current year Balance at December 31, 2021		Impairment loss by individual assessment $ 7,928 3,283 $ 11,211 $ 11,211 5,736) $ 5,475	Impairment loss by group assessment $ 3,968 ( 115) $ 3,853 $ 3,853 1,370 $ 5,223		Total
	(		(	(	$ 11,896 3,168 $ 15,064 $ 15,064 4,366) $ 10,698

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The Company does not hold any collateral for the outstanding balances of such receivables.

(IV) Allowance for loss of the non-accrual loan

As of December 31, 2021, the impairment or unrecoverable amount has been evaluated for the due from reinsurers and ceding companies, and the allowance for loss has been provided as NT$5,475 thousand.

As of December 31, 2020, the impairment or unrecoverable amount has been evaluated for the due from reinsurers and ceding companies, and the allowance for loss has been provided as NT$11,211 thousand.

(V) Reinsurance reserve asset and Insurance liabilities

Movement of increase/decrease for reinsurance reserve assets and insurance liabilities during 2021

Reinsurance reserve asset- net Ceding unearned premium reserves Total amount Recognized impairment loss Ceding claims reserves Reported but not yet paid Not yet reported Recognized impairment loss Total of Reinsurance reserve asset Insurance liabilities Unearned premium reserves Claim reserves Reported but not yet paid Not yet reported Special reserves Special reserves for material accidents Special reserves for hazard changes Other special reserves Premium deficiency reserves Total insurance liabilities		January 1, 2021 $ 802,184 - 802,184 557,847 367,557 314) 925,090 $ 1,727,274 $ 3,447,801 1,858,918 1,035,427 2,894,345 178,008 796,548 1,144,143 2,118,699 7,588 $ 8,468,433		Provision of the Period $ 746,742 - 746,742 704,895 354,500 - 1,059,395 $ 1,806,137 $ 3,561,155 2,104,685 1,074,888 3,179,573 - - 53,236 53,236 13,896 $ 6,807,860		Recovery of the Period $ 726,005 - 726,005 557,847 367,557 - 925,404 $ 1,651,409 $ 3,302,068 1,858,918 1,035,427 2,894,345 8,091 - 16,333 24,424 7,588 $ 6,228,425		Others $ - - - - - 71 71 $ 71 $ - - - - - - - - - $ -	December 31, 2021	December 31, 2021
	(								(	$ 822,921 - 822,921 704,895 354,500 243) 1,059,152 $ 1,882,073 $ 3,706,888 2,104,685 1,074,888 3,179,573 169,917 796,548 1,181,046 2,147,511 13,896 $ 9,047,868

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Movement of increase/decrease for reinsurance reserve assets and insurance liabilities during 2020:

Reinsurance reserve asset- net Ceding unearned premium reserves Total amount Recognized impairment loss Ceding claims reserves Reported but not yet paid Not yet reported Recognized impairment loss Total of Reinsurance reserve asset Insurance liabilities Unearned premium reserves Claim reserves Reported but not yet paid Not yet reported Special reserves Special reserves for material accidents Special reserves for hazard changes Other special reserves Premium deficiency reserves Total insurance liabilities		January 1, 2020 $ 751,510 - 751,510 667,090 369,723 4,287) 1,032,526 $ 1,784,036 $ 3,215,885 1,848,738 1,039,374 2,888,112 186,099 796,548 1,159,302 2,141,949 7,154 $ 8,253,100		Provision of thePeriod $ 760,057 - 760,057 557,847 367,557 - 925,404 $ 1,685,461 $ 3,351,289 1,858,918 1,035,427 2,894,345 - - 8,803 8,803 7,588 $ 6,262,025		Recovery of thePeriod $ 709,383 - 709,383 667,090 369,723 - 1,036,813 $ 1,746,196 $ 3,119,373 1,848,738 1,039,374 2,888,112 8,091 - 23,962 32,053 7,154 $ 6,046,692		Others $ - - - - - 3,973 3,973 $ 3,973 $ - - - - - - - - - $ -	December 31, 2020	December 31, 2020
	(								(	$ 802,184 - 802,184 557,847 367,557 314) 925,090 $ 1,727,274 $ 3,447,801 1,858,918 1,035,427 2,894,345 178,008 796,548 1,144,143 2,118,699 7,588 $ 8,468,433

Note: According to the “Directions for Strengthening Natural Disaster Insurance (Commercial Earthquake, Typhoon and Flood Insurance) Reserve by Non-Life Insurance Enterprises”, issued with Jin-Guan-Bao-Cai-Zi No. 10102515061, November 9, 2012, the special reserves for material accidents are reclassified to the special reserves for hazard changes.

Considering that the COVID-19 epidemic, the direct insurance premium revenues from the “notifiable infectious disease epidemic prevention insurance” amounted to NT$1.93 billion and claims payable therefrom amounted to NT$1.71 billion from January 1 to December 31, 2021, and stated claim reserves therefrom amounted to NT$80 million until December 31, 2021. The claims payable from such product amounted to NT$250 million from January 1 to March 18, 2022.

Based on the “Directions for Strengthening Natural Disaster Insurance (Commercial Earthquake, Typhoon and Flood Insurance) Reserve by Non-Life

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Insurance Enterprises”, the “Notes to Enhancing the Reserves of Members of Residential Earthquake Insurance Co-Insurance Organization”, and the Requirement 2 specified in the Letter Jin-Guan-Bao-Cai-Zi No. 10102517095, December 28, 2012, from January 1, 2013, the Company first complements the reserves for material accidents for commercial earthquake insurance and typhoon and flood insurance and the special reserves for hazard changes to the full water level with the special reserves accounted under the liabilities provided before December 31, 2012; the remaining, after deducting the income tax, is accounted to the special earning reserves under Equity based on IAS 12.

In 2021, the summary of effects to which the enhancing disaster reserve mechanism, and reserves of enhancing residential earthquake and nuclear energy insurance are listed as follows:

Amount applied Amount not applied Effects		Net Profit for the Period $ 373,208 366,735 $ 6,473		Earnings Per Share (EPS) $ 1.03 1.01 $ 0.02		Total Liabilities $ 10,461,684 9,264,914 $ 1,196,770		Equity
							(	$ 10,181,291 11,241,303 $ 1,060,012)

In 2020, the summary of effects to which the enhancing disaster reserve mechanism, and reserves of enhancing residential earthquake and nuclear energy insurance are listed as follows:

Amount applied Amount not applied Effects		Net Profit for thePeriod $ 687,595 681,122 $ 6,473		Earnings Per Share (EPS) $ 1.90 1.88 $ 0.02		Total Liabilities $ 10,000,103 8,795,242 $ 1,204,861		Equity
							(	$ 9,580,533 10,634,072 $ 1,053,539)

XIX. Equity

(I) Capital

Common Stock

Common Stock
Authorized shares (thousand shares) Authorized capital The number of issued and outstanding shares with paid-in capital (thousand shares) Issued and outstanding share capital	December 31, 2021 600,000 $ 6,000,000 362,200 $ 3,622,004	December 31, 2020
			600,000 $ 6,000,000 362,200 $ 3,622,004

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(II) Capital surplus

Capital surplus
May be used for making up losses, or be distributed cash or provided as the share capital Premium in stock issuance Treasury stock transaction	December 31, 2021 $ 1,915 97,047 $ 98,962	December 31, 2020
			$ 1,915 97,047 $ 98,962

Such capital surplus may be used to offset a deficit; when the Company has no deficit, such capital surplus may be distributed as cash dividends or stock dividends up to a certain percentage of the Company’s paid-in capital.

(III)

Retained earnings and dividend policy

Based on the distribution of earnings policy in the Company Charter, shall there be earnings after the annual settlement, the earnings shall offset the accumulated deficit from the previous years, and pay all the taxes, and 20% of the remaining shall be provided as the legal reserve. However, if the legal reserve reaches the total capital of the Company, the said requirement is not applicable. When the special reserve is provided or reversed based on laws, the remaining amount may be combined with the balance of the undistributed earnings at the beginning of the period and the adjusted amount of the undistributed earnings of the year, for the purpose of proposing the earnings distributions for the shareholders’ meeting to determine. For the motion for distribution of earnings referred to in the preceding paragraph, the distributable dividends and bonuses, in whole or in part, are paid in cash after a resolution has been adopted by a majority votes at a meeting of the Board of Directors attended by twothirds of the total number of directors, and a report of such distribution shall be submitted to the shareholders’ meeting. For the policy for distributing compensation of employees and directors specified in the Company Charter, please refer to Note 20(7), “Compensations of Employees and Directors.”

The Company is an insurance enterprise. As the competition has been intensifying since the opening of the insurance market, by taking into account of the ability of covering of the Company, enhancement of solvency, future needs of funds, and the long-term financial plans, as well as to properly meet the shareholders’ demand for cash inflows, the Board of Directors takes stable and balanced dividend policy for the profit distribution proposal of the year, and adjust the percentage of the equity dividend and cash dividends upon its discretions. The cash dividends are no less than 10% of

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the total dividends; however, if the cash dividend per share is lower than NT$0.1, it may be distributed in equity dividend.

Based on the “Regulations Governing Various Reserves of Insurance Enterprises” amended by the Letter Jin-Guan-Bao-Cai-Zi No. 09802513192, December 28, 2009, from January 1, 2011, the new provisions of the special reserves for material accidents and the special reserves for hazard changes each year shall be accounted to special reserves at the end of each year. Therefore, the earning of this portion shall not be distributed or used of other purpose. As of December 31, 2021 and 2020, the net provision was NT$242,971 thousand and NT$172,097 thousand, respectively.

The legal reserve shall be provided until the balance achieve the amount of the total paid-up capital of the Company; the legal reserve can be used to offset the deficits. Where the Company did not operate at a loss, the part of the legal reserve in excess of 25% of the paid-in capital could be taken as capital and may be allocated in cash as well. Furthermore, based on Jin-Guan-Bao-Cai-Zi No. 10202501991, “the insurance enterprises that intend to distribute the legal reserve and capital surplus in cash pro rata to the original holdings of shareholders based on Article 241 of the Company Act shall meet certain criteria”, to enhance the solvency and strengthen the operation of the companies, not only to meet the abovementioned criteria are to be met, the following requirements are also to be met, and such distribution shall be approved by FSC before the shareholders’ meeting, the legal reserve and capital surplus may be distributed in cash based on Article 241 of the Company Act.

The criteria specified in Jin-Guan-Bao-Cai-Zi No. 10202501991 are as follows:

1. The legal reserve provided based on Paragraph 1, Article 145-1 of the Insurance Act has achieved the total amount of paid in capital or funds.

2. The ratio of self-owned capital to the risk capital has achieved 250% after deducting the distribution of earnings in cash, cash distributed from capital reserve, and cash distributed from legal reserve.

3. The latest financial report for the year and six months (if the application date exceeding more than six month over the year) are certified by CPA without reserved opinion.

4. The improvements have been made according to the advices for internal control provided by CPA when conducting auditing and certification within the latest year and six months (if the application date exceeding more than six month over the year) .

5. 66 -

6. No fine over NT$1 million has been enforced by the competent authorities within the past year. However, shall the tangible improvement against these violations have been made and approved by the competent authorities, the previous requirement does not apply.

7. Healthy financial business with solvency.

8. There is no deficit or accumulated deficit, and on other fact showing any material internal control defect or possible hurdle to healthy operations.

The Company's motion for 2020 and 2019 allocation of earnings is stated as following:

following:
Legal reserve Special reserve Cash dividend	Disposition of net earnings 2020 2019 $ 142,688 $ 139,252 170,425 197,621 398,421 362,201	Dividends Per Share ($)
	2020 $ 142,688 170,425 398,421	2020 $ 1.1	2019
			$ 1.0

Said cash dividends have been allocated upon resolution of the Board of Directors on March 26, 2021 and March 20, 2020. The remainder of the earnings will be disposed of per the resolution made at the general shareholders’ meeting on August 20, 2021 and June 12, 2020.

The motion for 2021 allocation of earnings drafted by the Board of Directors on March 18, 2022 is stated as following:

Legal reserve Special reserve Cash dividend	Disposition of net earnings $ 108,410 242,300 271,651	Dividends Per Share ($)
		$ 0.75

Said cash dividends have been allocated upon resolution of the Board of Directors. The remainder will be disposed of per the resolution made at the general shareholders' meeting on June 10, 2022.

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(IV) Special reserve

The movement of special reserve of 2021 and 2020 are as follows:

2020 Balance - beginning of year Accounted of the year Recovery of the year Balance - end of year 2021 Balance - beginning of year Accounted of the year Recovery of the year Balance - end of year	Special reserves Provisions by initial application of IFRSs Special reserve form fin-tech employee transformation $ 1,735,507 $ 671,714 $ 8,330 238,213 - - ( 66,116) ( 14,267) ( 1,672) ( $ 1,907,604 $ 657,447 $ 6,658 Special reserves Provisions by initial application of IFRSs Special reserve form fin-tech employee transformation Special reserve for personal travel insurance $ 1,907,604 $ 657,447 $ 6,658 $ - 291,225 - - 1,110 ( 48,254) ( 4,841) ( 1,781) - $ 2,150,575 $ 652,606 $ 4,877 $ 1,110	Special reserves Provisions by initial application of IFRSs Special reserve form fin-tech employee transformation $ 1,735,507 $ 671,714 $ 8,330 238,213 - - ( 66,116) ( 14,267) ( 1,672) ( $ 1,907,604 $ 657,447 $ 6,658 Special reserves Provisions by initial application of IFRSs Special reserve form fin-tech employee transformation Special reserve for personal travel insurance $ 1,907,604 $ 657,447 $ 6,658 $ - 291,225 - - 1,110 ( 48,254) ( 4,841) ( 1,781) - $ 2,150,575 $ 652,606 $ 4,877 $ 1,110	Special reserves Provisions by initial application of IFRSs Special reserve form fin-tech employee transformation $ 1,735,507 $ 671,714 $ 8,330 238,213 - - ( 66,116) ( 14,267) ( 1,672) ( $ 1,907,604 $ 657,447 $ 6,658 Special reserves Provisions by initial application of IFRSs Special reserve form fin-tech employee transformation Special reserve for personal travel insurance $ 1,907,604 $ 657,447 $ 6,658 $ - 291,225 - - 1,110 ( 48,254) ( 4,841) ( 1,781) - $ 2,150,575 $ 652,606 $ 4,877 $ 1,110	Special reserves Provisions by initial application of IFRSs Special reserve form fin-tech employee transformation $ 1,735,507 $ 671,714 $ 8,330 238,213 - - ( 66,116) ( 14,267) ( 1,672) ( $ 1,907,604 $ 657,447 $ 6,658 Special reserves Provisions by initial application of IFRSs Special reserve form fin-tech employee transformation Special reserve for personal travel insurance $ 1,907,604 $ 657,447 $ 6,658 $ - 291,225 - - 1,110 ( 48,254) ( 4,841) ( 1,781) - $ 2,150,575 $ 652,606 $ 4,877 $ 1,110	Special reserves Provisions by initial application of IFRSs Special reserve form fin-tech employee transformation $ 1,735,507 $ 671,714 $ 8,330 238,213 - - ( 66,116) ( 14,267) ( 1,672) ( $ 1,907,604 $ 657,447 $ 6,658 Special reserves Provisions by initial application of IFRSs Special reserve form fin-tech employee transformation Special reserve for personal travel insurance $ 1,907,604 $ 657,447 $ 6,658 $ - 291,225 - - 1,110 ( 48,254) ( 4,841) ( 1,781) - $ 2,150,575 $ 652,606 $ 4,877 $ 1,110	Special reserves Provisions by initial application of IFRSs Special reserve form fin-tech employee transformation $ 1,735,507 $ 671,714 $ 8,330 238,213 - - ( 66,116) ( 14,267) ( 1,672) ( $ 1,907,604 $ 657,447 $ 6,658 Special reserves Provisions by initial application of IFRSs Special reserve form fin-tech employee transformation Special reserve for personal travel insurance $ 1,907,604 $ 657,447 $ 6,658 $ - 291,225 - - 1,110 ( 48,254) ( 4,841) ( 1,781) - $ 2,150,575 $ 652,606 $ 4,877 $ 1,110	Special reserves Provisions by initial application of IFRSs Special reserve form fin-tech employee transformation $ 1,735,507 $ 671,714 $ 8,330 238,213 - - ( 66,116) ( 14,267) ( 1,672) ( $ 1,907,604 $ 657,447 $ 6,658 Special reserves Provisions by initial application of IFRSs Special reserve form fin-tech employee transformation Special reserve for personal travel insurance $ 1,907,604 $ 657,447 $ 6,658 $ - 291,225 - - 1,110 ( 48,254) ( 4,841) ( 1,781) - $ 2,150,575 $ 652,606 $ 4,877 $ 1,110	Special reserves Provisions by initial application of IFRSs Special reserve form fin-tech employee transformation $ 1,735,507 $ 671,714 $ 8,330 238,213 - - ( 66,116) ( 14,267) ( 1,672) ( $ 1,907,604 $ 657,447 $ 6,658 Special reserves Provisions by initial application of IFRSs Special reserve form fin-tech employee transformation Special reserve for personal travel insurance $ 1,907,604 $ 657,447 $ 6,658 $ - 291,225 - - 1,110 ( 48,254) ( 4,841) ( 1,781) - $ 2,150,575 $ 652,606 $ 4,877 $ 1,110			Total
										$	2,415,551 238,213 82,055) 2,571,709 Total
										$
										(
	(	$ 1,907,604 291,225 48,254) $ 2,150,575	(	$ 657,447 - 4,841) $ 652,606	(	$ 6,658 - 1,781) $ 4,877		$ - 1,110 - $ 1,110			$ 2,571,709 292,335 54,876) $ 2,809,168

When the Company initially applied IFRSs, the unrealized value added amount from the re-evaluation is NT$698,510 thousand, and the special reserve has been provided for the same amount. As of the reporting date, for the disposal of property and equipment, NT$45,904 thousand of special reserve provided for the unrealized value added amount from the re-evaluation for real estate, will be reversed.

The special reserve provided for the investment properties other than lands when initially applying IFRSs, may be reversed period by period during the usage period. The special reserve provided for lands, may be reversed when being disposed or reclassified. When distributing earnings, the special reserve shall be provided for the difference between the net deduction under other equity to shareholders and the special reserve provided for the initial application of IFRSs. Afterwards, if there is any reversal for the deduction under other equity to shareholders, the reversed portion may be distributed of earnings.

Based on Jin-Guan-Bao-Cai-Zi No. 10502066461 Letter on July 13, 2016, to respond to the development trend of fin-tech, assist the employees of insurance enterprises, and protect their interests, an insurance enterprises shall, when distributing the earnings of FY 2016 to 2018, a special reserve shall be made based on the range of 0.5% to 1% of after-tax earning against the distributable earnings. According to the

• 68 -

decree under Jin-Guan-Bao-Cai-Zi No. 10804932431 dated July 30, 2019, since the fiscal year of 2019, when disbursing related expenses, the insurance industry may reverse the same amount within the balance of the special reserve provided by the earnings of the fiscal years of 2016–2018.

According to the decree under Jin-Guan-Bao-Cai-Zi No. 10904939031 dated October 29, 2020, in order to build the insurance industry’s robust financial structure, the insurance industry shall, at the end of each fiscal year, set aside the special reserve equivalent to 10% of the balance after the total insurance premium calculated based on the insured value and days for the personal travel accidental death and permanent disability benefits policies sold in that year less 20% nominal tax rate, in accordance with the “Personal Travel Insurance Accidental Death and Permanent Disability Benefits Standard Rate Table.”

(V)

Other equity

Unrealized valuation gain and losses on financial assets at fair value through other comprehensive income

comprehensive income
		2021			2020
Balance - beginning of year		$ 108,744	($		46,941)
Those yielded in the current
term
Unrealized profit/loss
Liability instruments	(	38,369 )			35,416
Equity instrument		668,937			131,256
Adjustment to the
allowance loss of bond
instrument	(	105)	(		378)
Other comprehensive profit
(loss) for the period		630,463			166,294
The accumulated profit/loss by
disposing equity instrument
transferred to the retained
earnings	(	168,491)	(		10,609)
Balance - end of year		$ 570,716		$	108,744

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XX. Net Income from Continuing Operation

(I) Financial assets at fair value through profit (or loss)

Gain on disposal Dividend Evaluated benefits (loss) Equity instrument Liability instruments	2021 $ 97,836 8,349 ( 24,716 ) ( 6,060) $ 75,409		2020
			$ 9,780 10,255 35,949 8,476 $ 64,460

(II) Realized gain and losses on financial assets at fair value through other comprehensive income

income
Dividend Gain (loss) on disposal (III) Investment Property profit (or loss)		2021 $ 143,403 1,808 $ 145,211		2020
				$ 139,225 4,054 $ 143,279

Investment Property profit (or loss)
Rental revenue from investment properties Gain/Loss of disposal of investment properties Direct operational expenses of investment properties		2021 $ 112,759 3,688 35,509) $ 80,938		2020
	(		(	$ 110,165 32,206 33,516) $ 108,855

• (IV) Expected credit impairment losses and reversal of gains of investments

2021 Bond instruments measured at fair value through other comprehensive income $ 105 Gain (loss) of Foreign Currency Exchange 2021 Gain (loss) of investment exchange ($ 17,216 ) Other gain (loss) of exchange ( 9,982) ($ 27,198)		2020
		$ 378 2020
	($ 35,052 ) ( 12,350) ($ 47,402)

(V) Gain (loss) of Foreign Currency Exchange

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(VI) Summary of nature of employee benefits, depreciation and amortization for the period

		2021			2020
	Classified as operating cost	Classified as operating expense	Total	Classified as operating cost	Classified as operating expense	Total
Employee fringe benefit expenses	$ 292,912	$ 687,620	$ 980,532	$ 247,596	$ 758,966	$1,006,562
Salaries expense	292,912	540,287	833,199	247,596	616,790	864,386
Expenses for labor and health insurance	-	70,476	70,476	-	59,885	59,885
Pension expense	-	34,194	34,194	-	29,955	29,955
Remuneration to directors	-	27,373	27,373	-	36,725	36,725
Other employee fringe benefit expenses	-	15,290	15,290	-	15,611	15,611
Depreciation expense - Property and equipment	-	14,410	14,410	-	14,606	14,606
Depreciation expense - Investment properties	18,943	-	18,943	19,455	-	19,455
Depreciation expense - Right- of-use assets	-	25,615	25,615	-	24,793	24,793
Amortization expenses	-	5,543	5,543	-	3,226	3,226

• Note 1: The amount of employees for this year and the previous year is 926 and 899,

• respectively; among them, 11 and 9 directors do not concur as employees.

• Note 2: The average employee benefit expenses for the year and the previous year were NT$1,042 thousand and NT$1,090 thousand.

• Note 3: The average employee salary expenses for the year and the previous year were NT$911 thousand and NT$971 thousand.

• Note 4: The average employee salary expense adjusted by ( 6.18 ) %.

• Note 5: The remuneration to the Company’s directors (including independent directors) and managers shall be defined based on the Company’s entire operating results, future business risk and development trend for the industry, and in reference to the personal performance achievement rate and contribution to the Company. The related performance assessment and reasonableness of salary and remuneration are already reviewed and approved by Remuneration Committee and Board of Directors. Meanwhile, the remuneration system will be reviewed from time to time subject to the

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overview of business and related laws, in order to balance the Company’s sustainability and risk control. The remuneration to employees shall be defined based on the salary market’s conditions, the Company’s overview of operation and organizational structure, and in reference to the employees’ academic background/work experience, professional knowledge and expertise, seniority and personal performance. Meanwhile, bonus will be distributed subject to the Company’s operating performance and employees’ personal performance.

(VII) Compensation to Employees and Remuneration to Directors

The Articles of Incorporation amended by the Company has been approved per the resolution made by the shareholders’ meeting on June 12, 2020. Based on the amended Articles of Incorporation, the Company allocated the remuneration to employees and directors at 1–5% and no more than 5% of the pre-tax profit before allocating the remuneration to employees and directors in the year. No independent directors were allowed to participate in the allocation of remuneration to directors. Based on the Articles of Incorporation before the amendments thereto, the Company provided the remuneration to employees and directors at 1–5% and no more than 5% of the pre-tax profit before allocating the remuneration to employees and directors in the year. The estimated employees’ compensation and directors’ remuneration for 2021 and 2020 are respectively resolved by the Board of Directors on March 18, 2022 and March 26, 2021, as the following:

Percentage of estimation

Percentage of estimation
Employee compensation Directors’ remuneration Amount Employee Compensation Directors’ remuneration		2021 2.5755% 2.5755% 2021 $ 10,955 $ 10,955		2020
				2.50% 2.50% 2020
				$ 20,340 $ 20,340

Shall there be any change to the annual financial report after the reporting date, the accounting treatment shall be applied, and the adjustment is accounted in the next year.

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The estimated employees’ compensation and directors’ remuneration for 2020 and 2019 are respectively resolved by the Board of Directors on March 26, 2021 and March 20, 2020, as the following:

March 20, 2020, as the following:
Employee Compensation Directors’ remuneration		2020 Cash $ 20,340 $ 20,340		2019
				Cash
				$ 21,939 $ 21,939

The actual resolved amounts for the employees’ compensation and directors’ remuneration for 2020 and 2019 are not different from the amounts recognized in the financial statement of 2020 and 2019.

For the information about remuneration o employees and directors resolved by the Board of Directors, please check the “Market Observation Post System” at TWSE.

XXI. Income Tax of the Units in Continued Business Operation

• (I) Income tax recognized in profit and/or loss

The income tax expenses are primarily composed of the following items:

Income tax for the current Incurred in the year Additional business profit tax levied on unappropriated retained earnings Adjustment of previous year(s) Deferred income tax Incurred in the year The income tax expenses recognized in profit and/or loss		2021 $ 37,494 95 615 38,204 7,971) $ 30,233		2020
	(		( (	$ 106,899 - 6,511) 100,388 15,044) $ 85,344

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The reconciliations of accounting incomes and income tax expense are as follows:

2021 Net Income before income tax from continuing operation $ 403,441 The income tax expense for the pre-tax net profit is calculated based on the mandatory tax rates $ 80,688 Loss in expense which could not be reduced from tax 6,689 Exempted from income tax ( 57,443) Difference payable for the income basic tax 1,027 Additional business profit tax levied on unappropriated retained earnings 95 Temporary difference not recognized. ( 1,438) Adjustment from utilizing the current income tax expense of the previous year to the year. 615 The income tax expenses recognized in profit and/or loss $ 30,233 (II) Income tax recognized in equity directly 2021 Income tax for the current Incurred in the year - Difference payable for the income basic tax $ 1,976 (III) Income tax recognized under other comprehensive income 2021 Deferred income tax Incurred in the year - Remeasurement of defined benefit plans ($ 629) (IV) Income tax liabilities of the period December 31, 2021 Income tax liabilities of the period Income tax payable $ 31,147 (V) Deferred income tax assets and liabilities		2020
	$ 772,939 $ 154,588 ( 7,094) ( 48,216) - - ( 7,423) ( 6,511) $ 85,344 2020
		$ - 2020
	$ 243 December 31, 2020
		$ 38,823

• 74 -

The deferred income tax assets and liabilities show the following changes:

2021

2021
DEFERRED INCOME TAX ASSETS Temporary difference Excesses of allowance for losses Pension exclusions Loss in actuarial calculation of ascertained fringe benefits Unrealized foreign exchange losses DEFERRED INCOME TAX LIABILITIES Temporary difference Land revaluation increment 2020 DEFERRED INCOME TAX ASSETS Temporary difference Excesses of allowance for losses Pension exclusions Loss in actuarial calculation of ascertained fringe benefits Unrealized foreign exchange losses DEFERRED INCOME TAX LIABILITIES Temporary difference Land revaluation increment		Balance - beginning of year $ 5,021 4,428 12,047 15,204 $ 36,700 $ 266,669 Balance - beginning of year $ 3,488 4,535 12,290 9,009 $ 29,322 $ 274,092		Recognized into profit and/or loss $ 5,899 452 ) - 5 $ 5,452 $ 2,519) Recognized into profit and/or loss $ 1,533 107 ) - 6,195 $ 7,621 $ 7,423)	Recognized under other comprehensive income $ - - 629 - $ 629 $ - Recognized under other comprehensive income $ - - ( 243 ) - ($ 243) $ -	Balance - end of year
			( (			$ 10,920 3,976 12,676 15,209 $ 42,781 $ 264,150 Balance - end of year
			( (		( (		$ 5,021 4,428 12,047 15,204 $ 36,700 $ 266,669

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(VI) Verification of income tax

The Company’s profit-seeking enterprise income tax returns through 2019 have been examined and approved by the tax authority.

XXII. Earnings Per Share (EPS)

Earnings Per Share (EPS)
Basic EPS Diluted EPS		2021 $ 1.03 $ 1.03		2020
				$ 1.90 $ 1.89

The average amounts of shares for calculating the net profit of EPS and the average weighted of common shares are as follows:

Net Profit for the Period

Net Profit for the Period
Net profit attributed to the shareholders of the Company/ Net profit used to calculate EPS Net profit attributed to the shareholders of the Company/ Net profit used to calculate diluted EPS Shares, Unit: thousand shares The weighted average number of common shares to be used to calculate basic earnings per share (EPS) Potential impact of common stock with dilution: Employee compensation The weighted average number of common shares to be used to calculate diluted earnings per share (EPS)		2021 $ 373,208 $ 373,208 2021 362,200 753 362,953		2020
				$ 687,595 $ 687,595 2020
				362,200 1,265 363,465

If the Company may opt to release the employees’ compensation in shares or cash, the calculation of diluted EPS assumes the employees’ compensation is released in shares, and included the weighted average outstanding shares when such common shares have diluting effect, to calculate the diluted EPS. When calculating the diluted EPS before resolving the amount of shares to be released as the employees’ compensation in the next year, the diluting effects of such potential common shares are taken into account still. XXIII. Capital risk management

• 76 -

The ratio of self-owned capital to the risk capital, defined by the “Regulations Governing Capital Adequacy of Insurance Companies.” The Company applies the ratio of capital adequacy as the managerial benchmark of capital adequacy.

The basic goal of the self-owned capital management of the Company is that the self-owned capital of the Company shall be sufficient to meet the regulatory capital requirement, as well as the minimum mandatory ratio of capital adequacy. Regarding the provision calculation of the qualified self-owned capital, the regulations of the competent authorities shall be followed. To cause the Company owns sufficient capitals to assume various risks, the needed capitals shall be evaluated based on the risk portfolios faced by the Company and their risk characteristics, and the optimization of the resource allocation shall be achieved by executing risk management via resource allocation.

XXIV. Financial Instruments

• (I) Information of Fair Value - financial instruments at fair value on the repetitive basis.

• Level of fair value

December 31, 2021

December 31, 2021
Financial assets at fair value through profit or loss TWSE/GTSM listed shares Beneficiary certificates of funds Domestic financial bonds Overseas financial bonds Domestic corporate bonds Total Financial assets at fair value through other comprehensive income Investments in equity instruments - TSEC/GTSM listed shares - Unlisted domestic shares		Level 1 $ 159,441 127,034 - - - $ 286,475 $ 3,901,930 -		Level 2 $ - - - 129,087 - $ 129,087 $ - -		Level 3 $ - 44,742 1,202,403 - 518,316 $ 1,765,461 $ - 466,176		Total
								$ 159,441 171,776 1,202,403 129,087 518,316 $ 2,181,023 $ 3,901,930 466,176

(To be continued)

• 77 -

(Continued)

Investments in liability instruments - Domestic government bonds - Domestic financial bonds - Domestic corporate bonds - Overseas corporate bonds - Overseas financial bonds Total December 31, 2020 Financial assets at fair value through profit or loss TWSE/GTSM listed shares Beneficiary certificates of funds Domestic financial bonds Domestic corporate bonds Total Financial assets at fair value through other comprehensive income Investments in equity instruments - TWSE/GTSM listed shares and emerging shares - Unlisted domestic shares Investments in liability instruments - Domestic government bonds - Domestic financial bonds - Domestic corporate bonds - Overseas corporate bonds - Overseas financial bonds Total		Level 1 $ - - - - - $ 3,901,930 Level 1 $ 204,920 156,780 - - $ 361,700 $ 3,310,661 - - - - - - $ 3,310,661		Level 2 $ 603,630 99,998 103,518 752,450 - $ 1,559,596 Level 2 $ - - - - $ - $ - - 622,187 49,998 104,110 693,692 - $ 1,469,987		Level 3 $ - - - - 138,211 $ 604,387 Level 3 $ - - 1,054,592 522,397 $ 1,576,989 $ - 358,056 - - - - 142,258 $ 500,314		Total
								$ 603,630 99,998 103,518 752,450 138,211 $ 6,065,913 Total
								$ 204,920 156,780 1,054,592 522,397 $ 1,938,689 $ 3,310,661 358,056 622,187 49,998 104,110 693,692 142,258 $ 5,280,962

• 78 -

There was no transfer between fair value measurement level 1 and level 2 in 2021 and 2020.

• 79 -

• Reconciliation for the financial instruments measured at fair value level 3

2021

2021
Financialassets	Financial assets at fair value through profit or loss		Financial assets at fair value through other comprehensive income			Total $ 2,077,303 ( 1,128) ( 4,050) 147,521 ( 35,059) 239,600 ( 54,339) $ 2,369,848 ($ 5,178) Total
	Liability instruments	Beneficiary certificates of funds	Liability instruments	Equity instrument
Balance - beginning Recognized in Profit/Loss (gain/loss on financial assets and liabilities at fair value through profit or loss) Recognized into income －exchange profit and/or loss Recognized in other comprehensive income (unrealized profit/loss at fair value through other comprehensive income) Disposition Purchase Others Balance - ending Other unrealized gain/loss of the current 2020 Financial assets					) )
					$ ( ( ( ( $ $	$	1,913,990 8,861 7,750) 68,847 329,280 52,286) 30,652) 152,987) 2,077,303 1,111
						$

2020

• 80 -

The transfer from Level 3 in 2020 was primarily a result of the equity instrument at fair value through other comprehensive income converted from domestic unlisted shares from emerging shares. In consideration of the available market quotation and active trading, it was transferred from Level 3 to Level 1 accordingly.

1. The evaluation skills and inputs for Level 2 fair value measurement

The evaluation skills and inputs	for Level 2 fair value measurement
Categories of financial instruments TSEC/GTSM listed bond investments	Evaluation skills and inputs
	Cash Flow Discount Method: Discounting Based on the Market Interest Rate Reflecting the Similar Products of the Issuers at the End of Period and the Credit Rating.

1. The evaluation skills and inputs for Level 3 fair value measurement

The evaluation skills and inputs	for Level 3 fair value measurement
Categories of financial instruments TSEC/GTSM listed bond investments Investments in unlisted domestic shares and beneficiary certificates of funds	Evaluation skills and inputs
	Based on cash flow discount approach, the present value of incomes to be obtained by holding the investment. The material unobservable input is the discount factor (yield), is obtained by considering the premium reward of risks and the reference interest rate of corporate bonds. Based on the asset-based approach, reflect the entire value of the enterprise or business in terms of the total market values for the individual assets and liabilities applicable to the evaluated subject. The material unobservable input is the liquidity discount, minority interest discount, and financial information of the investees.

The Company’s measurement of the fair value of financial instruments is reasonable; however, if different evaluation models or parameters are applied,

the outcome of evaluations may be different. For the financial instrument classified as Level 3, the effects to market value when evaluation parameters change are as follows:

• 81 -

Item	Inputs value	Ranges	Upward or downward changes	Effect of changes in fair value	Effect of changes in fair value
				Positive change	Negative change
December 31, 2021 ASSETS Bond investment Stock investment Beneficiary certificates of funds December 31, 2020 ASSETS Bond investment Stock investment	Discount Rate Financial Information of the Investees Liquidity Discount Minority Interest Discount Financial Information of the Investees Discount Rate Financial Information of the Investees Liquidity Discount Minority Interest Discount	1.31%~3.96% $ 17,674 10% 10% $ 44,742 1.31%~4.01% $17,770~$19,710 10% 10%	100 bp change upward 5% change downward 10% change upward 10% change upward 5% change downward 100 bp change upward 5% change downward 10% change upward 10% change upward	$ - - - - - - - - -	( $ 425,427 ) ( 259 ) ( 51,797 ) ( 51,797 ) ( 671 ) ( 385,466 ) ( 1,426 ) ( 39,554 ) ( 39,554 )

The positive and negative changes of the Company refer to the fluctuation of the fair value; the fair value is obtained by calculating with the evaluation skills of the unobservable input parameters at different degrees.

Shall the financial instrument is affected by one or more inputs, the table above only reflect the effect incurred from one single input change, without considering the relativeness and variability among inputs.

(II) Categories of financial instruments

ategories of financial instruments
Financial assets At fair value through profit and loss Financial assets carried at amortized cost (note 1) At fair value through other comprehensive income Investments in equity instruments Investments in liability instruments Financial liabilities At amortized cost (note 2)	December 31, 2021 $ 2,181,023 8,090,323 4,368,106 1,094,177 934,450	December 31, 2020
		$ 1,938,689 8,239,511 3,668,717 990,058 1,029,277

• 82 -

• Note 1: The balance includes the financial assets at amortized costs, such as cash and cash equivalents, note receivables, premium receivables, other receivables, claim recoverable from reinsurers, due from reinsurers and ceding companies, other financial assets - net, and refundable deposits.

• Note 2: The balance includes financial liabilities at amortized costs, such as the claims payable, commissions payable, due to reinsurers and ceding companies, other payable, and refundable deposit.

• (III) The objectives and policies of financial risk management

The major financial instruments of the Company include the equity and bond instrument investment, receivables, and payables. The financial management department of the Company supervises, and manages the financial risks related to the Company’s operation based on internal risk report analyzing the degrees and breadth of exposures. Such risks include market risks (including foreign exchange risks, interest rate risks, and other price risks), credit risks and liquidity risks. The Risk Management Committee, subordinated to the Board of Directors, established by the Company is the independent organization established solely for supervising risks and policy implementation to reduce exposures.

1. Market risk

The operating activities of the Company cause the Company to assuming the major financial risks as the risk of foreign exchange change (refer to following (1)) and the risk of interest rate change (refer to following (2)).

The Company’s exposure to market risks of financial instruments, and approaches toward managing and measuring such exposures have not changed.

• (1) Foreign exchange rate risk

For the currency assets and currency liabilities denominated in nonfunctional currency on the balance sheet date, please refer to Note 30.

Analysis of sensitivity

The Company is mainly affected by the fluctuation of USD.

The following table explains in detail the analysis of sensitivity when the exchange rates of NT$ (the functional currency) against other related foreign currencies increase or decrease 1%. 1% is the sensitivity percentage used when internally reporting the exchange rate risks to the major management, as well as represents the evaluation for the reasonably possible extent of changes of foreign exchange by the management. The

• 83 -

analysis of sensitivity only includes the outstanding foreign currency items, and the translation at the end of period is adjusted at 1% of exchange rate change. The positive figures in the following table are the amount increased for the pre-tax net profit or equity when NT$ against the related currencies appreciate 1%; when NT$ against the related currencies depreciate 1%, the effects to the pre-tax net profit or equity will be negative at the same amount.

Profit and loss (i)	Effects from USD 2021 2020 $ 9,626 $ 8,624	Effects from RMB	Effects from RMB
	2021 $ 9,626	2021 $ 3,059	2020
			$ 2,411

• (i) Mainly originated from the USD and RMB denominated financial instruments outstanding on the balance sheet date and without being hedged against the cash flows.

• (2) Interest rate risks

At the balance sheet date, the carrying amount of financial assets exposed to interest rates are as follows:

December 31, 2021 December 31, 2020 Interest rate risk with fair value - Financial assets $ 3,547,613 $ 3,189,233

Analysis of sensitivity

The following analyses of sensitivity are determined based on the interest rate exposure of the non-derivative instruments at the balance sheet dates. When internally reporting the interest rates to the major management, the variable interest rates applied is the interest rates increase or decrease 100 base points, and also represent the evaluation for the reasonably possible extent of changes of interest rate by the management.

If the interest rate increases for 100 base points, while other variables are kept the same, the other comprehensive income after tax during 2021 and 2020 will decrease by NT$489,975 thousand and NT$445,276 thousand, respectively, the main reason is the changes from the fair value of the fixed interest rate debt instruments.

• (3) Other Price Risks

• 84 -

The Company suffered the equity price risk arising from the investment in equity securities and beneficiary certificates of funds. Analysis of sensitivity

The following analyses of sensitivity are determined based on the price risk over equity securities and beneficiary certificates of funds at the balance sheet dates.

If the equity price increased/dropped by 1%, the income before tax would have increased/decreased by NT$3,312 thousand and NT$3,617 thousand due to the increase/decrease in the fair value of financial assets at fair value through profit or loss from 2021 and 2020. The other comprehensive income would have increased/decreased by NT$43,681 thousand and NT$36,687 thousand due to the increase/decrease in the fair value of other financial assets at fair value through comprehensive income from 2021 and 2020.

2. Credit risk

Credit risk represents the potential loss that would be incurred by the Company if the counter-parties or third parties breached the contracts. The Company’s financial instruments are affected by its credit risk concentration, component, contract amounts and other receivables. As the counterparties of the Company are the creditworthy financial institutions with low possibility of default, it is expect the material credit risk is unlikely.

• Credit risk exposure by territory

December 31, 2021

December 31, 2021
Financial assets	Taiwan	Asia	America	Others	Total
Cash and cash equivalents	$ 4,202,249	$ -	$ -	$ -	$ 4,202,249
Financial assets at fair value through profit or loss	1,849,806	-	-	-	1,849,806
Financial assets at fair value through other comprehensive income	1,096,307	149,947	81,931	369,622	1,697,807
Total	$7,148,362	$ 149,947	$ 81,931	$ 369,622	$7,749,862
% by territory	92.24%	1.93%	1.06%	4.77%	100%

• 85 -

December 31, 2020

December 31, 2020
Financial assets	Taiwan	Asia	America	Others	Total
Cash and cash equivalents	$ 3,741,100	$ -	$ -	$ -	$ 3,741,100
Financial assets at fair value through profit or loss	1,576,989	-	-	-	1,576,989
Financial assets at fair value through other comprehensive income	1,108,404	250,050	-	253,791	1,612,245
Total	$6,426,493	$ 250,050	$ -	$ 253,791	$6,930,334
% by territory	92.73%	3.61%	-	3.66%	100.00%

3. Liquidity risk

The Company maintained sufficient fund to meet our operating capital requirements. Therefore, no liquidity risks associated with failure to source required funding are anticipated.

Liquidity of non-derivative financial liabilities and statement of interest rate risk

The following Table shows the analysis on the remaining contractual maturity for the non-derivative financial liabilities for which the Company has agreed on the repayment term. It was prepared based on the earliest date the Company might be asked to make the repayment, as well as the undiscounted cash flow from the financial liabilities.

December 31, 2021

December 31, 2021
Liabilities without interest Lease liabilities	On demand or shorter than 3 months $ 665,133 5,796 $ 670,929		3 months – 1 year $ 15,491 24,034 $ 39,525		1-5 years $ 20,045 32,678 $ 52,723		More than 5 years
							$ 8,123 - $ 8,123

December 31, 2020

December 31, 2020
Liabilities without interest Lease liabilities	On demand or shorter than 3 months $ 763,639 5,526 $ 769,165		3 months – 1 year $ 15,134 23,984 $ 39,118		1-5 years $ 17,006 44,303 $ 61,309		More than 5 years
							$ 7,410 - $ 7,410

• 86 -

(IV) Based on Article 7 of the “Regulations Governing Insurance Enterprises Engaging in Operating Reinsurance and Other Risk Spreading Mechanisms”, the unqualified counterparties for the ceding reinsurance of the Company by December 31, 2021 are as follows:

ollows:
Counterparties of Reinsurance	Insurance type
Lemma Insurance Company	Temporary ceding reinsurance for marine hull insurance
Tugu Insurance Company Limited	Temporary ceding reinsurance for commercial fire insurance, marine cargo insurance, and marine hull insurance.
Trust International Insurance & Reinsurance Company B.S.C.(c), Trust Re	Temporary ceding reinsurance for commercial fire insurance, and marine hull insurance.
Asia Capital Reinsurance Group Pte Ltd	Temporary ceding reinsurance for marine hull insurance and aviation insurance, and cargo reinsurance.
Asia Capital Reinsurance Group Pte Ltd Hong Kong Branch Office	Temporary ceding reinsurance for commercial fire insurance, and commercial fire reinsurance and cargo reinsurance.

The unqualified premium expense is NT$0 thousand, the reserves for unqualified

reinsurance is NT$779 thousand, all belongs to the ceding claims reported but not claimed reserves.

Based on Article 7 of the “Regulations Governing Insurance Enterprises Engaging in Operating Reinsurance and Other Risk Spreading Mechanisms”, the unqualified counterparties for the ceding reinsurance of the Company by December 31, 2020 are as follows:

31, 2020 are as follows:
Counterparties of Reinsurance	Insurance type
Lemma Insurance Company	Temporary ceding reinsurance for marine hull insurance
Tugu Insurance Company Limited	Temporary ceding reinsurance for commercial fire insurance, marine cargo insurance, and marine hull insurance.
Trust International Insurance & Reinsurance Company B.S.C.(c), Trust Re	Temporary ceding reinsurance for commercial fire insurance, and marine hull insurance.
Asia Capital Reinsurance Group Pte Ltd	Temporary ceding reinsurance for marine hull insurance and aviation insurance, and cargo reinsurance.
Asia Capital Reinsurance Group Pte Ltd Hong Kong Branch Office	Temporary ceding reinsurance for commercial fire insurance, and commercial fire reinsurance and cargo reinsurance.

• 87 -

The unqualified premium expense is NT$0 thousand, the reserves for unqualified

reinsurance is NT$849 thousand, all belongs to the ceding claims reported but not claimed reserves.

XXV. Transactions with Related Parties

• (I) Information about the Company’s related parties were as follows

Name of the Related Parties Relationship with the Company Bank of Taiwan Co., Ltd. Major Management Yong-Shin Development Co., Ltd. Major Management Tong-Sheng Development Co., Ltd. Investor with significant effects Navigator Real Estate Co., Ltd. Investor with significant effects Navigator Investment Co., Ltd. Investor with significant effects Taiwan Navigator Asset Investment Co., Related party in substance Ltd. Taiwan Business Bank, Ltd. Related party in substance Goldsun Building Materials Co., Ltd. Related party in substance Bank Taiwan Insurance Brokers Co., Related party in substance Ltd. Taiming Assurance Broker Co., Ltd. Related party in substance Sirtec International Co., Ltd. Related party in substance Hua Nan Commercial Bank, Ltd. Related party in substance Forland Auto Trade Holding Co., Ltd. Related party in substance Taipei Branch (Cayman) Taiwan Fire and Marine Foundation Related party in substance Other related parties Directors, supervisors, chairman, president, managers, their spouses, and the relatives within 2nd degree of kinship

• (II) Significant related-party transactions were as follows

1. Deposit

Checking deposits and Demand deposits:

Major Management Bank of Taiwan Co., Ltd. Related party in substance Taiwan Business Bank Hua Nan Commercial Bank	December 31, 2021 $ 1,079,652 72,445 1,791 $ 1,153,888	December 31, 2020	December 31, 2020
			$ 638,950 65,498 1,468 $ 705,916

• 88 -

Time deposits (including cash and cash equivalents, and other financial assets

listed in accounts):

listed in accounts):
Major Management Bank of Taiwan Co., Ltd. Related party in substance Taiwan Business Bank	December 31, 2021 $ 246,745 131,461 $ 378,206	December 31, 2020
			$ 241,665 137,017 $ 378,682

The time deposits in the related parties have the interest rate of 0.06% ~ 1.52% and 0.06% ~ 2.25% for December 31, 2021 and 2020, respectively, with same transaction terms as non-related parties.

1. Premium income (direct policy writing)

Major Management Bank of Taiwan Co., Ltd. Related party in substance Goldsun Building Materials Co., Ltd. Sirtec International Co., Ltd. Taiwan Business Bank Other related parties		2021 $ 3,093 12,779 1,386 2,837 6,192 $ 26,287		2020
				$ 6,719 10,745 1,390 120 33,932 $ 52,906

The insurances to the abovementioned related parties provide the same insurance conditions to unrelated parties.

1. Claims (direct policy writing)

Claims (direct policy writing)
Major Management Bank of Taiwan Co., Ltd. Other related parties		2021 $ 797 6,589 $ 7,386		2020
				$ 2,398 5,263 $ 7,661

The insurances to the abovementioned related parties provide the same claim conditions to unrelated parties.

• 89 -

4. Commission expenditure

Commission expenditure
Major Management Bank of Taiwan Co., Ltd. Related party in substance Bank Taiwan Insurance Brokers Co., Ltd. Taiming Assurance Broker Co., Ltd. (TABC) Other related parties		2021 $ 2,198 30,982 23,038 47,363 $ 103,581		2020
				$ 2,957 29,518 10,691 - $ 43,166

The insurances to the abovementioned related parties provide the same commission conditions to unrelated parties.

1. Lessor Agreement

Operating lease

The operating leases of the Company for the investment properties have the lease period of 1 to 10 years. When the lessees exercise the right of continual lease, the rents are agreed to be adjusted based on the market price. Upon the end of the leasehold duration, the lessees are not entitled to preferential lease right over the investment properties.

The future lease payments to be received are aggregated as the following:

Type/Name of the Related Parties Major Management Yong-Shin Development Co., Ltd. Investor with significant effects Navigator Real Estate Co., Ltd. Tong-Sheng Development Co., Ltd. Navigator Investment Co., Ltd. Related party in substance Taiwan Navigator Assets Forland Auto Trade Holding Co., Ltd. Taipei Branch (Cayman) Sirtec International Co., Ltd. Taiming Assurance Broker Co., Ltd. (TABC)	December 31, 2021 $ 110 264 165 110 649 385 8,671 2,310 $ 12,664	December 31, 2020	December 31, 2020
			$ 220 528 330 220 1,298 770 15,035 11,193 $ 29,594

• 90 -

• (1) The details of the rents received by leasing the investment properties to the

related parties are as follows:

Major Management Yong-Shin Development Co., Ltd. Investor with significant effects Navigator Real Estate Co., Ltd. Tong-Sheng Development Co., Ltd. Navigator Investment Co., Ltd. Related party in substance Taiwan Navigator Assets Forland Auto Trade Holding Co., Ltd. Taipei Branch (Cayman) Sirtec International Co., Ltd. Taiming Assurance Broker Co., Ltd. (TABC)		2021 $ 105 252 157 105 619 367 6,072 7,995 $ 15,672		2020
				$ 105 252 157 105 619 367 6,076 8,474 $ 16,155

• (2) The deposits the Company received for leasing properties to the related parties as of December 31, 2021 and 2020 are as follows:

Major Management Yong-Shin Development Co., Ltd. Investor with significant effects Navigator Real Estate Co., Ltd. Tong-Sheng Development Co., Ltd. Navigator Investment Co., Ltd. Related party in substance Forland Auto Trade Holding Co., Ltd. Taipei Branch (Cayman) Taiwan Navigator Assets Sirtec International Co., Ltd. Taiming Assurance Broker Co., Ltd. (TABC)	December 31, 2021 $ 20 48 30 20 70 118 1,652 1,615 $ 3,573	December 31, 2020	December 31, 2020
			$ 20 48 30 20 70 118 1,652 1,615 $ 3,573

The abovementioned property leasing to the related parties provided the transaction conditions similar to ordinary transactions.

• 91 -

6. Lessee Agreement

Lessee Agreement
Type/Name of the Related Parties Right-of-use assets Investor with significant effects Navigator Real Estate Co., Ltd. Lease liabilities Investor with significant effects Navigator Real Estate Co., Ltd. Type/Name of the Related Parties Interest expense Investor with significant effects Navigator Real Estate Co., Ltd. Total amount of cash (outflow) of lease Investor with significant effects Navigator Real Estate Co., Ltd.	December 31, 2021 $ 6,843 $ 6,924 2021 $ 78 $ 2,393	December 31, 2020
			$ 2,960 $ 3,112 2020
			$ 104 $ 2,408

Leasing properties from Navigator Real Estate Co., Ltd. that has significant effects provided the transaction conditions similar to ordinary transactions.

The Company has leased properties from Navigator Real Estate Co., Ltd. which has significant effects, the outstanding balance of paid deposit at December 31, 2021 and 2020 were both NT$482 thousand.

1. Operating Expenses

2. (1) Other expenses

Other expenses
Related party in substance Taiming Assurance Broker Co., Ltd. (TABC) Donated Related party in substance Taiwan Fire and Marine Foundation		2021 $ 93 2021 $ 6,000		2020
				$ - 2020
				$ 8,000

(2) Donated

• 92 -

To fulfill the CSR, enhance the quality of culture, cultivate talents, care for minorities, for the purpose of contributing to the country and the society, the Company has established the “Taiwan Fire and Marine Foundation” via donation upon the resolution of the Board of Directors, for promoting the related business.

(III) Incentive remuneration to key management level

The total salaries and remunerations to directors and other key management in 2021 and 2020 are enumerated below:

2021 and 2020 are enumerated below:
Short-term employee benefits Post-employment benefits		2021 $ 84,937 2,331 $ 87,268		2020
				$ 85,398 2,302 $ 87,700

The salaries and remunerations to directors and other key management were determined by the Salary Committee in accordance with the personal performances and trends in the markets.

XXVI. Others

• (I) Gross retained earned premium

• As of December 31, 2021, the balance of the gross retained earned premium for the compulsory and non-compulsory insurance, and the calculation are as follows:

Insurance type	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 787,013 $ 259,146 $ 367,120 $ 679,039 7,912,888 199,950 1,756,734 6,356,104 $ 8,699,901 $ 459,096 $ 2,123,854 $ 7,035,143 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net change in unearned premium reserves (9)=(5) －(6)+(7)－(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 352,629 $ 348,534 $ 149,456 $ 146,159 $ 7,392 2,940,322 2,708,324 118,748 99,051 251,695 $ 3,292,951 $ 3,056,858 $ 268,204 $ 245,210 $ 259,087 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 211,582 $ 209,123 $ 2,459 $ 674,106 535,160 516,882 18,278 6,122,687 $ 746,742 $ 726,005 $ 20,737 $ 6,796,793	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 787,013 $ 259,146 $ 367,120 $ 679,039 7,912,888 199,950 1,756,734 6,356,104 $ 8,699,901 $ 459,096 $ 2,123,854 $ 7,035,143 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net change in unearned premium reserves (9)=(5) －(6)+(7)－(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 352,629 $ 348,534 $ 149,456 $ 146,159 $ 7,392 2,940,322 2,708,324 118,748 99,051 251,695 $ 3,292,951 $ 3,056,858 $ 268,204 $ 245,210 $ 259,087 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 211,582 $ 209,123 $ 2,459 $ 674,106 535,160 516,882 18,278 6,122,687 $ 746,742 $ 726,005 $ 20,737 $ 6,796,793	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 787,013 $ 259,146 $ 367,120 $ 679,039 7,912,888 199,950 1,756,734 6,356,104 $ 8,699,901 $ 459,096 $ 2,123,854 $ 7,035,143 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net change in unearned premium reserves (9)=(5) －(6)+(7)－(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 352,629 $ 348,534 $ 149,456 $ 146,159 $ 7,392 2,940,322 2,708,324 118,748 99,051 251,695 $ 3,292,951 $ 3,056,858 $ 268,204 $ 245,210 $ 259,087 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 211,582 $ 209,123 $ 2,459 $ 674,106 535,160 516,882 18,278 6,122,687 $ 746,742 $ 726,005 $ 20,737 $ 6,796,793	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 787,013 $ 259,146 $ 367,120 $ 679,039 7,912,888 199,950 1,756,734 6,356,104 $ 8,699,901 $ 459,096 $ 2,123,854 $ 7,035,143 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net change in unearned premium reserves (9)=(5) －(6)+(7)－(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 352,629 $ 348,534 $ 149,456 $ 146,159 $ 7,392 2,940,322 2,708,324 118,748 99,051 251,695 $ 3,292,951 $ 3,056,858 $ 268,204 $ 245,210 $ 259,087 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 211,582 $ 209,123 $ 2,459 $ 674,106 535,160 516,882 18,278 6,122,687 $ 746,742 $ 726,005 $ 20,737 $ 6,796,793	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 787,013 $ 259,146 $ 367,120 $ 679,039 7,912,888 199,950 1,756,734 6,356,104 $ 8,699,901 $ 459,096 $ 2,123,854 $ 7,035,143 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net change in unearned premium reserves (9)=(5) －(6)+(7)－(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 352,629 $ 348,534 $ 149,456 $ 146,159 $ 7,392 2,940,322 2,708,324 118,748 99,051 251,695 $ 3,292,951 $ 3,056,858 $ 268,204 $ 245,210 $ 259,087 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 211,582 $ 209,123 $ 2,459 $ 674,106 535,160 516,882 18,278 6,122,687 $ 746,742 $ 726,005 $ 20,737 $ 6,796,793	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 787,013 $ 259,146 $ 367,120 $ 679,039 7,912,888 199,950 1,756,734 6,356,104 $ 8,699,901 $ 459,096 $ 2,123,854 $ 7,035,143 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net change in unearned premium reserves (9)=(5) －(6)+(7)－(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 352,629 $ 348,534 $ 149,456 $ 146,159 $ 7,392 2,940,322 2,708,324 118,748 99,051 251,695 $ 3,292,951 $ 3,056,858 $ 268,204 $ 245,210 $ 259,087 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 211,582 $ 209,123 $ 2,459 $ 674,106 535,160 516,882 18,278 6,122,687 $ 746,742 $ 726,005 $ 20,737 $ 6,796,793	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 787,013 $ 259,146 $ 367,120 $ 679,039 7,912,888 199,950 1,756,734 6,356,104 $ 8,699,901 $ 459,096 $ 2,123,854 $ 7,035,143 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net change in unearned premium reserves (9)=(5) －(6)+(7)－(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 352,629 $ 348,534 $ 149,456 $ 146,159 $ 7,392 2,940,322 2,708,324 118,748 99,051 251,695 $ 3,292,951 $ 3,056,858 $ 268,204 $ 245,210 $ 259,087 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 211,582 $ 209,123 $ 2,459 $ 674,106 535,160 516,882 18,278 6,122,687 $ 746,742 $ 726,005 $ 20,737 $ 6,796,793	Premium retained (4)＝(1)＋(2)－(3)	Premium retained (4)＝(1)＋(2)－(3)	Premium retained (4)＝(1)＋(2)－(3)
Compulsory insurance Non-Compulsory insurance Item Compulsory insurance Non-Compulsory insurance Item									$	679,039 6,356,104 7,035,143 Net change in unearned premium reserves (9)=(5) －(6)+(7)－(8)
									$
							Recovery (8)
		$
		$
				Reserve (10)
Compulsory insurance Non-Compulsory insurance				$ 211,582 535,160 $ 746,742					$ 674,106 6,122,687 $ 6,796,793

• 93 -

Note: As of December 31, 2021, the provision for stable funds of the Company is NT$17,524 thousand.

1. As of December 31, 2020, the balance of the gross retained earned premium for the

compulsory and non-compulsory insurance, and the calculation are as follows:

Insurance type	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 779,168 $ 251,424 $ 362,236 $ 668,356 5,733,038 178,889 1,701,528 4,210,399 $ 6,512,206 $ 430,313 $ 2,063,764 $ 4,878,755 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net Change in Unearned Premium Reserves (9)=(5)－(6)+(7) －(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 348,534 $ 338,780 $ 146,159 $ 144,516 $ 11,397 2,754,601 2,545,096 101,995 90,981 220,519 $ 3,103,135 $ 2,883,876 $ 248,154 $ 235,497 $ 231,916 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 209,123 $ 203,272 $ 5,851 $ 662,810 550,934 506,111 44,823 4,034,703 $ 760,057 $ 709,383 $ 50,674 $ 4,697,513	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 779,168 $ 251,424 $ 362,236 $ 668,356 5,733,038 178,889 1,701,528 4,210,399 $ 6,512,206 $ 430,313 $ 2,063,764 $ 4,878,755 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net Change in Unearned Premium Reserves (9)=(5)－(6)+(7) －(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 348,534 $ 338,780 $ 146,159 $ 144,516 $ 11,397 2,754,601 2,545,096 101,995 90,981 220,519 $ 3,103,135 $ 2,883,876 $ 248,154 $ 235,497 $ 231,916 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 209,123 $ 203,272 $ 5,851 $ 662,810 550,934 506,111 44,823 4,034,703 $ 760,057 $ 709,383 $ 50,674 $ 4,697,513	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 779,168 $ 251,424 $ 362,236 $ 668,356 5,733,038 178,889 1,701,528 4,210,399 $ 6,512,206 $ 430,313 $ 2,063,764 $ 4,878,755 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net Change in Unearned Premium Reserves (9)=(5)－(6)+(7) －(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 348,534 $ 338,780 $ 146,159 $ 144,516 $ 11,397 2,754,601 2,545,096 101,995 90,981 220,519 $ 3,103,135 $ 2,883,876 $ 248,154 $ 235,497 $ 231,916 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 209,123 $ 203,272 $ 5,851 $ 662,810 550,934 506,111 44,823 4,034,703 $ 760,057 $ 709,383 $ 50,674 $ 4,697,513	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 779,168 $ 251,424 $ 362,236 $ 668,356 5,733,038 178,889 1,701,528 4,210,399 $ 6,512,206 $ 430,313 $ 2,063,764 $ 4,878,755 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net Change in Unearned Premium Reserves (9)=(5)－(6)+(7) －(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 348,534 $ 338,780 $ 146,159 $ 144,516 $ 11,397 2,754,601 2,545,096 101,995 90,981 220,519 $ 3,103,135 $ 2,883,876 $ 248,154 $ 235,497 $ 231,916 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 209,123 $ 203,272 $ 5,851 $ 662,810 550,934 506,111 44,823 4,034,703 $ 760,057 $ 709,383 $ 50,674 $ 4,697,513	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 779,168 $ 251,424 $ 362,236 $ 668,356 5,733,038 178,889 1,701,528 4,210,399 $ 6,512,206 $ 430,313 $ 2,063,764 $ 4,878,755 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net Change in Unearned Premium Reserves (9)=(5)－(6)+(7) －(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 348,534 $ 338,780 $ 146,159 $ 144,516 $ 11,397 2,754,601 2,545,096 101,995 90,981 220,519 $ 3,103,135 $ 2,883,876 $ 248,154 $ 235,497 $ 231,916 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 209,123 $ 203,272 $ 5,851 $ 662,810 550,934 506,111 44,823 4,034,703 $ 760,057 $ 709,383 $ 50,674 $ 4,697,513	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 779,168 $ 251,424 $ 362,236 $ 668,356 5,733,038 178,889 1,701,528 4,210,399 $ 6,512,206 $ 430,313 $ 2,063,764 $ 4,878,755 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net Change in Unearned Premium Reserves (9)=(5)－(6)+(7) －(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 348,534 $ 338,780 $ 146,159 $ 144,516 $ 11,397 2,754,601 2,545,096 101,995 90,981 220,519 $ 3,103,135 $ 2,883,876 $ 248,154 $ 235,497 $ 231,916 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 209,123 $ 203,272 $ 5,851 $ 662,810 550,934 506,111 44,823 4,034,703 $ 760,057 $ 709,383 $ 50,674 $ 4,697,513	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 779,168 $ 251,424 $ 362,236 $ 668,356 5,733,038 178,889 1,701,528 4,210,399 $ 6,512,206 $ 430,313 $ 2,063,764 $ 4,878,755 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net Change in Unearned Premium Reserves (9)=(5)－(6)+(7) －(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 348,534 $ 338,780 $ 146,159 $ 144,516 $ 11,397 2,754,601 2,545,096 101,995 90,981 220,519 $ 3,103,135 $ 2,883,876 $ 248,154 $ 235,497 $ 231,916 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 209,123 $ 203,272 $ 5,851 $ 662,810 550,934 506,111 44,823 4,034,703 $ 760,057 $ 709,383 $ 50,674 $ 4,697,513	Premium retained (4)＝(1)＋(2)－(3)	Premium retained (4)＝(1)＋(2)－(3)
Compulsory insurance Non-Compulsory insurance Item Compulsory insurance Non-Compulsory insurance Item
							Recovery (8)
		$
		$
				Reserve (10) $ 209,123 550,934 $ 760,057
Compulsory insurance Non-Compulsory insurance									$ 662,810 4,034,703 $ 4,697,513

Note: As of December 31, 2020, the provision for stable funds of the Company is NT$12,557 thousand.

(II) Retained claims

1. As of December 31, 2021, the balance of the gross retained claims for the compulsory and non-compulsory insurance, and the calculation are as follows:

Insurance type Compulsory insurance Non-Compulsory insurance	Claims (including the claim expenses) (1) $ 558,994 4,012,935 $ 4,571,929		Claims for reinsurance (2) $ 260,398 33,267 $ 293,665		Refundable Claims for Reinsurance (3) $ 332,065 335,002 $ 667,067	Retained claims (4)＝ (1)＋(2)－(3)	Retained claims (4)＝ (1)＋(2)－(3)
							$ 487,327 3,711,200 $ 4,198,527

• 94 -

• As of December 31, 2020, the balance of the gross retained claims for the compulsory and non-compulsory insurance, and the calculation are as follows:

Insurance type Compulsory insurance Non-Compulsory insurance	Claims (including the claim expenses) (1) $ 535,417 2,280,089 $ 2,815,506		Claims for reinsurance (2) $ 275,625 36,904 $ 312,529		Refundable Claims for Reinsurance (3) $ 314,515 458,601 $ 773,116	Retained claims (4)＝ (1)＋(2)－(3)	Retained claims (4)＝ (1)＋(2)－(3)
							$ 496,527 1,858,392 $ 2,354,919

(III) Unearned premium reserves

1. The balances of the retained unearned premium reserves for each insurance type as of December 31, 2021 are summarized as the followings:

Item General Personal Automobile Liability Insurance General Personal Automobile Physical Damage Insurance Personal Accident Insurance One-year Residential Fire Insurance Other Insurance (Note) Less: Accumulated impairment	Unearned premium reserves	Unearned premium reserves	Unearned premium reserves		Ceding unearned premium reserves Ceding reinsurance business $ 778 5,328 20,876 - 795,939 - $ 822,921		Retained business
	Direct business $ 872,418 569,167 245,722 197,800 1,541,300 - $ 3,426,407		Reinsurance inward business
			$ 134 - 1,641 - 278,706 - $ 280,481				$ 871,774 563,839 226,487 197,800 1,024,067 - $ 2,883,967

Note: the balance of each insurance type less than 5% of the total are stated collectively.

• 95 -

• The balances of the retained unearned premium reserves for each insurance type as of December 31, 2020 are summarized as the followings:

Item General Personal Automobile Liability Insurance General Personal Automobile Physical Damage Insurance Personal Accident Insurance One-year Residential Fire Insurance Compulsory Automobile Liability Insurance Other Insurance (Note) Less: Accumulated impairment	Unearned premium reserves	Unearned premium reserves	Unearned premium reserves		Ceding unearned premium reserves Ceding reinsurance business $ 425 6,528 18,727 - 101,626 674,878 - $ 802,184		Retained business
	Direct business $ 818,067 532,521 240,110 191,446 169,376 1,238,794 - $ 3,190,314		Reinsurance inward business
			$ 68 - 1,770 - 67,232 188,417 - $ 257,487				$ 817,710 525,993 223,153 191,446 134,982 752,333 - $ 2,645,617

• Note: the balance of each insurance type less than 5% of the total are stated collectively.

(IV) Claim reserves

1. As of December 31, 2021, the balance of the reported but not paid and unreported claim reserves, and the calculation are as follows:

2. (1) Claim reserves and ceding claims reserves

Item Reported but not yet paid Not yet reported Less: Accumulated impairment		Claim r	eserves Reinsurance inward business (2) $ 286,137 162,362 - $ 448,499	Ceding claims reserves Ceding reinsurance business (3) $ 704,895 354,500 ( 243 ) $ 1,059,152	Retained business (4)=(1)+(2)-(3)	Retained business (4)=(1)+(2)-(3)
		Direct Insurance (1)
		$ 1,818,548 912,526 - $ 2,731,074		(		$ 1,399,790 720,388 243 $ 2,120,421

(2) Ceding net change in claims reserves and net change in ceding claims reserves

Item Reported but not yet paid Not yet reported		Direct Insurance Reserve (1) Recovery (2) $ 1,818,548 $ 1,539,543 912,526 869,734 $ 2,731,074 $ 2,409,277	Direct Insurance Reserve (1) Recovery (2) $ 1,818,548 $ 1,539,543 912,526 869,734 $ 2,731,074 $ 2,409,277		Reinsurance inward business	Reinsurance inward business	Reinsurance inward business	Claim reserves Net change (5)=(1)- (2)+(3)-(4) $ 245,767 39,461 $ 285,228	Claim reserves Net change (5)=(1)- (2)+(3)-(4) $ 245,767 39,461 $ 285,228
		Reserve (1) $ 1,818,548 912,526 $ 2,731,074			Reserve (3) $ 286,137 162,362 $ 448,499		Recovery (4)
							$ 319,375 165,693 $ 485,068		$ 245,767 39,461 $ 285,228

• 96 -

Item Reported but not yet paid Not yet reported		Ceding reinsurance business Reserve (6) Recovery (7) $ 704,895 $ 557,847 354,500 367,557 $ 1,059,395 $ 925,404	Ceding reinsurance business Reserve (6) Recovery (7) $ 704,895 $ 557,847 354,500 367,557 $ 1,059,395 $ 925,404	Ceding net change in claims reserves (8)=(6)-(7)	Ceding net change in claims reserves (8)=(6)-(7)
		Reserve (6) $ 704,895 354,500 $ 1,059,395
				(	$ 147,048 13,057 ) $ 133,991

1. As of December 31, 2020, the balance of the reported but not paid and unreported claim reserves, and the calculation are as follows:

2. (1) Claim reserves and ceding claims reserves

Item Reported but not yet paid Not yet reported Less: Accumulated impairment		Claim r	eserves Reinsurance inward business (2) $ 319,375 165,693 - $ 485,068	Ceding claims reserves Ceding reinsurance business (3) $ 557,847 367,557 ( 314 ) $ 925,090	Retained business(4)=(1)+(2)- (3)	Retained business(4)=(1)+(2)- (3)
		Direct Insurance (1)
		$ 1,539,543 869,734 - $ 2,409,277		(		$ 1,301,071 667,870 314 $ 1,969,255

• (2) Ceding net change in claims reserves and net change in ceding claims reserves

		Direct	Insurance		Reinsurance inward business	Reinsurance inward business	Reinsurance inward business	Reinsurance inward business	Claim reserves
									Net change
									(5)=(1)-
	Item	Reserve (1)	Recovery (2)		Reserve (3)		Recovery (4)		(2)+(3)-(4)
Reported but not yet		$ 1,539,543	$ 1,561,264		$	319,375	$	287,474	$ 10,180
paid
Not yet reported		869,734	873,230			165,693		166,144	( 3,947)
		$ 2,409,277	$ 2,434,494		$	485,068	$	453,618	$ 6,233
								Ceding net change in
				Ceding reinsurance business					claims reserves
	Item		Reserve (6)			Recovery	(7)		(8)=(6)-(7)
Reported but not yet paid			$	557,847		$ 667,090		(	$ 109,243 )
Not yet reported				367,557		369,723		(	2,166 )
			$	925,404		$ 1,036,813		(	$ 111,409 )

(V) Premium deficiency reserves

1. As of December 31, 2021, the balance of the premium deficiency reserves of each insurance type, and the calculation are as follows:

2. (1) Premium deficiency reserves and ceding premium deficiency reserves

Item Miscellaneous Insurance Aviation Insurance Fishing Vessel Insurance		Premium deficiency reserves	Premium deficiency reserves	Premium deficiency reserves	Ceding premium deficiency reserves Ceding reinsurance business $ - - - $ -	Retained business	Retained business
		Direct business $ 7,843 3,249 2,627 $ 13,719	Reinsurance inward business
				$ 1 83 93 $ 177			$ 7,844 3,332 2,720 $ 13,896

• 97 -

• (2) Net change in premium deficiency reserves and ceding net change in premium deficiency reserves

Item Miscellaneous Insurance Aviation Insurance Fishing Vessel Insurance Item Miscellaneous Insurance Aviation Insurance Fishing Vessel Insurance		Direct Insurance Reserve (1) Recovery (2) $ 7,843 $ 1,999 3,249 2,431 2,627 2,762 $ 13,719 $ 7,192 Ceding reinsurance business	Direct Insurance Reserve (1) Recovery (2) $ 7,843 $ 1,999 3,249 2,431 2,627 2,762 $ 13,719 $ 7,192 Ceding reinsurance business
					$
					$
		Reserve (6) $ - - - $ -

The abovementioned premium deficiency reserves does not apply discount when calculating.

1. As of December 31, 2020, the balance of the premium deficiency reserves of each insurance type, and the calculation are as follows:

2. (1) Premium deficiency reserves and ceding premium deficiency reserves

Item Fishing Vessel Insurance Aviation Insurance Miscellaneous Insurance		Premium deficiency reserves Direct business Reinsurance inward business $ 2,762 $ 226 2,431 146 1,999 24 $ 7,192 $ 396	Premium deficiency reserves Direct business Reinsurance inward business $ 2,762 $ 226 2,431 146 1,999 24 $ 7,192 $ 396	Ceding premium deficiency reserves Ceding reinsurance business $ - - - $ -	Retained business	Retained business
		Direct business $ 2,762 2,431 1,999 $ 7,192
						$ 2,988 2,577 2,023 $ 7,588

• (2) Net change in premium deficiency reserves and ceding net change in premium deficiency reserves

Item Fishing Vessel Insurance Aviation Insurance Marine Hull Insurance Marine Cargo Insurance Miscellaneous Insurance		Direct Insurance Reserve (1) Recovery (2) $ 2,762 $ 2,946 2,431 2,881 - 783 - 139 1,999 - $ 7,192 $ 6,749	Direct Insurance Reserve (1) Recovery (2) $ 2,762 $ 2,946 2,431 2,881 - 783 - 139 1,999 - $ 7,192 $ 6,749		Reinsurance inward business Reserve (3) Recovery (4) $ 226 $ 234 146 103 - 66 - 2 24 - $ 396 $ 405	Reinsurance inward business Reserve (3) Recovery (4) $ 226 $ 234 146 103 - 66 - 2 24 - $ 396 $ 405	Net change in premium deficiency reserves for direct business and reinsurance inward (5)=(1)-(2) +(3)-(4)
		Reserve (1) $ 2,762 2,431 - - 1,999 $ 7,192			Reserve (3) $ 226 146 - - 24 $ 396
							( $ 192 ) ( 407 ) ( 849 ) ( 141 ) 2,023 $ 434

• 98 -

Item Fishing Vessel Insurance Aviation Insurance Marine Hull Insurance Marine Cargo Insurance Miscellaneous Insurance		Ceding reinsurance business Reserve (6) Recovery (7) $ - $ - - - - - - - - - $ - $ -	Ceding reinsurance business Reserve (6) Recovery (7) $ - $ - - - - - - - - - $ - $ -	Ceding net change in premium deficiency reserves (8)=(6)-(7) $ - - - - - $ -	Loss recognized under the net provision of premium deficiency reserves for the period (9)=(5)-(8)	Loss recognized under the net provision of premium deficiency reserves for the period (9)=(5)-(8)
		Reserve (6) $ - - - - - $ -
					( ( ( (	$ 192 ) 407 ) 849 ) 141 ) 2,023 $ 434

The abovementioned premium deficiency reserves does not apply discount when calculating.

(VI) Special reserves

1. As of December 31, 2021, the special reserves for the compulsory and noncompulsory insurance increase/decrease as the following:

2. (1) Special reserves - Compulsory automobile liability insurance

Item Balance - beginning Provision of the Period Recovery of the Period Balance - ending		Amount
	(	$ 913,838 53,236 16,333) $ 950,741

• (2) Special reserves - Non-Compulsory automobile liability insurance

Item				Liabi	lit	ies						Special	re	serve
		Material accidents		Hazard changes		Others		Total		Material accidents		Hazard changes		Others		Total
Balance - beginning Provision of the Period Recovery of the Period Balance - ending		$ 178,008 - ( 8,091) $ 169,917		$ 796,548 - - $ 796,548		$ 230,305 - - $ 230,305		$ 1,204,861 - ( 8,091) $ 1,196,770		$ 450,903 103,148 - $ 554,051		$ 990,404 129,380 ( 48,254) $ 1,071,530		$ 466,297 58,697 - $ 524,994		$ 1,907,604 291,225 ( 48,254) $ 2,150,575

Note: The recovery of the special reserves under the previous liability refers

to the special reserves provided for non-compulsory automobile liability insurance before January 1, 2011.

1. As of December 31, 2020, the special reserves for the compulsory and noncompulsory insurance increase/decrease as the following:

2. (1) Special reserves - Compulsory automobile liability insurance

Item Balance - beginning Provision of the Period Recovery of the Period Balance - ending		Amount
	(	$ 928,997 8,803 23,962) $ 913,838

• 99 -

• (2) Special reserves - Non-Compulsory automobile liability insurance

Item				Liabi	lit	ies						Special	re	serve
		Material accidents		Hazard changes		Others		Total		Material accidents		Hazard changes		Others		Total
Balance - beginning Provision of the Period Recovery of the Period Balance - ending		$ 186,099 - ( 8,091) $ 178,008		$ 796,548 - - $ 796,548		$ 230,305 - - $ 230,305		$ 1,212,952 - ( 8,091) $ 1,204,861		$ 396,144 54,759 - $ 450,903	(	$ 926,829 129,691 66,116) $ 990,404		$ 412,534 53,763 - $ 466,297		$ 1,735,507 238,213 ( 66,116) $ 1,907,604

Note: The recovery of the special reserves under the previous liability refers

to the special reserves provided for non-compulsory automobile liability insurance before January 1, 2011.

• (VII) Details of balance sheet and income/cost of compulsory automobile liability insurance

• Detailed balance sheet of compulsory automobile liability insurance

Item	Amount	Amount	Item	Amount	Amount
ASSETS	December 31, 2021	December 31, 2020	Liabilities	December 31, 2021	December 31, 2020
Cash and Bank deposits Cash Equivalents Notes receivable Premiums receivable Less benefits & claims recovered from reinsurers Due from reinsurers and ceding companies Other receivables Financial assets at fair value through other comprehensive income Ceding unearned premium reserves Ceding claims reserves Temporary paid and payment to be carried over Other assets	$ 1,575,807 - 13,026 25,931 32,233 43,826 - - 211,582 290,424 233 -	$ 1,547,851 - 12,219 26,709 22,400 41,501 - - 209,123 291,759 43 -	Notes payable Claims payable Reinsurance benefits and claims payable Due to reinsurers and ceding companies Unearned premium reserves Claim reserves Special reserves Temporary received and payment to be carried over Other liabilities	$ - - - 41,891 502,085 696,251 950,742 - 2,093	$ - - - 42,559 494,693 698,726 913,838 - 1,789
Total assets	$ 2,193,062	$ 2,151,605	Total liabilities	$ 2,193,062	$ 2,151,605

• 100 -

• Detailed income/cost statement of compulsory automobile liability insurance

Item	2021	2020
Operating Revenues Premium income (including reinsurance revenue NT$259,146 and NT$251,424, respectively) Less: Reinsurance premium outward Net change in unearned premium reserves Retained earned premium Interest income Total operating revenues Operating Costs Claims (including claims for reinsurance NT$260,398 thousand and NT$275,625 thousand, respectively) Less: Claim recovered from reinsurer Retained claims Net change in claims reserves Net change in special reserves (Note) Total operating costs	$ 871,003 ( 367,120 ) ( 4,933) 498,950 6,899 $ 505,849 $ 819,392 ( 332,065) 487,327 ( 1,140 ) 36,904 $ 523,091	$ 855,147 ( 362,236 ) ( 5,546) 487,365 7,664 $ 495,029 $ 811,042 ( 314,515) 496,527 13,661 ( 15,159) $ 495,029

Note: According to the Order Jin-Guan-Bao-Chan-Zi No. 11004107771, as of

April 1, 2021, non-life insurance enterprises shall contribute NT$30 from the service expenses of the insured per insurance contract as the reserve on a monthly basis.

(VIII) Acquisition Cost of Insurance Contracts

1. As of December 31, 2021, the amount of the insurance contracts at each insurance category and the calculations are as follows:

Item Miscellaneous Insurance General Personal Automobile Liability Insurance General Personal Automobile Physical Damage Insurance Personal Accident Insurance One-year Residential General Fire Insurance Compulsory Automobile Liability Insurance Other Insurance (Note)		Commission expenditure $ 461,985 202,326 143,255 89,226 59,706 - 252,650 $ 1,209,148		Fee expenditure $ - - - - - 68,085 39,165 $ 107,250		Reinsurance commission expenditure $ 24 33 - - - - 12,006 $ 12,063		Other cost $ - 4,253 843 97 10,091 34 5 $ 15,323		Total
										$ 462,009 206,612 144,098 89,323 69,797 68,119 303,826 $ 1,343,784

Note: the balance of each insurance type less than 5% of the total are stated collectively.

• 101 -

The acquisition costs of the said insurance contracts are not recognized as

deferred.

1. As of December 31, 2020, the amount of the insurance contracts at each insurance category and the calculations are as follows:

Item General Personal Automobile Liability Insurance General Personal Automobile Physical Damage Insurance Personal Accident Insurance Compulsory Automobile Liability Insurance One-year Residential General Fire Insurance One-year Commercial General Fire Insurance Other Insurance (Note)		Commission expenditure $ 192,288 133,969 91,818 - 58,701 49,537 192,854 $ 719,167	Fee expenditure $ - - - 70,473 - - 42,843 $ 113,316		Reinsurance commission expenditure $ 20 - - - - 2,571 10,567 $ 13,158		Other cost $ 4,149 793 100 - 9,758 - 3 $ 14,803		Total
									$ 196,457 134,762 91,918 70,473 68,459 52,108 246,267 $ 860,444

• Note: the balance of each insurance type less than 5% of the total are stated collectively.

The acquisition costs of the said insurance contracts are not recognized as

deferred.

• (IX) Analysis for business profit and loss

• The amount of the profits and losses at each insurance category and the calculations for 2021 are as follows:

  • (1) Direct Insurance

Direct Insurance
Item		Premiums income(1)		Net change in unearned premium reserves(2)	Acquisition cost of insurance contracts(3)		c	Claims (including the laim expenses) (4)	c	Net change in laims reserves (5)	Profit (loss) of Insurance (6)=(1)-(2)-(3)- (4)-(5)
Residential Earthquake Insurance General Personal Automobile Liability Insurance General Personal Automobile Physical Damage Insurance One-year Residential General Fire Insurance One-year Commercial General Fire Insurance Commercial earthquake insurance Personal Accident Insurance General Liability Insurance Other Insurance (Note)		$ 614,473 1,626,133 1,040,421 339,076 486,955 150,403 426,190 260,380 3,755,870 $ 8,699,901	(	$ - 54,352 36,646 6,353 19,140 6,519 ) 5,612 30,274 90,235 $ 236,093		$ 36,139 206,580 144,098 69,797 50,119 10,216 89,324 35,647 689,801 $ 1,331,721		$ - 931,671 572,805 34,387 70,724 410 189,285 70,862 2,701,785 $ 4,571,929	( (	$ - 40,442 3,745 7,208 ) 162,310 4,248 8,505 348 ) 110,103 $ 321,797		$ 578,334 393,088 283,127 235,747 184,662 142,048 133,464 123,945 163,946 $ 2,238,361

• 102 -

(2) Reinsurance assumed

Insurance type	Reinsurance premium income (1)	Reinsurance premium income (1)		Net change in unearned premium reserves(2)	Reinsurance commission expenditure(3)	Reinsurance commission expenditure(3)	Claims for reinsurance(4)	Claims for reinsurance(4)	c	Net change in laims reserves (5)	Profit (loss) of reinsurance inward (6)=(1)-(2)-(3)- (4)-(5)	Profit (loss) of reinsurance inward (6)=(1)-(2)-(3)- (4)-(5)
Residential Earthquake Insurance Foreign Inward Reinsurance – other liability insurance Foreign Inward Reinsurance - Fire Commercial earthquake insurance Foreign Inward Reinsurance - Engineering Typhoon and Flood Insurance Foreign Inward Reinsurance – other property insurance Engineering Insurance Other Insurance (Note)		$ 74,397 - 1,481 19,952 - 11,691 - 27,279 324,296 $ 459,096	(	$ 4,364 - 404 5,198 - 1,837 - 341 ) 11,532 $ 22,994		$ - - - 1,370 - 437 - 7,503 2,753 $ 12,063		$ - - - 4 - 207 - 11,099 282,355 $ 293,665	( ( ( ( (	$ - 27,870 ) 22,511 ) 58 9,240 ) 210 8,605 ) 654 30,735 $ 36,569)	(	$ 70,033 27,870 23,588 13,322 9,240 9,000 8,605 8,364 3,079 ) $ 166,943

(3) Ceding reinsurance business

Insurance type		Reinsurance premium outward (1)		Ceding net change in unearned premium reserves (2)	i	Reinsurance commission ncome and fee income (3)	C	laim recovered from reinsurer (4)	Ceding net change in claims reserves (5)	Ceding net change in claims reserves (5)	Loss (profit) of Ceding reinsurance (6)=(1)-(2)-(3)- (4)-(5)	Loss (profit) of Ceding reinsurance (6)=(1)-(2)-(3)- (4)-(5)
Residential Earthquake Insurance Commercial earthquake insurance General Liability Insurance Engineering Insurance Other Insurance (Note)		$ 614,473 105,149 138,634 124,610 1,140,988 $ 2,123,854	( (	$ - 3,820 ) 15,406 7,074 ) 16,225 $ 20,737		$ 62,088 9,304 37,356 20,526 163,131 $ 292,405		$ - 132 33,330 44,875 588,730 $ 667,067	(	$ - 2,359 3,419 ) 10,758 124,293 $ 133,991		$ 552,385 97,174 55,961 55,525 248,609 $ 1,009,654

Note: the balance of each insurance type less than 5% of the total are stated collectively.

1. The amount of the profits and losses at each insurance category and the calculations for 2020 are as follows:

(1) Direct Insurance

Direct Insurance
Item		Premiums income(1)		Net change in unearned premium reserves(2)	Acquisition cost of insurance contracts(3)		c	Claims (including the laim expenses) (4)	c	Net change in laims reserves (5)	Profit (loss) of Insurance (6)=(1)-(2)-(3)- (4)-(5)
Residential Earthquake Insurance General Personal Automobile Liability Insurance One-year Commercial General Fire Insurance General Personal Automobile Physical Damage Insurance One-year Residential General Fire Insurance Personal Accident Insurance General Liability Insurance Commercial earthquake insurance Other Insurance (Note)		$ 604,803 1,542,098 450,789 976,576 330,994 426,076 223,073 160,249 1,797,548 $ 6,512,206	(	$ - 73,626 3,340 42,084 13,367 1,432 ) 10,927 1,052 76,295 $ 219,259		$ 35,119 196,437 49,537 134,762 68,460 91,917 28,822 11,893 230,339 $ 847,286		$ 1,700 837,671 186,755 562,620 25,856 181,330 55,293 1,813 962,468 $ 2,815,506	( ( ( ( ( (	$ - 89,322 63,168 ) 14,350 5,209 10,337 ) 25,171 ) 776 ) 34,646) $ 25,217 )		$ 567,984 345,042 274,325 222,760 218,102 164,598 153,202 146,267 563,092 $ 2,655,372

• 103 -

(2) Reinsurance assumed

Insurance type	Reinsurance premium income (1)	Reinsurance premium income (1)		Net change in unearned premium reserves(2)	Reinsurance commission expenditure(3)	Reinsurance commission expenditure(3)	Claims for reinsurance(4)	Claims for reinsurance(4)	c	Net change in laims reserves (5)	Profit (loss) of reinsurance inward (6)=(1)-(2)-(3)- (4)-(5)	Profit (loss) of reinsurance inward (6)=(1)-(2)-(3)- (4)-(5)
Residential Earthquake Insurance Compulsory Automobile Liability Insurance Marine Hull Insurance Commercial earthquake insurance Typhoon and Flood Insurance Nuclear Energy Insurance Compulsory Commercial Automobile Liability Insurance General Liability Insurance Other Insurance (Note)		$ 65,138 134,464 2,977 14,798 9,867 6,756 24,013 1,088 171,212 $ 430,313	( ( (	$ 1,602 842 624 2,771 809 401 ) 4 ) 5,393 ) 11,807 $ 12,657		$ - - 13 1,206 724 - - 16 11,199 $ 13,158		$ 276 110,142 7,721 897 530 8 20,266 3,191 169,498 $ 312,529	( ( ( ( ( ( ( (	$ 366 ) 972 ) 18,885 ) 745 ) 1,417 ) 58 ) 394 ) 158 ) 54,445 $ 31,450	(	$ 63,626 24,452 13,504 10,669 9,221 7,207 4,145 3,432 75,737) $ 60,519

(3) Ceding reinsurance business

Insurance type		Reinsurance premium outward(1)		Ceding net change in unearned premium reserves(2)	i	Reinsurance commission ncome and fee income(3)	C	laim recovered from reinsurer (4)	Ceding net change in claims reserves(5)	Ceding net change in claims reserves(5)	Loss (profit) of Ceding reinsurance (6)=(1)-(2)-(3)- (4)-(5)	Loss (profit) of Ceding reinsurance (6)=(1)-(2)-(3)- (4)-(5)
Residential Earthquake Insurance One-year Commercial General Fire Insurance Commercial earthquake insurance Marine Hull Insurance General Liability Insurance Typhoon and Flood Insurance Compulsory Motorcycle Liability Insurance Other Insurance (Note)		$ 604,803 283,737 106,106 41,339 112,087 62,942 123,352 729,398 $ 2,063,764	( ( ( (	$ - 15,939 ) 4,119 ) 1,459 ) 1,936 3,380 ) 1,646 71,989 $ 50,674		$ 60,981 81,061 9,066 3,368 26,138 6,765 - 84,576 $ 271,955		$ - 148,265 3,396 16,607 29,153 2,064 60,203 513,428 $ 773,116	( ( ( ( ( (	$ - 60,975 ) 3,084 ) 44,987 ) 10,996 ) 5,668 ) 5,252 9,049 $ 111,409 )		$ 543,822 131,325 100,847 67,810 65,856 63,161 56,251 50,356 $ 1,079,428

Note: the balance of each insurance type less than 5% of the total are stated collectively.

• (X) Non-insurance assets acquired by executing recovery rights - residuals taken over and right for pursuit of recovery

ght for pursuit of recovery
Credit Insurance Miscellaneous Insurance Bonding Insurance Personal Comprehensive Insurance General Liability Insurance Engineering Insurance	December 31, 2021 $ 23,604 679 1,933 - 65 1 $ 26,282	December 31, 2020
			$ 31,580 610 2,148 48 11 1 $ 34,398

(XI) Requirements for Asset Segmentation for Certain Assets

The Company has an operation for compulsory automobile liability insurance (“the insurance”), and the insurance has an independent accounting based on the “Compulsory Automobile Liability Insurance Act”, to record the operation and financial position of the insurance.

• 104 -

FSC issued Jin-Guan-Bao-Chan-Zi No. 10202530301 to amend “Regulations for the Management of the Various Reserves for Compulsory Automobile Liability Insurance” on December 31, 2013, and enforced the regulations on January 1, 2014.

Based on Article 5 of the “Regulations for the Management of the Various Reserves for Compulsory Automobile Liability Insurance”, the special reserves provided for the insurance shall be deposited in financial institutions via the purchase of treasury bills or in the format of time deposit. However, with the approval of the competent authorities, the following domestic negotiation securities may be purchased:

1. Government bond. Exchangeable government bonds are excluded.

2. Financial bonds, NCD, bank's acceptance bill, and commercial papers guaranteed by financial institutions. But the financial bonds are limited to the general financial bonds.

The treasury bills purchased and the amount of time deposits in financial institution specified previously, shall not be lower than 30% of the total amount of retained earned pure premiums audited or reviewed by CPA of the latest period. The competent authorities may properly raise the percentage depending on the operation status of the Company.

Shall the balance of the special reserves not meet 30% of the total amount of retained earned pure premiums audited or reviewed by CPA of the latest period, all the reserves shall purchase treasury bills or have been deposited in financial institutions as time deposits.

According to Article 6 of the “Regulations for the Management of the Various Reserves for Compulsory Automobile Liability Insurance”, the funds held by the insurance (various reserves, payables, temporary receipts and payment to be carried over), shall be deposited in the banks as demand deposits and time deposits, except the special reserve, which should be handled in accordance with said requirements. However, with the approval of the competent authorities, the following domestic negotiation securities may be purchased:

1. Treasury Bills.

2. NCD, bank's acceptance Bill, and commercial papers guaranteed by financial institutions.

3. Repo Government Bonds.

The amount of time deposits in financial institution specified previously, shall not be lower than 45% of the balance of funds held by the insurance minus special reserves,

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and 30% of the amount of retained earned pure premiums audited or reviewed by CPA of the latest period. The competent authorities may properly raise the percentage depending on the operation status of the Company.

Shall the sum of the unearned premium reserves and claim reserves not meet 30% of the total amount of retained earned pure premiums audited or reviewed by CPA of the latest period, all the reserves shall be deposited in financial institutions as time deposits.

Based on Article 11 of the “Regulations for the Management of the Various Reserves for Compulsory Automobile Liability Insurance”, when a non-life insurance enterprise suspends or cease to provide the said insurance, all the reserves of the insurance shall be transferred and included to the reserve provisions of the non-life insurance enterprise succeeding the business.

Where an insurance enterprise is ordered to suspend business and undergo rehabilitation, ordered to dissolve, or its permit to provide the insurance is abrogated but no other insurer takes over the insurance business, and the liabilities of the insurance are terminated with positive balance of special reserves, the corresponding assets of such special reserves shall be transferred to Motor Vehicle Compensation Fund Accident.

XXVII. Claim Liabilities to Policyholders

• (I) As of December 31, 2021, the information of the claim liabilities to the policyholders by the Company is summarized as the following:

• The claim liabilities reported and paid, reported but not paid, and unreported to the policyholders

policyholders
Item General Personal Automobile Liability Insurance One-year Commercial Fire Insurance Compulsory Automobile Liability Insurance Compulsory Motorcycle Liability Insurance General Personal Automobile Physical Damage Insurance Marine Cargo Insurance Other Insurance (Note)	Claims payable Reported and paid $ - - - - - - - $ -		Claim reserves
		Reported but not yet paid $ 568,485 358,983 108,118 45,394 155,257 140,903 727,545 $ 2,104,685	Not yet reported $ 132,107 22,466 257,138 213,157 47,960 52,664 349,396 $ 1,074,888		Total
					$ 700,592 381,449 365,256 258,551 203,217 193,567 1,076,941 $ 3,179,573

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• Reinsurance reserve assets - Claim recoverable from reinsurers to the reported and

paid claims to the policyholders

Insurance type Compulsory Automobile Liability Insurance Compulsory Motorcycle Liability Insurance General Personal Automobile Physical Damage Insurance General Liability Insurance Engineering Insurance Compulsory Commercial Automobile Liability Insurance Marine Cargo Insurance Other Insurance (Note) Allowance loss		Claim paid $ 16,647 12,022 11,048 7,094 3,738 3,564 2,823 32,306) 24,630 123) $ 24,507	Reported and paid $ - - - - - - - - - - $ -		Total
	( (			( (	$ 16,647 12,022 11,048 7,094 3,738 3,564 2,823 32,306) 24,630 123) $ 24,507

1. Reinsurance reserve assets - Claim recoverable from reinsurers to the reported but

not paid and unreported ceding claims to the policyholders

Insurance type One-year Commercial Fire Insurance Marine Cargo Insurance Compulsory Automobile Liability Insurance Compulsory Motorcycle Liability Insurance Marine Hull Insurance Engineering Insurance Other Insurance (Note) Accumulated impairment		Reported but not yet paid $ 203,525 126,536 41,434 12,545 56,681 72,061 192,113 $ 704,895		Not yet reported $ 10,600 41,700 104,430 101,697 17,600 2,200 76,273 $ 354,500		Total
					(	$ 214,125 168,236 145,864 114,242 74,281 74,261 268,386 1,059,395 243) $ 1,059,152

Note: the balance of each insurance type less than 5% of the total are stated collectively.

(II) As of December 31, 2020, the information of the claim liabilities to the policyholders by the Company is summarized as the following:

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• The claim liabilities reported and paid, reported but not paid, and unreported to the policyholders

policyholders
Item General Personal Automobile Liability Insurance Compulsory Automobile Liability Insurance General Personal Automobile Physical Damage Insurance Compulsory Motorcycle Liability Insurance Marine Cargo Insurance One-year Commercial Fire Insurance Other Insurance (Note)	Claims payable Reported and paid $ - - - - - - - $ -		Claim reserves
		Reported but not yet paid $ 530,387 76,774 157,333 58,008 129,741 153,074 753,601 $ 1,858,918	Not yetreported $ 129,758 343,605 42,139 135,908 50,195 14,173 319,649 $ 1,035,427		Total
					$ 660,145 420,379 199,472 193,916 179,936 167,247 1,073,250 $ 2,894,345

1. Reinsurance reserve assets - Claim recoverable from reinsurers to the reported and

paid claims to the policyholders

Insurance type Marine Cargo Insurance Compulsory Automobile Liability Insurance Engineering Insurance General Liability Insurance Compulsory Commercial Automobile Liability Insurance Compulsory Motorcycle Liability Insurance Personal Accident Insurance One-year Commercial General Fire Insurance Other Insurance (Note) Allowance loss		Claim paid $ 21,591 15,273 4,828 4,717 3,878 3,249 2,556 1,611 36,516) 21,187 106) $ 21,081	Reported and paid $ - - - - - - - - - - - $ -		Total
	( (			( (	$ 21,591 15,273 4,828 4,717 3,878 3,249 2,556 1,611 36,516) 21,187 106) $ 21,081

1. Reinsurance reserve assets - Claim recoverable from reinsurers to the reported but

not paid and unreported ceding claims to the policyholders

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Insurance type Compulsory Automobile Liability Insurance Marine Cargo Insurance One-year Commercial Fire Insurance Marine Hull Insurance Compulsory Motorcycle Liability Insurance Engineering Insurance General Liability Insurance Other Insurance (Note) Accumulated impairment		Reported but not yet paid $ 31,792 109,141 95,535 67,023 10,529 60,203 34,985 148,639 $ 557,847		Not yet reported $ 155,654 39,600 5,700 22,500 55,007 3,300 16,600 69,196 $ 367,557		Total
						$ 187,446 148,741 101,235 89,523 65,536 63,503 51,585 217,835 925,404 ( 314) $ 925,090

Note: the balance of each insurance type less than 5% of the total are stated collectively.

XXVIII. Effects from Changes of Estimates and Assumptions

• (I) The estimate amount of claims for the following significant claim events, is the neutral estimation for the current forecast of future amount of claim, based on the inspection of the insurance accidents. However, the estimation and assumption are uncertain, and may not be consistent to the actual claim outcomes in the future. The said estimation may be revised due to re-evaluation of the case by the insurance notary or the claim personnel after inspection and collection of information; or may be modified because the delegated attorneys change the future claim amount specified in the arising litigation and related legal fees. The Company will re-evaluated and account based on the said changes, and cause the estimated claim amount of the claim event. The changed amount will directly affect the profit/loss of the current when changes occur. The estimation of the amount of each insurance type and the amount after changes are listed as follows:

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• 2021

2021
Insurance type One-year Commercial Fire Insurance Cargo Insurance Aviation Insurance	Estimated amount $ 218,555 52,947 30,190 $ 301,692	Amount after changes
		$ 218,869 52,947 30,190

The abovementioned effects do not take into account of ceding reinsurance.

1. 2020

2020
Insurance type One-year Commercial Fire Insurance Cargo Insurance Aviation Insurance	Estimated amount $ 125,968 44,670 30,190 $ 200,828	Amount after changes
		$ 67,065 44,670 30,190

The abovementioned effects do not take into account of ceding reinsurance.

(II) The Company evaluates the premium deficiency reserve based on the expected cost method, while considering the individual cases not satisfying Article 10 of the “Regulations Governing Insurance Enterprises Engaging in Operating Reinsurance and Other Risk Spreading Mechanisms”. However, the estimation and assumption are uncertain, and may not be consistent to the actual loss rate and actual general fee rate in the future. The said estimation may, due to the changes of future economic situations, cause the provision of premium deficiency reserve to increase or decrease. When the expected loss rate increases of decrease 5%, the amount of the provision of premium

deficiency reserve for 2021 and 2020 may increase NT$4,492 thousand or NT$593 thousand, or decrease NT$4,492 thousand or NT$593 thousand, respectively. The changed amount will directly affect the profit/loss of the current when changes occur. The abovementioned effects do not take into account of ceding reinsurance.

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XXIX. Information of risk management

• (I) Structure, Organization, and Authorities and Responsibilities of Risk Management

• Structure and Organization of Risk Management

==> picture [420 x 282] intentionally omitted <==

In order to effectively plan, supervise and execute the risk management, in the 29th meeting of the 22nd Board of Directors on September 24, 2010, the Risk Management Committee was set up under the Board.

Risk management strategies of the Company:

• (1) The standards of risk management established by Company include: insurance risk, credit risk, market risk, liquidity risk, operation risk and risk of match for asset and liability.

• (2) Based on the operational plan and target of financial incomes, the risk appetite of the Company is set up as no less than 400% of the capital adequacy ratio.

• (3) Establish the risk management procedures consistent of the business scale, nature, and complexity of the Company, so each risk is controlled to the acceptable extent.

• (4) Effectively control the capital adequacy ratio by complying with the regulations of managing capital adequacy ratio by the competent authorities.

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• (5) Establish the information security guarding mechanism and contingency plan for the business or transactions, and inter-application of information.

• Risk management procedure of the Company:

To identify, measure, supervise and monitor each risk faced by the Company, the risk management procedure is divided as five stages, namely risk identification, risk measurement, risk response, risk control, and risk report, as for the operation of risk management.

1. The functions of each unit are as follows:

2. (1) Board of Directors

   • A. Shall recognize the risks to be assumed for the operations of insurance enterprise, ensure to effectiveness of the risk management, and be ultimately responsible for the risk management as a whole.

   • B. Must establish the proper risk management mechanism and culture, approve the proper risk management policies and review them regularly, and optimize the allocations of resources.

   • C. Not only pay attentions to the risks assumed by individual unit, but rather consider the effects from the aggregation of each risk at the company level. Meanwhile, the mandatory capitals required by the competent authorities, and various regulations of finance and business impacting the capital allocation shall be taken into account.

3. (2) Risk Management Committee

   • A. Draft the policies, structures, organizational functions of risk management, establish the qualified and quantified management standards, report to the Board regularly and reflect the implementation of risk management to the Board in timely manner, and propose the necessary improvement advices.

   • B. Execute the Board’s decisions of risk management, and regularly review the performance for development, establishment, and execution of the risk management mechanism at the Company level.

   • C. Assist and supervise the risk management activities conducted by each department.

   • D. Adjusted the risk categories, limit allocation, and assumption approach depending on the changes of circumstance.

4. 112 -

5. E. Coordinate the interactions and communications of cross-department risk management.

6. (3) Risk Management Dept.

7. A. In charge of the executions of daily risk monitor, measurement, and evaluation, and independent from the business to perform the duties.

8. B. The risk management department shall perform the following duties based on the categories of operations:

   • a. assisting to draft and execute the risk management policies approved by the Board of Directors.

   • b. assisting to draft the risk limits based on the risk appetite.

   • c. compiling the risk information provided by each unit, to coordinate and communicate among them for the purpose of executing policies and limits.

   • d. providing the risk management related report regularly.

   • e. monitoring the risk limits and utilization of each business unit.

   • f. assisting to the stress test.

   • g. conducting backtracking test when necessary.

   • h. other matters related to risk management.

9. C. Handling the breach of risk limits by other units under the authorization of the Risk Management Committee.

10. (4) Business units (all departments other than Audit Dept. and Risk Management Dept.)

11. A. The heads of business units’ duties to execute the risk management are as follows:

    • a. in charge of the management and report of the daily risks for the unit he/she belongs to, and taking the necessary responding strategies.

    • b. supervising the regular conveyance of related risk information to the Risk Management Dept.

12. B.The business units’ duties to execute the risk management are as follows:

    • a. Identifying risks and reporting the exposures.

    • b. Measuring the extent (quantifying or qualifying) of impact when such risks materialize, and convey the risk information in a timely and correct manner.

13. 113 -

14. c. Reviewing each risks and limit regularly, to ensure the risk limit of the unit is effectively executed.

15. d. Monitoring the risk exposure and report the breaches, including the measures taken for such breaches.

16. e. Assisting the development of the risk models, to ensure the measurement of risk, use of model, and establishment of assumptions within the business unit is on the reasonable and consistent basis.

17. f. Ensuring the effective execution of the internal control within the business unit, to comply with the laws and regulations as well as the risk management policies of the Company.

18. g. Assisting the collection of the operational risks.

19. (5) Audit Dept.

Based on the current laws and regulations to audit the execution of risk management for business units of the Company.

• (II) The extent and nature of the risk reporting and measuring system for the non-life insurance enterprises

The Risk Management Dept. compiles the risk information provided by each unit, to prepare the risk management report regularly, as well as reviews and tracks the utilization of major risk limits, to monitor the risk regularly. The risk management report is submitted to the Risk Management Committee every quarter, and the holistic risk management report is submitted to the Board of Director every six months.

The insurance risk management information system of the Company has the database for the accumulations under the same insurance for each category of insurance, and the limit control for each policy. The database not only is able to control the significant disaster risk timely, but also helpful for the business units to conduct scenario analysis and the stress tests. The limit control for each policy includes the real-time ceding reinsurance, to control the risks of significant disaster and reinsurances effectively.

• (III) The procedures for non-life insurance enterprises to sustain, measure, supervise, and control the insurance risks, and to ensure the insurance-approval policies for proper risk categorization and premium levels

When the sales of each insurance of the Company solicit business, the “Regulations Governing Business Solicitation” of the Company shall be followed. The

• 114 -

insurance approver of each insurance shall be strictly required for their qualification, authorities and duties based on the “Regulations Governing Insurance Approval and Claims”, and they shall follow the established operational process of insurance approval for the insurance type when approving insurance, to ensure the proper risk categorization and premium levels, as well as to control the insurance risks.

(IV) Evaluating and managing the insurance risk extent on the basis of company as a whole

For the management of insurance risks, the Company has the risks of product design and pricing, insurance approval, reinsurance, significant disaster, claim, reserves, as well as the matching risks for assets and liabilities.

(V)

The approaches used by the non-life insurance enterprises to limit the insurance risk exposures and prevent the risk of undue concentration:

The Company has, based on the “Regulations Governing Insurance Enterprises Engaging in Operating Reinsurance and Other Risk Spreading Mechanisms”, to established a risk management mechanism for the retained and ceding reinsurance and reinsurance inwards business; and the “Reinsurance Risk Management Operating Guidelines” has been established for execution by considering the ability to assume risks. The retained limits of insurance for each hazard unit of each insurance type are disclosed as the following:

• 115 -

December 31, 2021

December 31, 2021
Insurance type One-year Commercial Fire Insurance One-year Residential Fire Insurance and Allied Perils Insurance Marine Cargo Insurance Inland Marine Insurance Marine Hull Insurance (casualty insurance of crews and passengers) Marine Hull Insurance (other than the casualty insurance of crews and passengers) Fishing Vessel Insurance Aviation Insurance Engineering Insurance Credit Insurance Bonding Insurance General Liability Insurance Professional Liability Insurance Commercial Comprehensive Insurance Miscellaneous Insurance Personal Comprehensive Insurance Personal Accident Insurance Health Insurance Automobile Physical Damage Insurance and Allied Perils Insurance Automobile Liability Insurance	Unit: NT$ Thousand Highest retention
	NT$ 1,500,000 NT$ 480,000 US$ 5,000 US$ 1,000 US$ 25,000 US$ 5,000 US$ 1,500 US$ 3,000 NT$ 1,500,000 NT$ 300,000 NT$ 300,000 NT$ 300,000 NT$ 300,000 NT$ 1,200,000 NT$ 1,200,000 NT$ 40,000 NT$ 40,000 NT$ 10,000 NT$ 30,000 NT$ 200,000

Note: the special businesses are not subjected to the above restrictions for the maximum self-retained amount.

• 116 -

December 31, 2020

Unit: NT$ Thousand

	Unit: NT$ Thousand
Insurance type One-year Commercial Fire Insurance One-year Residential Fire Insurance and Allied Perils Insurance Marine Cargo Insurance Inland Marine Insurance Marine Hull Insurance (casualty insurance of crews and passengers) Marine Hull Insurance (other than the casualty insurance of crews and passengers) Fishing Vessel Insurance Aviation Insurance Engineering Insurance Credit Insurance Bonding Insurance General Liability Insurance Professional Liability Insurance Commercial Comprehensive Insurance Miscellaneous Insurance Personal Comprehensive Insurance Personal Accident Insurance Health Insurance Automobile Physical Damage Insurance and Allied Perils Insurance Automobile Liability Insurance	Highest retention
	NT$ 1,500,000 NT$ 480,000 US$ 5,000 US$ 1,000 US$ 25,000 US$ 3,000 US$ 1,200 US$ 3,000 NT$ 1,500,000 NT$ 300,000 NT$ 300,000 NT$ 300,000 NT$ 300,000 NT$ 1,200,000 NT$ 1,200,000 NT$ 40,000 NT$ 40,000 NT$ 10,000 NT$ 30,000 NT$ 120,000

Note: the special businesses are not subjected to the above restrictions for the maximum self-retained amount.

• (VI) Approaches of Managing Assets and Liabilities

When implementing various business, the case officers shall manage and monitor

the potential risks in the day-to-day operations based on the internal control procedures and SOP, to prevent the mismatch between the cash flows from liabilities and assets caused by the behaviors of policyholders.

(VII) When certain events occur, the non-life insurance enterprises have to assume extra liabilities or input extra commitments of owner’s equity. The procedures for management, supervision, and control

According to the Insurance Act, for the non-life insurance enterprises, the ratio of total adjusted net capital to risk-based capital may not be lower than 200%. Fail to meet the said ratio, the profits are not to be distributed; also, the capital-increase shall

• 117 -

be conducted within a certain period upon the requests from the competent authorities, or the scope of operations or fund application shall be limited.

Based on the risk appetite regulated by the Risk Management Policy of the Company, the ratio of total adjusted net capital to risk-based capital may not be lower than 400%.

(VIII) Explanation of the Insurance Risk Concentration

The insurances sold by the Company include: fire insurance, marine cargo insurance, marine hull insurance, aviation insurance, personal accident insurance, automobile insurance, cash insurance, credit insurance, engineering insurance, liability insurance, health insurance, and other property insurances; the major sources of business are from within the Republic of China, and the insurance contract taken do not significantly differ from different regions.

The Company's premium revenues mainly concentrate at automobile insurance, fire insurance, marine cargo insurance, casualty insurance, liability insurance, and other property insurance.

Various reserves are provided based on the “Regulations on Provision of Various Reserves for Insurance Enterprises” and other official orders and letters.

(IX) The Sensitivities of Insurance Risks

Year 2021 2020	The impact to the profit/loss when the expected loss ratio increase 5% Before holding thereinsurance After holding thereinsurance ($ 69,240) ($ 61,240) ($ 67,360) ($ 51,660)	The impact to the profit/loss when the expected loss ratio increase 5% Before holding thereinsurance After holding thereinsurance ($ 69,240) ($ 61,240) ($ 67,360) ($ 51,660)	Unit: NT$ Thousand The impact to the profit/loss when the expected loss ratio decrease 5% Before holding thereinsurance After holding thereinsurance $ 61,710 $ 46,410 $ 62,760 $ 47,460	Unit: NT$ Thousand The impact to the profit/loss when the expected loss ratio decrease 5% Before holding thereinsurance After holding thereinsurance $ 61,710 $ 46,410 $ 62,760 $ 47,460
	Before holding thereinsurance ($ 69,240) ($ 67,360)		Before holding thereinsurance $ 61,710 $ 62,760
	( (	( (

Note: the compulsory automobile insurance, nuclear energy insurance and residential earthquake insurance are excluded.

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(X) Development Trend of Claims

1. The development trend of claims for 2021 is as the following:

Unit: NT$ Thousand

Incurred accumulated claims (claim expenses included)

Year/Month of the Accident 2017 2018 2019 2020 2021	12 $ 2,013,877 2,239,137 2,136,349 2,288,237 4,095,067	24 $ 2,087,243 2,298,119 2,204,071 2,461,612	36 $ 2,073,409 2,263,292 2,203,102	48 $ 2,070,556 2,266,561	60
					$ 2,074,345

Note: the compulsory automobile insurance, nuclear energy insurance and residential earthquake insurance are excluded.

1. The development trend of claims for 2020 is as the following:

Unit: NT$ Thousand

Incurred accumulated claims (claim expenses included)

Year/Month of the Accident 2016 2017 2018 2019 2020	12 $ 2,503,104 2,013,877 2,239,137 2,136,349 2,288,237	24 $ 2,499,139 2,087,243 2,298,119 2,204,071	36 $ 2,452,145 2,073,409 2,263,292	48 $ 2,417,893 2,070,556	60
					$ 2,408,709

Note: the compulsory automobile insurance, nuclear energy insurance and residential earthquake insurance are excluded.

XXX. Information of Foreign Currency Assets and Liabilities with Material Impacts

The following information is the consolidated expression of the foreign currencies other than the functional currency of the Company. The disclosed exchange rate refers to the exchange rate translating such foreign currencies to the functional currency. The foreign currency assets and liabilities with material impacts:

Unit: Foreign currency / NT$ Thousand

			Unit: Foreign currency / NT$ Thousand	Unit: Foreign currency / NT$ Thousand	Unit: Foreign currency / NT$ Thousand
Foreign assets Monetary items USD RMB Foreign liabilities Monetary items USD	December 31, 2021 Foreign Currency Exchange rate Carrying Amount $ 35,640 27.67 $ 986,172 70,313 4.35 305,862 853 27.67 23,611		December 31, 2020
	Foreign Currency $ 35,640 70,313 853	Exchange rate 27.67 4.35 27.67	Foreign Currency $ 30,521 55,942 241	Exchange rate 28.48 4.31 28.48	Carrying Amount
					$ 869,245 241,109 6,862

• 119 -

The unrealized profits/losses of the foreign currencies with material impacts are as follows:

follows:
Foreign Currency USD RMB	2021	Foreign exchange income or loss, net ($ 17,004) 2,358 ($ 14,646)	2020
	Exchange rate 27.67 4.35		Exchange rate 28.48 4.31	Foreign exchange income or loss, net
				($ 41,418) ( 688) ($ 42,106)

XXXI. Additional Disclosures

• (I) Information about significant transactions

• The amount of acquired properties is NT$100 million or more, or 20% of the paid-up capitals or more. (None)

• The amount of disposed properties is NT$100 million or more, or 20% of the paid-up capitals or more. (None)

• Transactions of the major core business items between the Company and the related parties, with the amount of NT$100 million or more, or 20% of the paidup capitals or more. (None)

• The receivables from the related parties is NT$100 million or more, or 20% of the paid-up capitals or more. (None)

• Transactions in engaging in derivative financial instruments. (None)

• Other information: Amount of the business relationship and major transactions between parent company and subsidiaries and among subsidiaries. (None)

• (II) Information related to reinvested enterprises.

• Information related to the name and location, etc., of the investee (the investees in mainland China excluded) (Table 1)

• Lending funds to others. (None)

• Providing endorsements or guarantees for others. (None)

• Securities held at the end of the period. (Table 2)

• Transactions where the aggregate purchases or sales of the same security reaching NT$100 million or 20% of paid-in capital or more. (None)

• 120 -

• The amount of acquired properties is NT$100 million or more, or 20% of the paid-up capitals or more.

(Not applicable)

1. The amount of disposal of properties is NT$100 million or more, or 20% of the paid-up capital or more.

(Not applicable)

1. Transactions of the major core business items between the Company and the related parties, with the amount of NT$100 million or more, or 20% of the paidup capitals or more. (Not applicable)

2. The receivables from the related parties is NT$100 million or more, or 20% of the paid-up capitals or more.

(Not applicable)

1. Trading in derivative instruments. (Not applicable)

2. (III) Information about investment in Mainland China

The Company has no investment in Mainland China.

• (IV) Information about major shareholders: Name, shareholdings and percentages of shareholders with more than 5% shareholding. (Table 3)

XXXII. Information about Segment

Based on International Financial Reporting Standards (IFRS) 8, “Operating Segments”, because the Company’s major business is a single business of non-life insurance, and when the management making the operational decisions, the applied company components are based on the holistic information of the Company, the Company is considered as a single operating segment, and the financial information of operating segments need not to be disclosed.

• 121 -

Table 1. Information related to the Name, Location of the Investee:

Unit: NT$ Thousand

Name of Investor	Name of Investee	Location	Main Activities	Original investment amount	Original investment amount	Holdings at end of period	Holdings at end of period	Holdings at end of period	Net income (losses) of the investee in period	Investment income (loss) recognized in period	Remarks
				End of the period	End of previous period	Shares (thousand shares)	%	Carrying Amount
Taiwan Fire & Marine Insurance Co., Ltd.	Top Taiwan X Venture Capital Co., Ltd.	Taipei City	INVESTMENTS	$ 198,000	$ 198,000	19,800	24.75	$ 264,896	$ 103,909	$ 25,718

• 122 -

Table 2. Securities held at the end of the period:

Unit: NT$ Thousand

Holding company’s name	Type and name of marketable securities	Relationship with the issuer	Financial statement account		Ending	Ending		Remarks
				Thousand unit/ thousand shares	Carrying amount	Equity (%)	Fair Value
Top Taiwan X Venture Capital Co., Ltd.	TSEC/GTSM listed shares YFYCPG (6790) Bafang Zhen Yu (2947) EMERGING SHARES BRYTON (7558) MP (6720) Unlisted Shares PIXORD USENLIGHT ADE Tripresso LYRA Viva Electronic CoreTech System Navifus Corporation (6872) Metanoia Communications Inc. Forland Auto Trade Holding Co., Ltd. Navigator Assets Navigator Financial Leasing AIVIVA Groundhog Technologies Taiwan Limite Ubitus Eastern Union Interactive Corp. TOPRAY MEMS INC. Backer-Founder Company Limited Great GiantFibre Garment Co.,Ltd.	None None None None None None None None None None None None None None None None None None None None None None None None	Financial assets at fair value through profit or loss 〃 〃 Financial assets at fair value through profit or loss 〃 Financial assets at fair value through profit or loss ″ ″ ″ ″ ″ ″ ″ ″ ″ ″ ″ ″ ″ ″ ″ ″ ″ ″	125 245 184 161 1,920 57 125 1,403 301 617 667 373 613 503 2,400 13,000 5,000 819 213 28 512 2,000 1,715 104	$ 6,275 31,483 22,572 6,632 87,623 145 1,791 12,122 497 - 7,764 48,414 12,172 7,042 129,096 449,930 35,150 2,579 10,946 7,551 17,644 7,220 15,847 14,454	- - - - - - - - - - - - - - - - - - - - - - - -	$ 6,275 31,483 22,572 6,632 87,623 145 1,791 12,122 497 - 7,764 48,414 12,172 7,042 129,096 449,930 35,150 2,579 10,946 7,551 17,644 7,220 15,847 14,454

• 123 -

Table 3. Information about major shareholders:

Name of major shareholder	Shares	Shares
	Shares held	Equity (%)
Bank of Taiwan Co., Ltd. Navigator Investment Co., Ltd. Yong-Shin Development Co., Ltd.	64,608,278 25,168,675 24,158,535	17.84% 6.95% 6.67%

• Note: The information about major shareholders referred to in the table is based on the information about the shareholders holding more than 5% of the common shares (including treasury stock) of the Company for which the Company has already completed the nontangible registration and delivery, as made available by TDCC on the last business day of the given quarter. The capital stock recorded herein might be different, or vary, from the number of shares for which the non-tangible registration/delivery has been completed, depending on the preparation basis.

• 124 -

§ CONTENTS OF TABLE FOR SIGNIFICANT ACCOUNTING

ITEMS §

NUMBER/INDEX

ITEM

Asset, liability and equity items Statement of cash and cash equivalents Statement of Notes receivable Statement of Premiums receivable Statement of Other receivable Statement of Financial asset at fair value through profit or loss Statement of Financial asset at fair value through other comprehensive income Statement of Investment accounted for using equity method Due from/to reinsurers and ceding companies Statement of Changes in Intangible Assets Statement of Other assets Statement of Other payable Statement of changed unearned premium reserves Statement of changed special reserves Statement of changed claim reserves Statement of changed insufficient premium reserves Detailed list for changes of special profit reserves (material accidents or hazard changes special reserves) Calculation table for provision of special reserve (special reserve for material accidents and hazard changes) Calculation table for recovery of special reserves (special reserve for material accidents and hazard changes) Statement of Lease liabilities Statement of Other liabilities Statement of other financial assets Note 12 Statement of Change of investment property Note 13 Statement of Accumulated depreciation of investment Note 13 property Statement of changed property and equipment Note 14 Statement of Accumulated depreciation of property and Note 14 equipment Statement of Changes in Right-of-Use Assets Note 15 Statement of Changes in Accumulated Depreciation of RightNote 15 of-Use Assets Statement of Reserve for liabilities Note 17 Statement of Deferred income tax assets Note 21 Statement of Deferred income tax liabilities Note 21 Statement of Claim recoverable from reinsurers Note 27

Statement 1 Statement 2 Statement 3 Statement 4 Statement 5 Statement 6 Statement 7 Statement 8 Statement 9 Statement 10 Statement 11 Statement 12 Statement 12 Statement 12 Statement 12 Statement 13

Statement 14

Statement 15 Statement 16 Statement 17 Note 12 Note 13 Note 13

• 125 -

ITEM

NUMBER/INDEX

Statement of Gain and loss items Statement of retained earned premium Statement 18 Statement of Interest income Statement 19 Statement of share of profit of associates and joint ventures Statement 20 accounted for using equity method Exchange gain (loss) – Investment Statement Statement 21 Statement of Other Operating Revenues and Costs Statement 22 Detailed list of retained claims Statement 23 Statement of Service expenses Statement 24 Statement of Administrative Expenses Statement 25 Statement of Non-operating income and expenses Statement 26 Statement of Gain on financial assets and liabilities at fair Note 20 value through profit or loss Statement of Realized gain and losses on financial assets at Note 20 fair value through other comprehensive income Statement of Gain (loss) on investment properties Note 20 Statement of Expected credit losses or reversal of expected Note 20 credit losses of investments Summary of nature of employee benefits, depreciation and Note 20 amortization of the year Statement of Commission Expenses Note 26

• 126 -

Taiwan Fire & Marine Insurance Co., Ltd. Statement of cash and cash equivalents December 31, 2021

	December 31, 2021
Statement 1 Title Cash on hand Working Capital Checking deposits Demand deposits Time deposits Commercial paper Less: Deductible of refundable deposits	Summary Foreign currencies included RMB: 5,131@4.35, USD: 4,421@27.67, STG: 315@37.26, YEN: 17@0.24, HKD: 150@3.55, EUR: 427@31.3 Maturity within 3 months Matured on January 3 to February 11, 2022 Demand deposits	Unit: NT$ Thousand Amount
		(	$ 80 32,879 185,303 2,483,061 235,200 1,298,685 56,870) $ 4,178,338

• 127 -

Taiwan Fire & Marine Insurance Co., Ltd.

Statement of Notes receivable

December 31, 2021

Statement 2 Unit: NT$ Thousand

Customer Taipei Bus Company, Ltd. Others (Note) Less: allowance loss	Summary		Amount
		(	$ 4,982 94,523 995) $ 98,510

Note: the cumulation of the balance of each client under 5% of the balance of this account.

• 128 -

Taiwan Fire & Marine Insurance Co., Ltd.

Statement of Premiums receivable December 31, 2021

Statement 3 Unit: NT$ Thousand

Customer National Applied Research Laboratories Others (Note) Less: allowance loss	Summary		Amount
		(	$ 32,743 502,387 46,232) $ 488,898

Note: the cumulation of the balance of each client under 5% of the balance of this account.

• 129 -

Taiwan Fire & Marine Insurance Co., Ltd.

Statement of Other receivable

December 31, 2021

	December 31, 2021
Statement 4 Item Interest receivable Other receivable Stock dividends receivable Less: allowance loss	Summary Interest on time deposit Government bond Financial bonds Corporate bonds Covered claims receivable Withdrawal commission receivable	Unit: NT$ Thousand Amount
		(	$ 55,691 5,708 2,057 957 13,642 7,510 620 4,792) $ 81,393

• 130 -

Unit: NT$ thousand, unless specified otherwise

Taiwan Fire & Marine Insurance Co., Ltd.

Statement of Financial asset at fair value through profit or loss

December 31, 2021

Statement 5

Title TSEC/GTSM listed shares Makalot Industrial Co., Ltd. EMC (2383) Chunghwa Telecom Co., Ltd. (CHT) Elan Microelectronics Corp (ELAN) China Bills Finance Corporation (CBF) Fubon Financial Holding Co., Ltd. (Fubon Financial) Waterland Financial Holding Co., Ltd. (Waterland) First Financial Holding Co. Ltd. (FFHC) VIS (5347) Domestic Mutual Funds Allianz Global Investors China Strategic Growth Fund (TWD) PineBridge Preferred Securities Income Fund TWD A JPMorgan (Taiwan) Greater Europe Fund Fuh Hwa Emerging Market Short-term Income Fund UOB Taiwan Balanced Income Fund Abico Asia Capital II Excellent Transformation and Growth Limited Partnership Corporate bonds Non-cumulative perpetual subordinated corporate bonds, phase 1, 2012, Shin Kong Life Insurance Co., Ltd. (B99001) Non-cumulative perpetual subordinated corporate bonds, phase 1, 2014, Mercuries Life Insurance Co., Ltd. (B99201)	Summary Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually	Shares (Share) 70,000 40,000 81,055 376,600 600,000 219,512 573,000 417,985 70,000 670,770 2,911,613 992,654 2,842,650 1,813,682 - 50 50	Face Value (NT$) 10 10 10 10 10 10 10 10 10 10 10 10 10 10 - 1,000,000 1,000,000	Total amount $ 700 400 811 3,766 6,000 2,195 5,730 4,180 700 6,708 29,116 9,927 28,427 18,137 39,600 50,000 50,000	Interest rate % 3.35 3.90		Acquisition Cost $ 17,058 9,115 7,173 57,960 6,375 12,184 4,803 5,896 10,233 130,797 20,408 30,769 20,000 31,294 20,000 39,600 162,071 50,000 50,000	Fair Value Unit price (NT$) 247.00 278.00 116.50 170.00 17.20 76.30 16.05 24.50 158.00 29.70 11.28 20.43 11.70 11.43 - 101.23 103.93		Total value $ 17,290 11,120 9,443 64,022 10,320 16,749 9,197 10,240 11,060 159,441 19,922 32,843 20,280 33,259 20,730 44,742 171,776 50,613 51,967		Fair value changes attributed to credit risks $ - - - - - - - - - - - - - - - - - - -	Remarks

(To be continued)

• 131 -

(Continued)

Title Non-cumulative perpetual subordinated corporate bonds, phase 1, 2016, Mercuries Life Insurance Co., Ltd. (B99202) Non-cumulative perpetual subordinated corporate bonds, phase 1, 2017, Cathay Life Insurance Co., Ltd. (B99601) Non-cumulative perpetual subordinated corporate bonds, phase 1, 2017, Taiwan Life Insurance Co., Ltd. (B99701) Non-cumulative perpetual subordinated corporate bonds, phase 1, 2017, Nan Shan Life Insurance Company Ltd. (B99402) Non-cumulative perpetual subordinated corporate bonds, phase 1, 2019, Cathay Life Insurance Co., Ltd. (B99602) Financial bonds Non-cumulative perpetual subordinated financial bonds, phase 3, 2015, Yuanta Commercial Bank Co., Ltd. (G10822) Non-cumulative perpetual subordinated financial bonds, phase 1, 2015, Taichung Commercial Bank. (G13012) Non-cumulative perpetual subordinated financial bonds, phase 1, 2016, Taichung Commercial Bank. (G13013) Non-cumulative perpetual subordinated financial bonds, phase 1, 2017, Union Commercial Bank Co., Ltd. (G10920) Non-cumulative unsecured perpetual subordinated financial bonds, phase 2, 2017, Taichung Commercial Bank Co. Ltd. (G13015) Non-cumulative perpetual subordinated financial bonds, phase 4, 2017, Bank of Panshin Co., Ltd. (G12523)	Summary Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually	Shares 50 100 100 50 100 10 14 14 100 5.5 10	Face Value (NT$) 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 10,000,000 10,000,000 10,000,000 1,000,000 10,000,000 1,000,000	Total amount $ 50,000 100,000 100,000 50,000 100,000 100,000 140,000 140,000 100,000 55,000 10,000	Interest rate % 3.70 3.30 3.45 3.45 3.00 4.10 4.28 4.14 4.20 4.14 4.75		Acquisition Cost $ 50,000 100,000 100,000 50,000 100,000 500,000 100,000 140,000 140,000 100,000 55,000 10,000	Fair Value Unit price (NT$) 103.68 104.09 104.11 104.13 103.64 104.46 100.00 100.00 100.14 103.26 100.38		Total value $ 51,841 104,085 104,106 52,067 103,637 518,316 104,457 140,000 140,000 100,139 56,791 10,038		Fair value changes attributed to credit risks $ - - - - - - - - - - - -	Remarks

(To be continued)

• 132 -

(Continued)

Title Non-cumulative perpetual subordinated financial bonds, phase 1, 2019, Chang Hwa Commercial Bank, Ltd. (G14937) Non-cumulative unsecured perpetual subordinated financial bonds, phase 3, 2019, Sunny Bank Ltd. (G12249) Non-cumulative perpetual subordinated financial bonds, phase 1, 2020, Chang Hwa Commercial Bank, Ltd. (G14938) Non-cumulative unsecured perpetual subordinated financial bonds, phase 2, 2020, Taipei Fubon Commercial Bank Co., Ltd. (G107BX) Non-cumulative unsecured perpetual subordinated financial bonds, phase 1, 2020, Shin Kong Commercial Bank Co., Ltd. (G11657) Non-cumulative unsecured perpetual subordinated financial bonds, phase 2, 2020, Sunny Bank Ltd. (G12251) Non-cumulative perpetual subordinated financial bonds, phase 1, 2021, Union Bank of Taiwan Co., Ltd. (G10923) Non-cumulative unsecured perpetual subordinated financial bonds, phase 1, 2021, Sunny Bank Ltd. (G12253) 2nd unsecured, perpetual, non- cumulative and subordinated financial, 2016, E-Sun Bank (F02807)	Summary Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually Perpetual, interest is calculated in simple interest and paid annually	Shares 5 10 5 5 10 10 100 10 4	Face Value (NT$) 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 1,000,000 10,000,000 USD 1,000,000	Total amount $ 50,000 100,000 50,000 50,000 100,000 100,000 100,000 100,000 USD 4,000	Interest rate % 1.90 3.00 1.40 1.60 1.70 2.68 1.92 2.25 5.10		Acquisition Cost $ 50,000 100,000 50,000 50,000 100,000 100,000 100,000 100,000 128,877 1,323,877 $ 2,116,745	Fair Value Unit price (NT$) 100.81 100.00 100.31 100.28 100.28 100.00 100.00 100.00 116.63		Total value $ 50,404 100,000 50,156 50,138 100,280 100,000 100,000 100,000 129,087 1,331,490 $ 2,181,023		Fair value changes attributed to credit risks $ - - - - - - - - - - $ -	Remarks

• 133 -

Taiwan Fire & Marine Insurance Co., Ltd.

Statement of Financial asset at fair value through other comprehensive income

December 31, 2021

Statement 6

Unit: NT$ thousand, unless specified otherwise

Title TSEC/GTSM listed shares Taiwan Cement Corporation Far Eastern New Century Corporation Taiwan Fertilizer Co., Ltd. (TFC) Taiyen Biotech Co., Ltd. (Taiyen) Yulon Motor Co., Ltd. (YL) Lite-On Technology Corporation (LTC) Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) Quanta Computer Inc. (QCI) Chunghwa Telecom Co., Ltd. (CHT) Elan Microelectronics Corp (ELAN) Bafang Yunji Taichung Commercial Bank Co., Ltd. UNION INS. China Bills Finance Corporation (CBF) Taiwan Business Bank, Ltd. (TBB) Entie Commercial Bank, Ltd. Shinkong Insurance Co., Ltd. FIRST INS Fubon Financial Holding Co., Ltd. Preferred Stock Fubon Financial Holding Co., Ltd. Preferred Stock B Fubon Financial Holding Co., Ltd. Preferred Stock C Cathay Financial Holding Co., Ltd. Preferred Stock Cathay Financial Holding Co., Ltd. Preferred Stock B China Development Financial Holding Corp. (CDIBH) Taishin Financial Holding Co., Ltd. (TSFHC) Taishin Financial Holding Co., Ltd. Preferred Stock E Shin Kong Financial Holding Co.,LTD. (SKFH) Shin Kong Financial Holding Co., Ltd. Preferred Stock B Waterland Financial Holding Co., Ltd. (Waterland) SinoPac Holdings CTBC Financial Holding Co., Ltd. CTBC Financial Holding Co., Ltd. Preferred Shares B CTBC Financial Holding Co., Ltd. Preferred Shares C Test Rite Internaional Co., Ltd. (Test Rite) Txc Corporation (TXC) Sirtec International Co., Ltd. (SIRTEC) Topco Scientific Co.,Ltd. (TOPCO) Chailease Holding Company Limited Class A Preferred Shares (Chailease PREF A) Taiming Assurance Broker Co., Ltd. (TABC) Taiwan Cooperative Financial Holding Co., Ltd. (TCFHC)	Summary	Shares 1,746,514 542,000 850,000 1,227,273 1,228,926 276,000 65,000 130,000 647,000 591,000 194,000 43,839,297 90,300 898,000 2,914,603 749,000 963,000 1,389,000 3,173,000 1,062,000 1,434,420 3,221,923 1,716,000 15,368,000 314,530 1,000,000 180,215 3,200,000 41,770,922 6,083,000 5,050,000 1,618,000 840,000 1,300,898 200,000 10,005,600 23,000 900,000 1,271,180 57,670	Face Value (NT$) 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10	Total amount $ 17,465 5,420 8,500 12,273 12,289 2,760 650 1,300 6,470 5,910 1,940 438,393 903 8,980 29,146 7,490 9,630 13,890 31,730 10,620 14,344 32,219 17,160 153,680 3,145 10,000 1,802 32,000 417,709 60,830 50,500 16,180 8,400 13,009 2,000 100,056 230 9,000 12,712 577	Allowance loss (Note) $ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	Adjustment to Allowance for Changes in Value $ 4,068 ( 1,526 ) 4,026 ( 903 ) ( 56,105 ) 561 1,741 2,607 3,875 12,769 1,261 210,302 182 2,262 9,021 1,318 9,974 1,144 1,035 1,611 144 3,143 5,918 79,603 2,343 3,100 514 ( 6,880 ) 320,260 17,899 23,864 4,337 1,344 ( 1,882 ) 1,188 ( 260,269 ) 566 1,350 12,097 750	Acquisition Cost $ 79,765 17,407 55,474 41,648 107,597 17,048 38,234 9,704 71,500 87,701 23,668 322,345 1,588 13,184 19,834 10,928 35,769 19,205 199,499 65,401 86,065 199,516 103,048 189,337 3,617 50,000 1,478 144,000 350,163 80,341 107,183 99,539 50,400 29,916 19,912 545,429 3,068 90,000 48,157 717	Fair Value Unit price (NT$) Total amount 48.00 $ 83,833 29.30 15,881 70.00 59,500 33.20 40,745 41.90 51,492 63.80 17,609 615.00 39,975 94.70 12,311 116.50 75,375 170.00 100,470 128.50 24,929 12.15 532,647 19.60 1,770 17.20 15,446 9.90 28,855 16.35 12,246 47.50 45,743 14.65 20,349 63.20 200,534 63.10 67,012 60.10 86,209 62.90 202,659 63.50 108,966 17.50 268,940 18.95 5,960 53.10 53,100 11.05 1,992 42.85 137,120 16.05 670,423 16.15 98,240 25.95 131,047 64.20 103,876 61.60 51,744 21.55 28,034 105.50 21,100 28.50 285,160 158.00 3,634 101.50 91,350 47.40 60,254 25.45 1,467	Remarks
								Unit price (NT$) 48.00 29.30 70.00 33.20 41.90 63.80 615.00 94.70 116.50 170.00 128.50 12.15 19.60 17.20 9.90 16.35 47.50 14.65 63.20 63.10 60.10 62.90 63.50 17.50 18.95 53.10 11.05 42.85 16.05 16.15 25.95 64.20 61.60 21.55 105.50 28.50 158.00 101.50 47.40 25.45

(To be continued)

• 134 -

(Continued)

Title Hotai Finance Co., Ltd. (HOTAI FINANCE) HIM International Music Inc. (HIM Music) Unlisted Shares Qi-Ding Venture Capital Co., Ltd. Yuan-Ding Venture Capital Co., Ltd. Jiu-Dingg Venture Capital Co., Ltd. Top Taiwan Venture Capital Co., Ltd. Wan-Da Venture Capital Co., Ltd. Top Taiwan Xii Venture Capital Co., Ltd. Corporate Bonds China Development Financial 2017 1st Subordinated Unsecured Common Corporate Bonds Note B Barclays PLC 2019 Senior Unsecured Corporate Bonds HSBC Holdings plc 2021 Senior Unsecured RMB Corporate Bonds denominated Korea Eximbank 2021 Senior Unsecured Corporate Bonds Commonwealth Bank of Australia 2019 Senior Unsecured Corporate Bonds HONHAI 3 09/23/26 ICBCAS 2 7/8 02/21/22 ALIBABA GROUP HOLDING LTD ICBCAS 2.875 10/12/22 JP Morgan Chase Bank 2021 Senior Unsecured Corporate Bonds Competition Team Technologies Limited 2019 Senior Unsecured Corporate Bonds HSBC Holdings plc 2016 Senior Unsecured Corporate Bonds Australia and New Zealand Banking Group Limited, London Branch 2017 Senior Unsecured Corporate Bonds NESNVX 1 7/8 09/14/31	Summary Matures on September 8, 2027, the principal repaid at one time, the interest paid on September 8 every year. Matures on May 30, 2025, the principal repaid at one time, the interest paid on May 30 every year. Matures on June 29, 2027, the principal repaid at one time, the interest paid on June 29 every year Matures on March 3, 2021, the principal repaid at one time, the interest paid on March 3 every year. Matures on March 11, 2024, the principal repaid at one time, the interest paid on March 11 every year. Matures on September 23, 2026, the interests are repaid every six months, the principal is repaid at once when matures. Matures on February 21, 2022, the interests are repaid every six months, the principal is repaid at once when matures. Matures on November 28, 2024, the interests are repaid every six months, the principal is repaid at once when mature Matures on October 12, 2022, the interests are repaid every six months, the principal is repaid at once when mature. Matures on June 1, 2029, the interests are repaid every six months, the principal is repaid at once when mature. Matures on March 12, 2024, the interests are repaid every six months, the principal is repaid at once when mature. Matures on May 25, 2026, the interests are repaid every six months, the principal is repaid at once when mature. Matures on July 17, 2027, the interests are repaid every six months, the principal is repaid at once when mature. Matures on September 14, 2030, the interests are repaid every six months, the principal is repaid at once when mature.	Shares 369,000 110,000 268,000 1,906,666 6,000,000 6,000,000 3,000,000 20,000,000 100 10 15 15 15 3,200 1,000 1,000 1,000 1,000 2,000 3,500 3,000 2,000	Face Value (NT$) 10 10 10 10 10 10 10 10 1,000,000 CNY 1,000,000 CNY 1,000,000 CNY 1,000,000 CNY 1,000,000 USD 1,000 USD 1,000 USD 1,000 USD 1,000 USD 1,000 USD 1,000 USD 1,000 USD 1,000 USD 1,000	Total amount $ 3,690 1,100 2,680 19,067 60,000 60,000 30,000 200,000 100,000 CNY 10,000 CNY 15,000 CNY 15,000 CNY 15,000 USD 3,200 USD 1,000 USD 1,000 USD 1,000 USD 1,000 USD 2,000 USD 3,500 USD 3,000 USD 2,000	Allowance loss (Note) $ - - - - - - - - - - ( 96 ) ( 17 ) ( 25 ) - ( 17 ) ( 35 ) ( 10 ) ( 11 ) ( 10 ) - ( 22 ) ( 40 ) ( 34 ) ( 12) ( 329 )	Adjustment to Allowance for Changes in Value $ 4,479 ( 4,099) 418,992 ( 519 ) 14,825 62,512 2,267 ( 12,326 ) 27,670 94,429 78 5 ( 180 ) ( 506 ) ( 589 ) 8,690 78 1,604 568 ( 750 ) 2,742 4,628 4,264 31 20,663	Acquisition Cost $ 29,543 14,010 3,482,938 2,680 19,067 60,000 60,000 30,000 200,000 371,747 103,536 43,500 65,757 65,497 66,617 84,122 27,668 27,573 27,497 28,204 55,452 100,087 85,666 54,458 835,634	Fair Value Unit price (NT$) Total amount 92.20 $ 34,022 90.10 9,911 3,901,930 8.07 2,161 17.78 33,892 20.42 122,512 10.38 62,267 5.89 17,674 11.38 227,670 466,176 103.52 103,518 99.97 43,488 100.46 65,552 99.60 64,991 101.17 66,011 104.78 92,777 100.24 27,736 105.41 29,166 101.39 28,055 99.22 27,454 105.12 58,172 108.09 104,675 108.30 89,896 98.44 54,477 855,968	Fair Value Unit price (NT$) Total amount 92.20 $ 34,022 90.10 9,911 3,901,930 8.07 2,161 17.78 33,892 20.42 122,512 10.38 62,267 5.89 17,674 11.38 227,670 466,176 103.52 103,518 99.97 43,488 100.46 65,552 99.60 64,991 101.17 66,011 104.78 92,777 100.24 27,736 105.41 29,166 101.39 28,055 99.22 27,454 105.12 58,172 108.09 104,675 108.30 89,896 98.44 54,477 855,968	Remarks
								Unit price (NT$) 92.20 90.10 8.07 17.78 20.42 10.38 5.89 11.38 103.52 99.97 100.46 99.60 101.17 104.78 100.24 105.41 101.39 99.22 105.12 108.09 108.30 98.44
					( ( ( ( ( ( ( ( ( ( ( ( (	( ( ( ( ( ( (

(To be continued)

• 135 -

(Continued)

Title Financial bonds Subordinated financial bonds, phase 1, 2017, Bank of Panshin Co., Ltd. Subordinated financial bonds, phase 5, 2017, Bank of Panshin Co., Ltd. Subordinated financial bonds, phase 1, 2019, Bank of Panshin Co., Ltd. 1st unsecured subordinated financial bonds, 2021, Taiwan Cooperative Bank Unsecured Senior USD financial bonds, phase 3, 2017, Cathay United Bank Government Bonds Category A Phase 5 Central Government Construction Bond, 2012 Category A Phase 10 Central Government Construction Bond, 2013 Category A Phase 1 Central Government Construction Bond, 2021 90 Central Government Construction Bond A5 94 Central Government Construction Bond A3 Category A Phase 5 Central Government Construction Bond, 2008 Deductible of refundable deposits	Summary Matures on March 22, 2024, the principal repaid at one time, the interest paid on March 22 every year. Matures on November 15, 2024, the principal repaid at one time, the interest paid on November 15 every year. Matures on June 26, 2026, the principal repaid at one time, the interest paid on June 26 every year Matures on May 31 2026, the principal repaid at one time, the interest paid on May 31 every year Matures on November 24, 2047, the principal repaid at one time, the interest paid when matures. Matures on March 7, 2022, the principal repaid at one time, the interest paid on March 7 every year. Matures on September 18, 2023, the principal repaid at one time, the interest paid on September 18 every year. Matures on January 13 2026, the principal repaid at one time, the interest paid on January 13 every year Matures on July 17, 2031, the principal repaid at one time, the interest paid on July 17 every year. Matures on February 25 2025, the principal repaid at one time, the interest paid on February 25 every year Matures on August 14, 2028, the principal repaid at one time, the interest paid on August 14 every year.	Shares 10 3 1 5 5 1,000 500 1,000 1,000 500 1,500	Face Value (NT$) 1,000,000 10,000,000 10,000,000 10,000,000 USD 1,000,000 100,000 100,000 100,000 100,000 100,000 100,000	Total amount $ 10,000 30,000 10,000 50,000 USD 5,000 100,000 50,000 100,000 100,000 50,000 150,000	Allowance loss (Note) ( $ 50 ) ( 150 ) ( 50 ) ( 13 ) ( 35) ( 298 ) ( 25 ) ( 13 ) ( 25 ) ( 32 ) ( 14 ) ( 43) ( 152 ) 152 ( $ 627 )	Adjustment to Allowance for Changes in Value $ 50 149 49 13 ( 104) 157 257 1,170 ( 1,229 ) 18,836 129 17,312 36,475 ( 36,475 ) $ 534,241	Acquisition Cost $ 10,000 30,000 10,000 50,000 138,350 238,350 99,951 50,087 100,000 110,712 53,246 153,311 567,307 ( 567,307 ) $ 4,928,669	Fair Value Unit price (NT$) Total amount 99.99 $ 10,000 100.00 29,999 99.99 9,999 100.00 50,000 99.90 138,211 238,209 100.18 100,183 102.49 51,244 98.75 98,746 129.52 129,516 106.72 53,361 113.72 170,580 603,630 ( 603,630) $ 5,462,283	Fair Value Unit price (NT$) Total amount 99.99 $ 10,000 100.00 29,999 99.99 9,999 100.00 50,000 99.90 138,211 238,209 100.18 100,183 102.49 51,244 98.75 98,746 129.52 129,516 106.72 53,361 113.72 170,580 603,630 ( 603,630) $ 5,462,283	Remarks
								Unit price (NT$) 99.99 100.00 99.99 100.00 99.90 100.18 102.49 98.75 129.52 106.72 113.72
					( ( ( ( ( ( ( ( ( ( ( ( ( (	( ( (	(		(

Note: N/A, in the case of TWSE/TPEx-listed shares, emerging shares and unlisted shares.

• 136 -

Taiwan Fire & Marine Insurance Co., Ltd.

Statement of Investment accounted for using equity method

2021

Statement 7

Unit: NT$ Thousand

Title Wen-Ding Venture Capital Co., Ltd. (Note)	Balance-beginning of year Shares (thousand shares) Amount 19,800 $ 242,485	Increase in the year Shares (thousand shares) Amount - $ 25,718	Decrease in the year Shares (thousand shares) Amount - ( $ 3,307 )	Balance-end of year Shares (thousand shares) Equity (%) Amount 19,800 24.75 $ 264,896	Balance-end of year Shares (thousand shares) Equity (%) Amount 19,800 24.75 $ 264,896	Market value	or net worth Total value $ 264,896	Collateralized or pledged
	Shares (thousand shares) 19,800	Shares (thousand shares) -	Shares (thousand shares) -	Shares (thousand shares) 19,800	Equity (%) 24.75	Unit price
								None

Note: The increase by NT$25,718 thousand was a result of the shares of the income from affiliates and joint ventures recognized under equity method. The decrease by NT$3,307 thousand this year was a result of collected cash dividends.

• 137 -

Taiwan Fire & Marine Insurance Co., Ltd. Due from/to reinsurers and ceding companies December 31, 2021

Statement 8

Unit: NT$ Thousand

Summary Due from reinsurers and ceding companies The Non-Life Insurance Association of the R.O.C. Chung Kuo Insurance Co., Ltd. Taiwan Residential Earthquake Insurance Fund (TREIF) New India Assurance Co., Ltd Swiss Re Asia Pte. Ltd. Hong Kong Branch Others (Note) Less: allowance loss	Debit balance $ 44,940 15,067 11,202 8,921 8,894 75,322 ( 10,575) $ 153,771	Summary Due to reinsurers and ceding companies Taiwan Residential Earthquake Insurance Fund (TREIF) Central Reinsurance Corporation The Non-Life Insurance Association of the R.O.C. Partner Reinsurance Europe SE Hong Kong Branch Transatlantic Reinsurance Company Hong Kong Branch Munich Reinsurance Company Others (Note)		Credit balance $ 58,335 43,741 41,990 29,370 25,506 23,806 162,503 - $ 385,251	Remarks
	(

Note: the cumulation of the balance of each client under 5% of the balance of this account.

• 138 -

Taiwan Fire & Marine Insurance Co., Ltd. Statement of Changes in Intangible Assets From January 1 to December 31, 2021

Statement 9

Unit: NT$ Thousand

Computer software (Note)	Balance - beginning of year Increase in the year $ 9,957 $ 7,659		Decrease in the year Balance - end of year $ 5,543) $ 12,073	Remarks
		(

Note: The increase in the year was primarily a result of the procurement by NT$7,659 thousand. The decrease in the year was primarily a result of the amortization by NT$5,543 thousand.

• 139 -

	Taiwan Fire & Marine Insurance	Co., Ltd.
	Statement of Other assets
	December 31, 2021
Statement 10			Unit: NT$ Thousand
Title	Summary	Amount	Remarks
Refundable Deposit	Bond of	$ 603,630
	Insurance
	Enterprises
	Others (Note)	80,015
Other assets - others	(note)	51,625
		$ 735,270

Note: Cumulation of the balance of each items under 5% of the balance of this account.

• 140 -

Taiwan Fire & Marine Insurance Co., Ltd.

Statement of Other payable December 31, 2021

Statement 11

Unit: NT$ Thousand

Item Expenses payable Other payable	Summary Salary, remuneration and bonus Others (Note) Premium refund payable Others (Note)		Amount
			$ 253,352 60,525 17,583 6,471 $337,931

Note: Cumulation of the balance of each items under 5% of the balance of this account.

• 141 -

Taiwan Fire & Marine Insurance Co., Ltd.

Detailed list of reinsurance reserve assets and insurance liabilities

From January 1 to December 31, 2021

Statement 12

Item Unearned premium reserves Total amount: One-year Residential Fire Insurance One-year Commercial Fire Insurance General Personal Automobile Physical Damage Insurance General Personal Automobile Liability Insurance Compulsory Automobile Liability Insurance Compulsory Motorcycle Liability Insurance Engineering Insurance Personal Accident Insurance Others Split as: One-year Commercial Fire Insurance Compulsory Automobile Liability Insurance Compulsory Motorcycle Liability Insurance General Liability Insurance Engineering Insurance Others Change in special reserves Special reserves for material accidents: Commercial earthquake insurance Typhoon and Flood Insurance Special reserves for hazard changes: Commercial earthquake insurance Typhoon and Flood Insurance Other special reserves: Compulsory Automobile Liability Insurance Compulsory Commercial Automobile Liability Insurance	Balance - beginning of year $ 191,446 242,321 532,521 818,135 236,608 216,385 257,293 241,880 711,212 3,447,801 123,602 101,626 89,680 55,425 148,202 283,649 802,184 2,645,617 105,690 72,318 178,008 610,883 185,665 796,548 284,208 60,834	Net changes of the Year $ 6,353 26,578 36,646 54,417 629 3,147 ( 6,179 ) 5,483 132,013 259,087 11,348 ( 670 ) 1,384 15,406 ( 7,074 ) 343 20,737 238,350 ( 4,804 ) ( 3,287) ( 8,091) - - - 34,403 10,101	Other changed amount $ - - - - - - - - - - - - - - - - - - - - - - - - - -	Balance-end of year	Balance-end of year
					$ 197,799 268,899 569,167 872,552 237,237 219,532 251,114 247,363 843,225 3,706,888 134,950 100,956 91,064 70,831 141,128 283,992 822,921 2,883,967 100,886 69,031 169,917 610,883 185,665 796,548 318,611 70,935

Unit: NT$ Thousand

Remarks

(To be continued)

• 142 -

(Continued)

Item Compulsory Motorcycle Liability Insurance Nuclear Energy Insurance Residential earthquake insurances as the government policy Claim reserves Total amount: Reported but not yet paid One-year Commercial Fire Insurance Marine Cargo Insurance General Personal Automobile Physical Damage Insurance General Personal Automobile Liability Insurance Compulsory Automobile Liability Insurance Engineering Insurance Others Not yet reported General Personal Automobile Liability Insurance Compulsory Automobile Liability Insurance Compulsory Motorcycle Liability Insurance Miscellaneous Insurance Personal Accident Insurance Others Split as: Reported but not yet paid One-year Commercial Fire Insurance Marine Cargo Insurance Marine Hull Insurance Aviation Insurance Compulsory Automobile Liability Insurance Engineering Insurance Others Not yet reported Marine Cargo Insurance Compulsory Automobile Liability Insurance Compulsory Commercial Automobile Liability Insurance	Balance - beginning of year $ 568,796 66,260 164,045 1,144,143 2,118,699 153,074 129,741 157,333 530,387 76,774 102,355 709,254 1,858,918 129,758 343,605 135,908 5,175 84,425 336,556 1,035,427 2,894,345 95,535 109,141 67,023 42,954 31,792 60,203 151,199 557,847 39,600 155,654 31,796	Net changes of the Year ( $ 7,601 ) - - 36,903 28,812 205,909 11,162 ( 2,076 ) 38,098 31,344 20,480 ( 59,150) 245,767 2,349 ( 86,467 ) 77,249 67,222 ( 2,419 ) ( 18,473) 39,461 285,228 107,990 17,395 ( 10,342 ) 756 9,642 11,858 9,749 147,048 2,100 ( 51,224 ) ( 11,722 )	Other changed amount $ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	Balance-end of year $ 561,195 66,260 164,045 1,181,046 2,147,511 358,983 140,903 155,257 568,485 108,118 122,835 650,104 2,104,685 132,107 257,138 213,157 72,397 82,006 318,083 1,074,888 3,179,573 203,525 126,536 56,681 43,710 41,434 72,061 160,948 704,895 41,700 104,430 20,074	Remarks

(To be continued)

• 143 -

(Continued)

Item Compulsory Motorcycle Liability Insurance Others Accumulated impairment Premium deficiency reserves Total amount: Fishing Vessel Insurance Aviation Insurance Miscellaneous Insurance	Balance - beginning of year $ 55,007 85,500 367,557 ( 314) 925,090 1,969,255 2,988 2,577 2,023 7,588 $ 6,741,159	Net changes of the Year $ 46,690 1,099 ( 13,057) - 133,991 151,237 ( 268 ) 755 5,821 6,308 $ 424,707	Other changed amount $ - - - 71 71 ( 71) - - - - ($ 71)	Balance-end of year $ 101,697 86,599 354,500 ( 243) 1,059,152 2,120,421 2,720 3,332 7,844 13,896 $ 7,165,795	Remarks
	(		( (	(

Note: the balance of each insurance type less than 5% of the total are stated collectively.

• 144 -

Taiwan Fire & Marine Insurance Co., Ltd.

Detailed list for changes of special profit reserves (material accidents or hazard changes special reserves) From January 1 to December 31, 2021

Statement 13

Item One-year Residential Fire Insurance Long-term Residential Fire Insurance One-year Commercial General Fire Insurance Long-term Commercial General Fire Insurance Inland Marine Insurance Marine Cargo Insurance Marine Hull Insurance Fishing Vessel Insurance Aviation Insurance General Personal Automobile Physical Damage Insurance General Commercial Automobile Physical Damage Insurance General Personal Automobile Liability Insurance General Commercial Automobile Liability Insurance General Liability Insurance Professional Liability Insurance Engineering Insurance Nuclear Energy Insurance Bonding Insurance Credit Insurance Miscellaneous Insurance Personal Accident Insurance Commercial earthquake insurance Personal Comprehensive Insurance Commercial Comprehensive Insurance Typhoon and Flood Insurance Residential Earthquake Insurance One-year Health Insurance Overseas division business Total	Balance - beginning of year $ 171,355 8,430 119,965 1,605 1,431 29,188 10,780 6,410 1,637 221,211 1,729 107,687 43,726 71,930 2,365 35,229 37,428 6,692 71 6,409 155,245 236,945 18,775 15,684 162,303 428,871 3,207 1,296 $ 1,907,604	Appropriation for the Year $ 26,974 540 7,802 62 356 4,065 187 938 97 22,874 501 29,453 2,388 5,704 254 4,957 2,670 820 554 44,783 19,691 26,522 3,297 1,385 18,397 56,027 196 9,731 $ 291,225	Recovery for the Year $ 1,622 2,362 3,120 202 - - 1,924 - 830 - - - - 8,165 370 - - 784 - 1,087 15,381 - 1,789 166 - - 881 9,571 $ 48,254	Balance - end of year	Balance - end of year
					$ 196,707 6,608 124,647 1,465 1,787 33,253 9,043 7,348 904 244,085 2,230 137,140 46,114 69,469 2,249 40,186 40,098 6,728 625 50,105 159,555 263,467 20,283 16,903 180,700 484,898 2,522 1,456 $ 2,150,575

Unit: NT$ Thousand

Remarks

• 145 -

Taiwan Fire & Marine Insurance Co., Ltd.

Calculation table for provision of special reserve (special reserve for material accidents and hazard changes)

From January 1 to December 31, 2021

Statement 14

Unit: NT$ Thousand

Insurance type One-year Residential Fire Insurance Long-term Residential Fire Insurance One-year Commercial General Fire Insurance Long-term Commercial General Fire Insurance Inland Marine Insurance Marine Cargo Insurance Marine Hull Insurance Fishing Vessel Insurance Aviation Insurance General Personal Automobile Physical Damage Insurance General Commercial Automobile Physical Damage Insurance General Personal Automobile Liability Insurance General Commercial Automobile Liability Insurance General Liability Insurance Professional Liability Insurance Engineering Insurance Nuclear Energy Insurance Bonding Insurance Credit Insurance Miscellaneous Insurance Personal Accident Insurance Commercial earthquake insurance Personal Comprehensive Insurance Commercial Comprehensive Insurance Typhoon and Flood Insurance Residential Earthquake Insurance One-year Health Insurance Overseas division business Total	Earned premium retained $ 332,723 7,347 195,055 584 4,590 56,125 4,668 6,893 1,728 991,244 29,163 1,565,838 216,362 115,835 3,735 89,363 6,675 7,356 1,512 1,865,173 423,871 62,707 36,440 21,613 52,402 70,033 1,369 766 $ 6,171,170	Expected claims Expected loss ratio Amount of expected claims 55.78% $ 185,593 55.50% 4,078 57.77% 112,683 54.50% 318 60.50% 2,777 58.50% 32,833 68.30% 3,189 69.30% 4,777 72.30% 1,250 69.16% 685,544 66.51% 19,396 70.81% 1,108,770 68.98% 149,247 71.09% 82,901 69.95% 2,612 59.30% 52,992 65.00% 4,339 71.91% 5,300 66.30% 1,003 66.30% 1,236,610 67.22% 300,836 64.66% 40,547 68.30% 24,888 65.30% 14,113 63.12% 33,076 85.00% - 64.72% 886 57.77%、72.30% 459 $ 4,111,017	Expected claims Expected loss ratio Amount of expected claims 55.78% $ 185,593 55.50% 4,078 57.77% 112,683 54.50% 318 60.50% 2,777 58.50% 32,833 68.30% 3,189 69.30% 4,777 72.30% 1,250 69.16% 685,544 66.51% 19,396 70.81% 1,108,770 68.98% 149,247 71.09% 82,901 69.95% 2,612 59.30% 52,992 65.00% 4,339 71.91% 5,300 66.30% 1,003 66.30% 1,236,610 67.22% 300,836 64.66% 40,547 68.30% 24,888 65.30% 14,113 63.12% 33,076 85.00% - 64.72% 886 57.77%、72.30% 459 $ 4,111,017	Retained claims $ 27,353 72 116,583 - 731 17,665 8,779 ( 740 ) 3,637 561,014 17,164 967,716 143,771 43,094 741 41,471 253 ( 65 ) ( 3,309 ) 1,797,733 179,351 2,196 ( 160 ) 6,890 7,304 - ( 476 ) ( 80,361) $ 3,858,407		Appropriation of special reserves in the year	Appropriation of special reserves in the year	Appropriation of special reserves in the year
					Reserve ratio 3% 1% 5% 5% 3% 5% 5% 5% 7% 1% 1% 1% 1% 1% 1% 5% - 3% 3% 3% 1%、3% 7% 1% 3% 7% - 3% 5%、7%	Allowance for reserve at specific ratio $ 9,982 73 9,753 29 138 2,806 233 345 121 9,912 292 15,658 2,164 1,158 37 4,468 - 221 45 55,955 6,392 4,390 364 648 3,668 - 41 41 $ 128,934	Allowance for reserve less than expected claims $ 23,736 602 - 48 307 2,275 1 828 - 18,680 334 21,158 821 5,972 281 1,728 3,338 804 647 24 18,222 28,763 3,757 1,083 19,328 70,034 204 12,123 $ 235,098	Effect of income tax ( $ 6,744 ) ( 135 ) ( 1,951 ) ( 15 ) ( 89 ) ( 1,016 ) ( 47 ) ( 235 ) ( 24 ) ( 5,718 ) ( 125 ) ( 7,363 ) ( 597 ) ( 1,426 ) ( 64 ) ( 1,239 ) ( 668 ) ( 205 ) ( 138 ) ( 11,196 ) ( 4,923 ) ( 6,631 ) ( 824 ) ( 346 ) ( 4,599 ) ( 14,007 ) ( 49 ) ( 2,433) ($ 72,807)		Total reserves
		Expected loss ratio 55.78% 55.50% 57.77% 54.50% 60.50% 58.50% 68.30% 69.30% 72.30% 69.16% 66.51% 70.81% 68.98% 71.09% 69.95% 59.30% 65.00% 71.91% 66.30% 66.30% 67.22% 64.66% 68.30% 65.30% 63.12% 85.00% 64.72% 57.77%、72.30%
										$ 26,974 540 7,802 62 356 4,065 187 938 97 22,874 501 29,453 2,388 5,704 254 4,957 2,670 820 554 44,783 19,691 26,522 3,297 1,385 18,397 56,027 196 9,731 $ 291,225

• 146 -

Unit: NT$ Thousand

Taiwan Fire & Marine Insurance Co., Ltd.

Calculation table for recovery of special reserves (special reserve for material accidents and hazard changes)

From January 1 to December 31, 2021

Statement 15

Insurance type One-year Residential Fire Insurance Long-term Residential Fire Insurance One-year Commercial General Fire Insurance Long-term Commercial General Fire Insurance Inland Marine Insurance Marine Cargo Insurance Marine Hull Insurance Fishing Vessel Insurance Aviation Insurance General Personal Automobile Physical Damage Insurance General Commercial Automobile Physical Damage Insurance General Personal Automobile Liability Insurance General Commercial Automobile Liability Insurance General Liability Insurance Professional Liability Insurance Engineering Insurance Nuclear Energy Insurance Bonding Insurance Credit Insurance Miscellaneous Insurance Personal Accident Insurance Commercial earthquake insurance Personal Comprehensive Insurance Commercial Comprehensive Insurance Typhoon and Flood Insurance Residential Earthquake Insurance One-year Health Insurance Overseas division business Total	Special reserve accumulated from the previous period $ 171,355 8,430 119,965 1,605 1,431 29,188 10,780 6,410 1,637 221,211 1,729 107,687 43,726 71,930 2,365 35,229 37,428 6,692 71 6,409 155,245 236,945 18,775 15,684 162,303 428,871 3,207 1,296 $ 1,907,604	Special reserve accumulated from the previous period plus the special reserve provided in the period $ 198,329 8,970 127,767 1,667 1,787 33,253 10,967 7,348 1,734 244,085 2,230 137,140 46,114 77,634 2,619 40,186 40,098 7,512 625 51,192 174,936 263,467 22,072 17,069 180,700 484,898 3,403 11,027 $ 2,198,829		Recovery of special reserve in the year	Recovery of special reserve in the year	Recovery of special reserve in the year	Total recovered amount $ 1,622 2,362 3,120 202 - - 1,924 - 830 - - - - 8,165 370 - - 784 - 1,087 15,381 - 1,789 166 - - 881 9,571 $ 48,254	Accumulated special reservesinthe year	Accumulated special reservesinthe year
			Recovered amount in excess of expected claims $ - - 3,900 - - - 2,405 - 1,038 - - - - - - - - - - 1,359 - - - - - - - - $ 8,702	Recovered amount in excess of retained earned premium $ 2,027 2,953 - 252 - - - - - - - - - 10,207 462 - - 980 - - 19,226 - 2,236 207 - - 1,101 11,964 $ 51,615	Recovered amount from special reserves for materialaccidents $ - - - - - - - - - - - - - - - - - - - - - - - - - - - - $ -	Effect of income tax ( $ 405 ) ( 591 ) ( 780 ) ( 50 ) - - ( 481 ) - ( 208 ) - - - - ( 2,042 ) ( 92 ) - - ( 196 ) - ( 272 ) ( 3,845 ) - ( 447 ) ( 41 ) - - ( 220 ) ( 2,393) ($ 12,063)
									$ 196,707 6,608 124,647 1,465 1,787 33,253 9,043 7,348 904 244,085 2,230 137,140 46,114 69,469 2,249 40,186 40,098 6,728 625 50,105 159,555 263,467 20,283 16,903 180,700 484,898 2,522 1,456 $ 2,150,575

• 147 -

Taiwan Fire & Marine Insurance Co., Ltd.

Statement of Lease liabilities

December 31, 2021

Statement 16 Unit: NT$ thousand, unless specified otherwise

Title Land Building Transport equipment	Summary Land Communicati on Division Company car	Term of lease 2010/6/1~2024/9/14 2015/3/29~2026/10/15 2018/4/30~2024/6/22	Discount rate 2.616% 2.366%~2.616% 2.366%~2.616%		Balance - ending
					$ 18,225 41,392 2,124 $ 61,741

• 148 -

Statement 17 Item Guarantee deposits received Temporary receipts Other liabilities - others (note)	Taiwan Fire & Marine Insurance Co., Ltd. Statement of Other liabilities December 31, 2021 Unit: NT$ Thousand Summary Amount Remarks Guarantee deposits for lease $ 31,843 38,098 963 $ 70,904	Taiwan Fire & Marine Insurance Co., Ltd. Statement of Other liabilities December 31, 2021 Unit: NT$ Thousand Summary Amount Remarks Guarantee deposits for lease $ 31,843 38,098 963 $ 70,904

Note: Cumulation of the balance of each items under 5% of the balance of this account.

• 149 -

Unit: NT$ thousand, unless specified otherwise

Taiwan Fire & Marine Insurance Co., Ltd. Statement of retained earned premium From January 1 to December 31, 2021

Statement 18

Insurance type One-year Residential General Fire Insurance Long-term Residential General Fire Insurance One-year Commercial General Fire Insurance Long-term Commercial General Fire Insurance Inland Marine Insurance Marine Cargo Insurance Marine Hull Insurance Fishing Vessel Insurance Aviation Insurance General Personal Automobile Physical Damage Insurance General Commercial Automobile Physical Damage Insurance General Personal Automobile Liability Insurance General Commercial Automobile Liability Insurance Compulsory Automobile Liability Insurance Compulsory Commercial Automobile Liability Insurance Compulsory Motorcycle Liability Insurance General Liability Insurance Professional Liability Insurance Engineering Insurance Nuclear Energy Insurance Bonding Insurance Credit Insurance Miscellaneous Insurance Personal Accident Insurance Commercial earthquake insurance Personal Comprehensive Insurance Commercial Comprehensive Insurance Typhoon and Flood Insurance Residential earthquake insurances as the government policy One-year Health Insurance Overseas division business	Premium revenues $ 339,076 ( 96) 486,955 - 6,315 175,918 39,927 57,007 56,703 1,040,421 29,105 1,626,133 229,298 449,308 70,672 267,033 260,380 17,265 187,589 - 12,257 2,175 1,971,103 426,190 150,403 36,802 31,152 114,017 614,473 2,320 - $ 8,699,901	Reinsurance premium revenues $ - - 41,870 - - 1,589 3,150 2,020 1,441 - - 184 - 137,959 25,425 95,762 3,548 209 27,279 6,328 1,141 - 231 3,455 19,952 - - 11,691 74,397 - 1,465 $ 459,096	Expenses for reinsurance $ - ( 13) 318,541 10 2,111 114,767 39,445 52,977 56,928 11,331 13 6,415 144 201,911 39,124 126,085 138,634 13,116 124,610 - 6,390 - 26,817 43,919 105,149 640 9,345 69,285 614,473 1,095 592 $ 2,123,854	Premium retained $ 339,076 ( 83) 210,284 ( 10) 4,204 62,740 3,632 6,050 1,216 1,029,090 29,092 1,619,902 229,154 385,356 56,973 236,710 125,294 4,358 90,258 6,328 7,008 2,175 1,944,517 385,726 65,206 36,162 21,807 56,423 74,397 1,225 873 $ 7,035,143	Method of appropriation Note10 Note 1 Note10 Note 1 Note 5 Note 5 Note 10 Note 10 Note 10 Note 10 Note 10 Note 10 Note 10 Note 3 Note 3 Note 3 Note 10, 11 Note 10 Note 6, 10 Note 4 Note 10, 12 Note 7 Note 10 Note 5, 8 & 10 Note 10 Note 10 Note 10 Note 10 Note 2 Note 10 Note 9	Net changes of unearned premium reserves $ 6,353 ( 7,430) 15,229 ( 594) ( 386) 6,615 ( 1,036) ( 843) ( 512) 37,846 ( 71 ) 54,064 12,792 1,299 1,869 1,764 16,463 623 895 ( 347) ( 348) 663 79,344 3,335 2,499 ( 278) 194 4,021 4,364 ( 144) 107 $ 238,350	Earned premium retained	Earned premium retained
								$ 332,723 7,347 195,055 584 4,590 56,125 4,668 6,893 1,728 991,244 29,163 1,565,838 216,362 384,057 55,104 234,946 108,831 3,735 89,363 6,675 7,356 1,512 1,865,173 382,391 62,707 36,440 21,613 52,402 70,033 1,369 766 $ 6,796,793

• 150 -

• Note 1: Long-term fire insurance is appropriated by the revised factor list approved by Jin-Tai-Cai-Bao-Zi No. 852363214

• Note 2: Residential earthquake insurances as a government policy is appropriated based on the requirement of the “Enforcement Rules for the Risk Spreading Mechanism of Residential Earthquake Insurance” issued by Jin-Guan-Bao-Chan-Zi No. 11004907971 on March 12, 2021.

• Note 3: Compulsory automobile/Motorcycle Liability Insurances is deposited based on Order Jin-Guan-Bao-Chan-Zi No. 10202530301, and appropriated based on Order Jin-Guan-Bao-Chan-Zi No. 11004107772. Note 4: Nuclear insurance is appropriated based on Letter Jin-Guan-Bao-Cai-Zi No. 10102517091 on December 28, 2012.

• Note 5: Goods transportation insurance and the travel comprehensive insurance under the casualty insurance are appropriated based on the premiums of written valid policies by the average day assumption. Note 6: Engineering insurance assumes the risks increase proportionally with time.

• Note 7: Credit insurance is appropriated by the specified ration filed to the MOF in the “consumer credit loan insurance” in September 2001 and the “financial institutions’ micro credit loan insurance” in August 2005 by the Non-Life Insurance Association.

• Note 8: In terms casualty insurance, the group insurance products are appropriated based on the method in Note 10 and the premium basis specified in Letter Jin-Guan-Bao-Cai-Zi No. 11004925801 on June 29, 2021.

• Note 9: Based on Article 6, the “Regulations Governing Various Reserves of Insurance Enterprises” in Jin-Guan-Bao-Cai-Zi No. 10102501561, the preparation of premium reserves for the overseas reinsurance division business is appropriated based on the nature of the insurance by the actuarial personnel. The Company applies the one-eighth appropriation.

• Note 10: Based on Article 6, the “Regulations Governing Various Reserves of Insurance Enterprises” in Jin-Guan-Bao-Cai-Zi No. 10102501561, the preparation of premium reserves for the other insurance is appropriated based on the nature of the insurance by the actuarial personnel. The Company applies the one-twenty-fourth appropriation. This has been approved for reference with MOF Letter Tai-Cai-BaoZi No. 0920714471 on January 6, 2004.

• Note 11: Liability insurance for travel agencies in the general liability insurance is appropriated based on Letter Jin-Guan-Bao-Er-Zi No. 09402075951 of the Financial Supervisory Commission, Executive Yuan.

• Note 12: Performance bonding insurance for travel agencies in the bonding insurance is appropriated based on Letter Jin-Guan-Bao-Er-Zi No. 09402075952 of the Financial Supervisory Commission, Executive Yuan.

• 151 -

		Taiwan Fire & Marine Insurance Co., Ltd.	Taiwan Fire & Marine Insurance Co., Ltd.	Taiwan Fire & Marine Insurance Co., Ltd.
		Statement of Interest income
		December 31, 2021
Statement	19		Unit:	NT$ thousand,	unless specified
					otherwise
	Title	Summary	Amount		Remarks
Bank deposits and interest			$	13,796
Government bond interest				9,343
Financial bond interest				41,787
Corporate	bond interest			40,369
Others (Note)				2,200
Total			$ 107,495

Note: Each balance is less than 5% of that under this title.

• 152 -

Taiwan Fire & Marine Insurance Co., Ltd. Statement of share of profit of associates and joint ventures accounted for using equity

method

From January 1 to December 31, 2021

Statement 20

Unit: NT$ Thousand

Investment portfolio Associates: Top Taiwan X Venture Capital Co., Ltd.		Amount $ 25,718	Remarks

• 153 -

	Taiwan Fire & Marine Insurance Co., Ltd.	Taiwan Fire & Marine Insurance Co., Ltd.
	Exchange gain (loss) – Investment Statement
	From January 1 to December 31,	2021
Statement 21			Unit: NT$ Thousand
Item	Summary	Amount	Remarks
Liability instruments	($	17,620)
Others (Note)		404
	($	17,216)

Note: Each balance is less than 5% of that under this title.

• 154 -

Taiwan Fire & Marine Insurance Co., Ltd.

Statement of Other Operating Revenues and Costs

From January 1 to December 31, 2021

Unit: NT$ Thousand

Statement 22 Item Cost Special compensation fund Expenditure from Guaranty Funds Exchange losses – Non- investment Others (Note)		Amount $ 22,582 17,524 9,982 2,867 $ 52,955	Unit: NT$ Thousand Remarks

Note: Each balance is less than 5% of that under this title.

• 155 -

Taiwan Fire & Marine Insurance Co., Ltd.

Detailed list of retained claims

From January 1 to December 31, 2021

Unit: NT$ Thousand

Statement 23 Title One-year Residential General Fire Insurance Long-term Residential General Fire Insurance One-year Commercial General Fire Insurance Inland Marine Insurance Marine Cargo Insurance Marine Hull Insurance Fishing Vessel Insurance Aviation Insurance General Personal Automobile Physical Damage Insurance General Commercial Automobile Physical Damage Insurance General Personal Automobile Liability Insurance General Commercial Automobile Liability Insurance Compulsory Automobile Liability Insurance Compulsory Commercial Automobile Liability Insurance Compulsory Motorcycle Liability Insurance General Liability Insurance Professional Liability Insurance Engineering Insurance Nuclear Energy Insurance Bonding Insurance Credit Insurance Miscellaneous Insurance Personal Accident Insurance Commercial earthquake insurance Personal Comprehensive Insurance Commercial Comprehensive Insurance Typhoon and Flood Insurance One-year Health Insurance Overseas division business	Claims (including the claim expenses) $ 34,387 230 70,724 1,427 122,576 28,868 6,050 3,074 572,805 23,291 931,671 134,737 355,825 58,543 144,626 70,862 433 68,024 - 11,673 ( 3,303 ) 1,737,258 189,285 410 345 6,970 1,137 1 - $ 4,571,929		Claims for reinsurance $ - - 8,377 - 28 5,409 606 2,888 - - 285 - 117,389 20,389 122,619 1,940 - 11,099 3 982 6 ) 182 1,065 4 - - 207 - 199 $ 293,665		U Refundable Claims for Reinsurance $ - 11 61,336 699 99,206 23,378 5,799 2,684 15,018 - 812 - 212,431 35,133 84,502 33,330 216 44,875 - 9,817 - 14,177 20,530 132 - 2,091 890 - - $ 667,067	nit: NT$ Thousand Retained claims
	(	(				(	$ 34,387 219 17,765 728 23,398 10,899 857 3,278 557,787 23,291 931,144 134,737 260,783 43,799 182,743 39,472 217 34,248 3 2,838 3,309 ) 1,723,263 169,820 282 345 4,879 454 1 199 $ 4,198,527

• 156 -

Taiwan Fire & Marine Insurance Co., Ltd.

Statement of Service expenses

From January 1 to December 31, 2021

Statement 24 Unit: NT$ Thousand

Item Salary Taxation Insurance premium Postage Other expenses (Note)	Summary		Amount $ 394,738 172,801 49,309 45,270 226,519 $ 888,637	Remarks

Note: Expense categories less than 5% of the total are stated collectively.

• 157 -

Taiwan Fire & Marine Insurance Co., Ltd. Statement of Administrative Expenses From January 1 to December 31, 2021

Statement 25

Unit: NT$ Thousand

Item Salary Service fees Advertisement expense Insurance premium Entertainment allowance Other expenses (Note)	Summary		Amount $ 209,789 32,641 31,565 21,712 20,639 75,236 $ 391,582	Remarks

Note: Expense categories less than 5% of the total are stated collectively.

• 158 -

Taiwan Fire & Marine Insurance Co., Ltd. Statement of Non-operating income and expenses From January 1 to December 31, 2021

Unit: NT$ Thousand

Statement 26 Item Interest expense Fine Others (Note)	Summary	Unit: NT$ Thousand Amount Remarks ($ 1,621 ) ( 1,810 ) ( 425) ($ 3,856)

Note: Cumulation of the balance of each items under 5% of the balance of this account.

• 159 -

Taiwan Fire & Marine Insurance Co., Ltd.

Other disclosures in the Financial Report and ICPA’s Review Report 2021

• 160 -

Taiwan Fire & Marine Insurance Co., Ltd.

The CPA review report to other disclosures in the financial reports

To Taiwan Fire & Marine Insurance Co., Ltd.:

For the financial statements of Taiwan Fire & Marine Insurance Co., Ltd. for Year 2021, the CPAs have audited the statements based on the Rules Governing the Audit of Financial Statements by Certified Public Accountants and generally accepted auditing rules while performing the audit. The CPAs have released the audit report on March 18, 2022. The purpose of this CPA audit is to express the opinions to the financial statements as a whole. Attached please also find the other disclosures in the Financial Report for Year 2021, prepared by Taiwan Fire & Marine Insurance Co., Ltd. The document is prepared based on the “Regulations Governing the Preparation of Financial Reports by Insurance Enterprises” separately, and has been reviewed by the CPAs based on the “Principles for Reviewing Other disclosures in Financial Reports.”

Based on the opinions of the CPAs, the “other disclosures” in the Financial Report for Year 2021, prepared by Taiwan Fire & Marine Insurance Co., Ltd. has disclosed the related information based on the “Regulations Governing the Preparation of Financial Reports by Insurance Enterprises”; the contents of the financial information is consistent to the financial statements, and thus there is no need to make materially revisions.

Deloitte & Touche CPA: Wang-Sheng Lin CPA: Wen-Ya Hsu

March 18, 2022

• 161 -

Taiwan Fire & Marine Insurance Co., Ltd. “Other disclosures” in the Financial Report

One. Description of Business

• I. Matters impacting the business of the Company significantly in the last five year

• (I) Acquisition or merge with other companies: None. (II) Split: None.

• (III) Major rights of operation (equity) change for 10% or more: None.

• (IV) Transfer of business: None.

• (V) Reinvestment the affiliated companies:

Unit: thousand shares, NT$ thousand

Reinvested company		2017	2018	2019	2020	2021
Top Taiwan X Venture Capital Co.,Ltd.	Sharesheld	19,800	19,800	19,800	19,800	19,800
	Carrying amount	185,804	177,649	217,939	242,485	264,896
	% ofOwnership	24.75%	24.75%	24.75%	24.75%	24.75%

• (VI) Restructure: None.

• (VII) Acquisition or disposition of material assets:

• Acquisition of material assets: None.

• Disposition of material assets:

Unit: NT$ Thousand

Year	Name of Assets	Buyer	Book Value	Selling Price	Gain (loss) on disposal (Note)	Decision Maker
2021	Land No. 769, Small Section 3, Xinglung Section, Wenshan District, Taipei City	O-Ming Wang and O- Hsiao Wang	17,609	21,297	3,688	Board of Directors
2020	Land No. 769 & 769-1, Small Section 3, Xinglung Section, Wenshan District, Taipei City	Mr. Wu etc.	51,550	60,430	8,880	Board of Directors
2020	Land No. 827, Small Section 1, Zhongshan Section, Zhongshan District, Taipei City	O-CHIN Lin	56,583	79,909	23,326	Board of Directors
2017	Land No. 827, Small Section 1, Zhongshan Section, Zhongshan District,TaipeiCity	3D Technologies, Co., Ltd.	79,441	125,244	45,803	Board of Directors

Note: The gain (loss) on disposal is the amount of selling price deducting the

book value (gross amount before deducting land value added tax), land value added tax, and the related expenses.

• 162 -

• (VIII) Material changes of operational manner (including the marketing system) or the nature of business:

The Company engages the sales of various insurance and operates the related business. There are no material changes regarding the operational manner or the nature of business in the past five years.

• 163 -

II. Remuneration to the general directors, independent directors, supervisors, presidents and vice presidents, and related information

• (I) Remuneration to the general directors, independent directors, supervisors, presidents and vice presidents

1. Remuneration to the general directors and independent directors

																Unit: NT$ thousand, unless specifi	Unit: NT$ thousand, unless specifi	Unit: NT$ thousand, unless specifi	Unit: NT$ thousand, unless specifi	Unit: NT$ thousand, unless specifi	Unit: NT$ thousand, unless specifi	ed otherwise
Title	Name (Note 1)	Remuneration to directors								Sum of A, B, C, and D & percentage of net income (%)		Remuneration from concurr				entlyservings as employees				Sum of A, B, C, D, E, F, and G & percentage of net income(%)		Remunerati on from investees other than subsidiaries, or parent company
		Wages (A)		Pension upon retirement (B)		Directors’ remuneration (C)		Service Expenses (D)				Salary, bonuses, and special allowances,etc.(E)		Pension upon retirement (F)		Employee Compensation (G)
		The Company	All companies included into the consolidated financial statements	The Company	All companies included into the consolidated financial statements	The Company	All companies included into the consolidated financial statements	The Company	All companies included into the consolidated financial statements	The Company	All companies included into the consolidated financial statements	The Company	All companies included into the consolidated financial statements	The Company	All companies included into the consolidated financial statements	The Company		All companies included into the consolidated financial statements		The Company	All companies included into the consolidated financial statements
																Cash	Stock	Cash	Stock
Director	Yong-Shin Development Co., Ltd.	9,778	9,778	-	-	10,955	10,955	610	610	21,343 5.72%	21,343 5.72%	-	-	-	-	-	-	-	-	21,343 5.72%	21,343 5.72%	None
Director	Bank of Taiwan Co., Ltd.																					None
Chairman	Steve Lee																					None
Vice Chairman	Representative of Yong-Shin Development Co., Ltd.: Charles Sung (Note 3)																					None
Director	Representative of Yong-Shin Development Co., Ltd.: Chung- Chou Chang																					None
Director	Representative of Yong-Shin Development Co., Ltd.: Chain- Cheng Lee																					None
Director	Representative of Yong-Shin Development Co., Ltd.: Bin-Fu Chen																					None
Director	Representative of Bank of Taiwan Co., Ltd.: Mei-Ling, Wu																					None
Director	Representative of Bank of Taiwan Co., Ltd.: Tze-Yue, Chen																					None
Director	Bank of Taiwan Co., Ltd. Representative: Wen-Chang Chen (Note 4)																					None
Director	Bank of Taiwan Co., Ltd. Representative: Su-Ju Hsu (Note 5, 6)																					None
Director	Bank of Taiwan Co., Ltd. Representative: Hsin-Tzu Hu (Note 7)																					None
Independent Director	Jimmy T. Hsieh	5,400	5,400	-	-	-	-	630	630	6,030 1.62%	6,030 1.62%	-	-	-	-	-	-	-	-	6,030 1.62%	6,030 1.62%	None
Independent Director	Cheng Ching Huang																					None
Independent Director	Nien-Tsu Chiang																					None
For the remuneration to the Company's indep Company's operating results, and their contributio personal performance achievement rate and contri of business and related laws,in order to balance th		endent directors, Article 35-1 of the Articles of Incorporation provides that “If the Company sees a profit in the year, it shall contribute 1%~5% of the same as n to the Company, and based on the standard prevailing in the same trade. The remuneration shall be defined in accordance with the Company's regulations go bution to the Company will also be taken into account. The related performance assessment and reasonableness of salary and remuneration are already review e Company's sustainabilityand risk control.										the remuneration to employees, and no more than 5% to the d verning performance assessment on directors. In addition to t ed and approved by Remuneration Committee and Board of D				irectors (independent directors)...”, and the reasonable remuneration shall be given subject to he Company's entire operating results, the future business risk and development trend for the i irectors. Meanwhile, the remuneration system will be reviewed from time to time subject to th						the ndustry, the e overview

Note: In 2021, the total amount of the compensations to drivers is NT$2,064 thousand.

• 164 -

Breakdown of remuneration to directors (NT$)		Dire	ctors
	Sum of foregoing fo	ur items (A+B+C+D)	Sum of foregoing seven it	ems (A+B+C+D+E+F+G)
	The Company	All companies included into the consolidated financial statements	The Company	All companies included into the consolidated financial statements
Below 1,000,000	Representative of Yong-Shin Development Co., Ltd.: Chung-Chou Chang, Bin-Fu Chen, Chain- Cheng Lee Representative of Bank of Taiwan Co., Ltd.: Mei-Ling, Wu, Wen-Chang Chen, Tze-Yue, Chen, Su-JuHsu,Hsin-TzuHu	Representative of Yong-Shin Development Co., Ltd.: Chung-Chou Chang, Bin-Fu Chen, Chain- Cheng Lee Representative of Bank of Taiwan Co., Ltd.: Mei-Ling, Wu, Wen-Chang Chen, Tze-Yue, Chen, Su-JuHsu,Hsin-TzuHu	Representative of Yong-Shin Development Co., Ltd.: Chung-Chou Chang, Bin-Fu Chen, Chain-Cheng Lee Representative of Bank of Taiwan Co., Ltd.: Mei-Ling, Wu, Wen-Chang Chen, Tze-Yue, Chen, Su-JuHsu,Hsin-TzuHu	Representative of Yong-Shin Development Co., Ltd.: Chung-Chou Chang, Bin-Fu Chen, Chain-Cheng Lee Representative of Bank of Taiwan Co., Ltd.: Mei-Ling, Wu, Wen-Chang Chen, Tze-Yue, Chen, Su-JuHsu,Hsin-TzuHu
1,000,000(inclusive)~ 2,000,000(exclusive)	Independent Director: JimmyT. Hsieh	Independent Director: JimmyT. Hsieh	Independent Director: JimmyT. Hsieh	Independent Director: JimmyT. Hsieh
2,000,000 (inclusive) ~ 3,500,000 (exclusive)	Representative of Yong-Shin Development Co., Ltd.: Charles Sung Bank of Taiwan Co., Ltd. Independent Director: Cheng Ching Huang, Nien-Tsu Chiang	Representative of Yong-Shin Development Co., Ltd.: Charles Sung Bank of Taiwan Co., Ltd. Independent Director: Cheng Ching Huang, Nien-Tsu Chiang	Representative of Yong-Shin Development Co., Ltd.: Charles Sung Bank of Taiwan Co., Ltd. Independent Director: Cheng Ching Huang, Nien-Tsu Chiang	Representative of Yong-Shin Development Co., Ltd.: Charles Sung Bank of Taiwan Co., Ltd. Independent Director: Cheng Ching Huang, Nien-Tsu Chiang
3,500,000 (inclusive)~5,000,000 (exclusive)	Yong-Shin Development Co., Ltd.	Yong-Shin Development Co., Ltd.	Yong-Shin Development Co., Ltd.	Yong-Shin Development Co., Ltd.
5,000,000(inclusive)~ 10,000,000(exclusive)	SteveLee	SteveLee	SteveLee	SteveLee
10,000,000 (inclusive)~15,000,000 (exclusive)	-	-	-	-
15,000,000 (inclusive)~30,000,000 (exclusive)	-	-	-	-
30,000,000 (inclusive)~50,000,000 (exclusive)	-	-	-	-
50,000,000 (inclusive)~100,000,000 (exclusive)	-	-	-	-
Over 100,000,000	-	-	-	-
Total	15	15	15	15

Note 1: All the companies indicated in the columns of the consolidated statements refer to each remuneration paid to the directors from all companies and the names at each interval. Note 2: Each payment is disclosed collectively in the table above.

Note 3: Office taken newly on January 1, 2021. Note 4: Dismissed on January 16, 2021. Note 5: Office taken newly on January 25, 2021. Note 6: Dismissed on August 9, 2021. Note 7: Office taken newly on October 22, 2021.

2. Remuneration to Supervisor (None)

• 165 -

3. Remuneration to President, and Vice President

Unit: NT$ thousand, unless specified otherwise

Title	Name	Salary （A）	Salary （A）	Pension upon retirement （B）	Pension upon retirement （B）	Bonuses and special allowances （C）	Bonuses and special allowances （C）	Employee Compensation （D）	Employee Compensation （D）	Employee Compensation （D）	Employee Compensation （D）	Sum of A, B, C, and D & percentage of net income (%)	Sum of A, B, C, and D & percentage of net income (%)	Remuneration from investees other than subsidiaries, or parent company
		The Company	All companies included into the consolidated financial statements	The Company	All companies included into the consolidated financial statements	The Company	All companies included into the consolidated financial statements	The Company		All companies included into the consolidated financialstatements		The Company	All companies included into the consolidated financial statements
								Cash	Stock	Cash	Stock
President	Chao-Feng Chen (Note2)	14,531	14,531	429	429	5,770	5,770	334	-	334	-	21,064 5.64%	21,064 5.64%	None
VicePresident	Nicholas N.C. Sheu													None
General Auditor	Su-Chen Lin													None
Chief compliance officer of the head office serving as the AML/CFT compliance officer concurrently	Hsien-Chang Huang (Note 3)													None
VicePresident	AndrewHsieh													None
VicePresident	AllenCheng													None
Vice President	Chia-Lin Sheu													None
Chief compliance officer of the head office serving as the AML/CFT compliance officer concurrently	Tsui-Jung Chen (Note 4)													None

Note: In 2021, the total amount of the compensations to drivers is NT$621 thousand.

Breakdown of remuneration to President and Senior Vice Presidents (NT$)	President and Seni	orVicePresidents
	The Company	All companies included into the consolidated financial statements
Below1,000,000	-	-
1,000,000 (inclusive)~ 2,000,000 (exclusive)	Su-Chen Lin,Hsien-ChangHuang	Su-Chen Lin,Hsien-ChangHuang
2,000,000 (inclusive) ~ 3,500,000 (exclusive)	Nicholas N.C. Sheu, Andrew Hsieh, Allen Cheng, Chia-Lin Sheu, Tsui- Jung Chen	Nicholas N.C. Sheu,Andrew Hsieh, Allen Cheng, Chia-Lin Sheu, Tsui- Jung Chen
3,500,000(inclusive)~ 5,000,000(exclusive)	-	-
5,000,000 (inclusive)~ 10,000,000 (exclusive)	Chao-Feng Chen	Chao-Feng Chen
10,000,000 (inclusive)~ 15,000,000 (exclusive)	-	-
15,000,000 (inclusive)~30,000,000 (exclusive)	-	-
30,000,000(inclusive)~ 50,000,000(exclusive)	-	-
50,000,000 (inclusive)~ 100,000,000 (exclusive)	-	-
Over 100,000,000	-	-
Total	8	8

Note 1: All the companies indicated in the columns of the consolidated statements refer to each remuneration paid to the president and senior vice president from all companies and the names at each interval. Note 2: Office taken newly on January 1, 2021.

Note 3: Dismissed on June 30, 2021.

Note 4: The Chief Compliance Officer of the head office serving as the AML/CFT compliance officer concurrently on August 5, 2021.

• 166 -

• Managers receiving employee compensation and state of distribution

December 31, 2021

Item	Title	Name	Stock	Cash	Total	The sum and percentage of net income (%)
Managers	President	Chao-Feng Chen	-	1,419	1,419	1,419 0.38%
	Vice President serving as the chief corporate governance officer concurrently	Nicholas N.C. Sheu
	General Auditor	Su-Chen Lin
	Vice President	Chia-Lin Sheu
	Chief compliance officer of the head office serving as the AML/CFT compliance officer concurrently	Tsui-Jung Chen
	Vice President	Andrew Hsieh
	Vice President	Allen Cheng
	Senior Assistant Vice President	Chih-Chieh Huang
	Assistant Vice President	Hsin-Chu Lin
	Assistant Vice President	Jack Chung
	Assistant Vice President	Yuan-Yi Liao
	Assistant Vice President	Hong-Hsing Chuang (Note1)
	Assistant Vice President	Steven Lin (Note1)
	Assistant Vice President	Wen-Chin Chu (Note2)
	Senior Manager	Stanley Fang
	Senior Manager	Yung-Fu Su
	Senior Manager	Jih-Min Chan
	Senior Manager	Kent Lee
	Senior Manager	Chih-Hung Wang
	Senior Manager	Yu-Jen Hsiao
	Senior Manager	Stanley Chao
	Senior Manager	Chyi-Shyang Chio
	Senior Manager	Jonathan Tu
	Senior Manager	Ming-Fang Rao
	Senior Manager	Chin-Ho Lin (Note 3)
	Manager	Chih-Hui Hsu
	Manager	Nan-Chou Liu
	Manager	Yi-Yen Liao (Note4)
	Manager	Yi-Ping Wang
	Manager	Wun-Bin, Hou
	Manager	Chiu-Shan Chung
	Manager	Wen-Chih Su
	Manager	Pen-Chi Yu
	Manager	Shang-Jen Tung (Note 5)
	Chief of accountant	Pi-Chen Wang

Note 1: The Assistant Vice President took office on February 1, 2021.

Note 2: Office taken newly on August 5, 2021. Note 3: The Senior Manager took office on February 1, 2021. Note 4: Dismissed on January 28, 2022. Note 5: The Manager took office on February 1, 2021.

• (II) Any of the Chairman, President, Managers in charge of financial or accounting affairs

working in the firm where the CPAs certifying work or its affiliates within the most recent year: None.

• 167 -

(III) Information about Chairmen and presidents rehired as consultant after retiring

Title	Name	Positionbeforeretirement	Positionbeforeretirement	Date to be rehired as consultant	Purpose of hiring	Responsibility and authority segmentation	Remuneration (Note 1)	The share in the remuneration in the net profit after tax (Note1,2)
		Institution and title	Date of retirement
Senior Consultant	Hung-Pin Yang	President of Taiwan Fire & Marine Insurance Co., Ltd.	2010/4/12	2014/6/7	Property insurance business development consultation	Consultant	$ -	-

Note 1: Should there be the situation indicated in Item 1-2, Subparagraph 2, Article 20 in any insurance enterprise, the remuneration of each consultant shall be disclosed; other remunerations and their shares in the remuneration in the net profit after taxes may be disclosed collectively. Note 2: Net profit after tax refers to the net profit after tax of individual entity or in individual financial report in the latest year.

• 168 -

• III. Information of Relations between laborers and employer

• (I) The current employee benefit measures and the implementation:

• Employee benefit measures

The Company has established the Employee Benefits Committee based on the guidelines of employee benefits/welfare subsidy. Periodical meetings are convened to improve the benefits of employees, and each benefit measure is planned as a part of a whole to promote the life quality of employees. Each benefit measure is described as the following:

• (1) Benefit subsidies: bonus for three major holidays; gift allowance for birthday and wedding, and consolation money for funeral.

• (2) Culture and entertainment: birthday parties, year-end party and lotteries, club events, and outings.

• (3) Other subsidies: relief for emergency, group insurance, group insurance for immediate family members, and health check for employees.

In 2021, except the bonus of three major holidays and gift allowance for wedding of the employees, numerous clubs were established based on the guidance for club subsidies, to encourage employees to participate in recreations and improve the interaction among employees. Meanwhile, taking considerations of the efforts made in the daily course, and to promote the welfare of the employees, the health check was provided to all employees; group insurance is also provided to each employee, including life insurance, casualty insurance, health insurance, cancer insurance among other things, to serve as the safety protection for the employees.

1. Training and Education

To encourage employees to further enhance their knowledge regarding insurance operations and related professional knowledge, the Company has establish the awarding guidance for the professional insurance certificates. Generous awards and assistance are provided to encourage employees to obtain various professional permits and certificates while working, thus actively cultivating insurance professionals. Meanwhile, to enhance the professional literacy of insurance, the Company selects outstanding employees as the internal instructors for periodical educational training, focusing the jobs needed for insurance operations, for the purpose of interaction and legacy of the experiences. In addition, the external

• 169 -

professional course may be taken for the needs of development for business and personal career, to capture the market know-how.

The annual training of the Company integrates the internal trainings, trainings from external institutions and internal trainings within each department, and four major functions including “operation functions, core business, sales and marketing, and administration and resources” are the focuses. Trainings for different functions and levels are provided based on the performance and tasks-orientations. In total, the average training hours (both internal and external) for each one per month is 58.31 hours, or total 57,845 hours; total sessions provided are 673; 30,864 attendees in total, and the training expenses is NT$3,710 thousand in 2021.

1. Pension system

To take care the retired employees, as well as to promote the cooperation between the employer and the employees, the pension system is established. Also, to accommodate the enforcement of the Labor Pension Act from July 1, 2005, the pensions are contributed periodically to the personal pension account of each employee under the new scheme. Based on the No. 19 rule of the IAS, actuaries are delegated to assess and calculate for such pension reserves with actuarial reports. Such reports are the key reference for the adjustment to the ratio of pension reserve contributions for the purpose of guarding the interest of the retired employees.

For 2021, the pension reserves contributed for the old scheme to the Trust Department, Bank of Taiwan was NT$2,660 thousand, and the cumulative amount of the pension in that account by the end of year was NT$54,843 thousand. For the employees under new scheme, 6% of their monthly wages are contributed to their personal accounts in the Labor Insurance Bureau. In 2021, total contributions to the new labor pension was NT$31,061 thousand, which shall be able to guard the retired employees adequately.

1. Other key negotiation between the employer and the employees: compliant with the laws and regulations.

2. (II) Losses resulted from the disputes between the employer and the employees in the last years: None.

3. (III) Breaches to the Labor Standards Act found in the labor inspection in the last 3 years:

4. 170 -

Punishment	Deficiencies	Improvement
Fined NT$100,000	The official letter under Bei-Si-Lao-Dong-Zi No. 11060568502 dated March 24, 2021 alleged that the Company’s employees worked overtime and against the policy requiring at least one day off every seven days and, therefore, the Company was held violating Paragraph 2 of Article 32 and Paragraph 2 of Article 36 of the Labor Standard Act.	The Company’s sales has soared as a result of the hot sale of epidemic prevention policies, which is considered a single contingency. The Company has increased the human resource to deal with the situation. For the time being, the Company is held complying with the laws and regulations.

• IV. Information Security Management

• (I) The information security management framework, information security policy, specific management policy, and resources invested in the information security management:

The Company’s information security regulations follow the “Self-Regulated Information Security Protection Regulations for Insurance Industry” authorized by the competent authority to execute the information security protection operations. The Company also passed the BSI certification and also ISO 27001 information security management certificate. The Company continued the verification and confirmed the on-going validity of the certificate in Q4 of 2021, so as to ensure that the Company’s information security operations satisfy international norms. Also, the Company engaged in various EDR/Antivirus and Firewall installations, prevention of hackers’ cyberattacks and worked with ISP to help the DDoS to ensure the information security of the Company’s customers.

• (II) Losses resulting from major information security incidents: None.

• (III) Effect to the Company’s business and finance posed by the information security risk, and countermeasures:

The Company has implemented ISO 27001 information security management system. It conducts the information security assessment in accordance with ISO 27001 to fix vulnerabilities on a yearly basis, and also reports on the

• 171 -

information security operations to the Board of Directors as required on a yearly basis.

• V. Changes of President, Chief Auditor, and Appointed Actuaries in the last 2 years

	2021	2020
President	Chao-Feng Chen	Charles Sung
Chief Auditor	Su-Chen Lin	Su-Chen Lin
Appointed Actuary	Chin-Ho Lin	Chin-Ho Lin

• VI. The Changes of the Appropriation of Each Reserves

For the appropriation of each reserves in the year, the amendment to the “Regulations Governing the Preparation of Financial Reports by Insurance Enterprises” issued with the FSC Order Jin-Guan-Bao-Cai-Zi No. 11104904971 and the amendment to the “Regulations Governing Various Reserves of Insurance Enterprises” in Order Jin-Guan-Bao-Cai-Zi No. 10102501561 are complied with, and the appointed actuaries are hired to certify each reserves.

• VII. The insurance enterprise had capital increase/decrease resolved by the general meeting, or the issuance of new shares resolved by the Board of Directors, but such applications (filings) were not approved (or approved to be a reference) by the Financial Supervisory Commission, or the application for changing the registered capital was not approved by the MOEA, in the most recent year: None.

• VIII. The analysis to the claim expenses, refunded reinsurance, and the impact to the finance for these claims over NT$20 million in the last 3 years:

2021 :

Unit: NT$ Thousand

Insurance type	No. of Claim	Date when losses occurred	Amount of claim	Amount of refund	Retained claims	Financial impact (loss)
One-year Commercial Fire Insurance	001007A00045	2018.04.28	22,177	22,177	-	-
Cargo Insurance	662009C00417	2020.03.03	48,176	37,132	11,044	11,044

Note: The aforementioned list of the material claims only lists the claims actually paid in the year.

• 172 -

2020 :

Unit: NT$ Thousand

Insurance type	No. of Claim	Date when losses occurred	Amount of claim	Amount of refund	Retained claims	Financial impact (loss)
One-year Commercial Fire Insurance	001009A00021	2020.01.05	21,144	14,801	6,343	6,343
One-year Commercial Fire Insurance	001007A00042	2018.04.16	42,162	41,407	755	755
One-year Commercial Fire Insurance	001009000007	2020.03.08	49,583	39,171	10,412	10,412
Fishing Vessel Insurance	163608C00007	2019.08.01	45,668	43,613	2,055	2,055
Fishing Vessel Insurance	163608C00008	2019.10.31	52,224	49,404	2,820	2,820
Marine Hull Insurance	663108C00010	2019.08.14	28,071	24,018	4,053	4,053

Note: The aforementioned list of the material claims only lists the claims actually paid

in the year.

2019 :

Unit: NT$ Thousand

Insurance type	No. of Claim	Date when losses occurred	Amount of claim	Amount of refund	Retained claims	Financial impact (loss)
One-year Commercial Fire Insurance	001007A00042	2018.04.16	21,000	20,624	376	376

Note: The aforementioned list of the material claims only lists the claims actually paid in the year.

IX. Names of reinsurance companies whose reinsurance expenses took 1% or more of the

total premium incomes, and their credit ratings, in the most recent year

Name of Reinsurance Company	Rating agency	Rating
Central Reinsurance Corporation	S&P	A
Swiss Re Asia Pte. Ltd. Hong Kong Branch	S&P	AA-
Partner Reinsurance Europe SE Hong Kong Branch	S&P	A+

• 173 -

X. If any rating agency is delegated, the name of the rating agency, rating date and the rating results.

ults.
Rating agency	Rating date	Rating results
Standard & Poor’s Rating	2021/12/15	A-
Taiwan Ratings Corp.	2021/12/15	tw AA

• Two. Market Price, Dividend, and Equity Distribution

• I. Market price, net value, earning and dividend per share

Item	Year	Year	2021	2020
Market price per share	Highest (NT$)		24.2	21.00
	Lowest (NT$)		19.5	16.20
	Average (NT$)		20.62	19.86
Net worth pershare	Before distribution (NT$)		28.11	26.45
	After distribution (NT$)		27.36	25.35
Earnings Per Share (EPS)	Weighted average number of shares (thousand shares)		362,200	362,200
	EPS (NT$)		1.03	1.90
Dividends per share	Cash dividend (NT$)		0.75	1.1
	Stock dividends	Out of earnings (NT$)	-	-
		Out of additional paid-in capital (NT$)	-	-
	Accumulated, unpaid dividends (NT$)		-	-
ROI analysis	P/E ratio (Note 1) (multiple)		20.02	10.45
	P/D ratio (Note 2)		27.49	18.05
	Cash dividend yield (Note 3) (%)		3.64	5.54

Note 1: P/E ratio = Average closing price per share for the year / Earnings per share.

Note 2: P/D ratio = Average closing price per share during the current fiscal year / Cash dividend per share.

Note 3: Cash dividend yield = Cash dividend per share / Average closing price per share for the current year.

• 174 -

II. Distribution of equity

(I) Common Stock: Face value $10 per share

Common Stock Face value $10 per share

		December 31, 2021	December 31, 2021
Shareholding category	Number of shareholders	Shares held	Equity (%)
1～ 999 1,000～ 5,000 5,001～ 10,000 10,001～ 15,000 15,001～ 20,000 20,001～ 30,000 30,001～ 40,000 40,001～ 50,000 50,001～ 100,000 100,001～ 200,000 200,001～ 400,000 400,001～ 600,000 600,001～ 800,000 800,001～ 1,000,000 Over 1,000,001 (Note)	19,762 6,952 1,472 656 352 347 185 119 243 125 66 17 6 4 31	735,570 15,292,853 11,685,173 8,257,418 6,494,681 8,840,796 6,544,207 5,556,369 17,531,234 17,362,892 17,834,352 8,019,346 4,140,721 3,706,743 230,198,045	0.20 4.22 3.23 2.28 1.79 2.44 1.81 1.54 4.84 4.79 4.92 2.22 1.14 1.02 63.56
Total	30,337	362,200,400	100.00

Note: including the depository accounts.

(II) Preferred Shares: no preferred share is issued by the Company.

• 175 -

III. Changes of the directors, supervisor, managers, and major shareholders.

Title (Note 1)	Name	2021	2021	As atFebruary28	As atFebruary28
		Increase (decrease) in sharesheld	Increase (decrease) in shares pledged	Increase (decrease) in sharesheld	Increase (decrease) in shares pledged
Chairman Director / Major shareholder Legal Representative / Vice Chairman Legal Representative Legal Representative Legal Representative Director / Major shareholder Legal Representative Legal Representative Legal Representative Legal Representative Legal Representative Legal Representative Legal Representative Independent Director Independent Director Independent Director President Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers Managers	Steve Lee Yong-Shin Development Co., Ltd. Charles Sung (Note 3) Chung-Chou Chang Bin-Fu Chen Chain-Cheng Lee Bank of Taiwan Co., Ltd. Wen-Chang Chen (Note 4) Mei-Ling, Wu Tze-Yue, Chen (Note 8) Su-Ju Hsu (Note 5, 6) Hsin-Tzu Hu (Note 7, 8) Shih-Yuan Tai (Note 9) Wei-Hsin Wang (Note 9) Cheng Ching Huang Nien-Tsu Chiang Jimmy T. Hsieh Chao-Feng Chen (Note 10) Su-Chen Lin Hsien-Chang Huang (Note 11) Nicholas N.C. Sheu Andrew Hsieh Allen Cheng Tsui-Jung Chen Chia-Lin Sheu Chih-Chieh Huang Hsin-Chu Lin Hong-Hsing Chuang Wen-Chin Chu (Note 12) Jack Chung Yuan-Yi Liao Jih-Min Chan Stanley Fang Chih-Hung Wang Chih-Hsien Chen (Note 13) Yung-Fu Su Kent Lee Yu-Jen Hsiao Steven Lin Stanley Chao Jonathan Tu Chyi-Shyang Chio Ming-Fang Rao Chiu-Shan Chung Wen-ChihSu	- - ( 45,000 ) - - - - - - - - - - - - - - - - - - - - - - - ( 2,000 ) ( 8,000 ) - - - - - - - - - - - - - - - - -	- - - - - ( 3,100 ) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	- ( 800 ) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

(To be continued)

• 176 -

(Continued)

Title (Note 1)	Name	2021	2021	As at February 28	As at February 28
		Increase (decrease) in shares held	Increase (decrease) in shares pledged	Increase (decrease) in shares held	Increase (decrease) in shares pledged
Managers Managers Managers Managers Managers Managers Managers Managers Managers	Pen-Chi Yu Chin-Ho Lin Chih-Hui Hsu Wun-Bin, Hou Yi-Yen Liao (Note 14) Yi-Ping Wang Nan-Chou Liu Pi-Chen Wang Shang-Jen Tung (Note 15)	- - - 2,000 1,000 - - - -	- - - - - - - - -	- - - - - - - - -	- - - - - - - - -

Note 1: Shareholders who hold 10% of the total shares of the Company or more shall be indicated as major shareholders, and listed individually.

Note 2: Shall the counterparty of the share transfer or share pledging is affiliated person, the following form shall be filled.

Note 3: Office taken newly on January 1, 2021. Note 4: Dismissed on January 16, 2021. Note 5: Office taken newly on January 25, 2021. Note 6: Dismissed on August 9, 2021.

• Note 7: Office taken newly on October 22, 2021.

• Note 8: Dismissed on February 7, 2022.

Note 9: Office taken newly on February 7, 2022. Note 10: Office taken newly on January 1, 2021. Note 11: Dismissed on June 30, 2021. Note 12: Office taken newly on August 5, 2021. Note 13: Dismissed on April 30, 2021. Note 14: Dismissed on January 28, 2022. Note 15: Office taken newly on February 1, 2021.

Equity transfer information

Name (Note 1)	Reason of Share Transfer (Note 2)	Date of Transaction	Counterpart of the Transaction	The relationship between the counterpart of the Transaction and the Company, the directors, the supervisor, and the shareholders with 10% or more shares	Share(s)	Transaction price
None	None	None	None	None	-	-

Note 1: To list the name of the directors, the supervisor, managers, and the shareholders with 10% or more shares.

Note 2: List if the transaction is acquisition or disposition.

• 177 -

Equity pledge information.

Name (Note 1)	Reason of changes of pledge (Note 2)	Date of Change	Counterpart of the Transaction	The relationship between the counterpart of the Transaction and the Company, the directors, the supervisor, and the shareholders with 10% or more shares	Share(s)	% of Ownership	% of Pledge	Amount of pledge (redemption)
None	None	None	None	None	-	-	-	-

Note 1: To list the name of the directors, the supervisor, managers, and the shareholders with 10% or more shares. Note 2: List whether is a pledge or redemption.

• IV. Information related to the shelf registration: None.

Three. Material Financial Information

• I. Summary of the Balance Sheet and Statement of Comprehensive Income in the Past Five Years

• (I) Information for the Balance Sheet

Year Item	Year Item	Financial information for the past five years (Note 1)	Financial information for the past five years (Note 1)	Financial information for the past five years (Note 1)	Financial information for the past five years (Note 1)	Financial information for the past five years (Note 1)
		2021	2020	2019	2018	2017
Cash and cash equivalents		4,178,338	3,684,530	3,415,293	3,237,541	3,338,629
Receivables		668,801	665,460	612,947	675,614	710,462
Financial assets and loans (Note 2)		12,433,810	12,096,213	11,741,232	11,064,690	10,690,130
Reinsurance contract asset		2,060,351	1,919,371	1,919,723	1,888,798	2,127,414
Property and Equipment		468,963	356,406	360,389	376,485	379,724
Right-of-use assets		42,588	45,751	34,132	-	-
INTANGIBLE ASSETS		12,073	9,957	4,708	2,664	4,718
Other Assets (Note 2)		778,051	802,948	798,491	732,689	720,543
Total Assets		20,642,975	19,580,636	18,886,915	17,978,481	17,971,620
Payables		902,607	994,378	984,681	923,186	867,408
Lease liabilities		61,741	71,498	66,645	-	-
Insurance liabilities and insurance contract reserves with financial product’s nature		9,047,868	8,468,433	8,253,100	8,097,638	8,082,318
Reserve for liabilities		83,267	82,378	84,127	84,848	83,571
Other liabilities (Note 2)		366,201	383,416	410,488	453,752	422,401
Total Liabilities	Before distribution	10,461,684	10,000,103	9,799,041	9,559,424	9,455,698
	After distribution	10,733,335	10,398,524	10,161,242	9,885,405	9,854,119
Capital		3,622,004	3,622,004	3,622,004	3,622,004	3,622,004
Capital surplus		98,962	98,962	98,962	98,962	98,962
Retained Earnings	Before distribution	5,889,609	5,750,823	5,413,849	5,043,571	4,807,126
	After distribution	5,617,958	5,352,402	5,051,648	4,717,590	4,408,705
Other items under equity		570,716	108,744	( 46,941)	( 345,480)	( 12,170)
Stockholders’ Equity	Before distribution	10,181,291	9,580,533	9,087,874	8,419,057	8,515,922
	After distribution	9,909,640	9,182,112	8,725,673	8,093,076	8,117,501

• 178 -

Note 1: The financial information has been audited and certified by CPAs for the past five years.

• Note 2: (1) The financial assets and loans include financial assets at fair value through profit or loss, available-for-sale financial assets, financial assets at cost, investment under equity method, other financial assets, financial assets at fair value through other comprehensive income, and investment property.

• (2) Other assets include the deferred income tax assets and other assets.

• (3) Other liabilities include the income tax liabilities for the period, deferred income tax liabilities, and other liabilities.

(II) Statement of Comprehensive Income

Unit: NT$ Thousand

	Unit: NT$ Thousand	Unit: NT$ Thousand	Unit: NT$ Thousand	Unit: NT$ Thousand	Unit: NT$ Thousand
Year Item	Financial information for the past five years (Note)
	2021	2020	2019	2018	2017
Operating Revenues	7,506,858	5,396,686	5,200,892	4,942,674	5,058,168
Operating Costs	5,781,623	3,362,516	3,151,377	3,095,451	2,903,964
Operating Expenses	1,317,938	1,263,771	1,209,664	1,180,816	1,194,254
Non-Operating Income and Expenses	( 3,856)	2,540	( 6,199)	6,998	( 24,408 )
Income Before Tax	403,441	772,939	833,652	673,405	935,542
Income After Tax	373,208	687,595	703,129	560,299	851,701
Other comprehensive income	627,947	167,265	297,722	( 183,077 )	138,314
EPS (NT$)	$1.03	$1.90	$1.94	$1.55	$2.35

• Note: The financial information of the Company has been audited and certified by CPAs for the past five years.

• 179 -

II. Analysis of Key Financial Ratios

alysis of Key Financial Ratios	alysis of Key Financial Ratios
Year (Note 1) Analyzed Items (Note 2)		Analysis of the business benchmarks of finance in the last five years
		2021	2020	2019	2018	2017
Business benchmarks	Change rate of direct premium incomes	33.59	4.59	3.72	1.85	5.94
	Change rate of direct paid claims	62.38	8.11	( 3.47 )	( 4.93 )	5.88
	Change in Retained Premiums	44.20	5.44	6.29	2.92	6.17
	Net value ratio	49.32	48.93	48.12	46.83	47.39
Indicators of Profitability	Returns on assets (%)	1.86	3.57	3.81	3.12	4.78
	Return on equity (%)	3.78	7.37	8.03	6.62	10.41
	Net return of fund operations	3.19	2.51	2.58	1.79	4.05
	Return on investment (%)	2.96	2.30	2.36	1.64	3.72
	Net Combined Ratio (%)	98.29	91.43	90.51	91.73	91.16
	Self-retained expenses (%)	34.29	38.79	38.88	39.90	40.71
	Net loss ratio (%)	64.00	52.64	51.63	51.83	50.45
Holistic operational indicators	Ratio of self-retained premium to equity (%)	69.10	50.92	50.91	51.71	49.67
	Gross premium to equity (%)	89.96	72.46	73.18	76.06	73.71
	Impact ratio of the net reinsurance commission to equity	1.51	2.01	2.26	2.38	2.30
	Ratio of various insurance liabilities to equity (%)	88.87	88.39	90.81	96.18	94.91
	Rate of changes of equity	6.27	5.42	7.94	( 1.14)	8.46
	Rate of expenses	29.53	31.17	31.49	31.60	31.84
Description about the analysis on increase/decrease by more than 20%: 1. The increase in the change rate of direct premium incomes, change in Retained Premiums, ratio of self- retained premium to equity and gross premium to equity was primarily a result of the increase in the insurance premium revenue for the notifiable infectious disease epidemic prevention insurance in 2021. 2. The increase in the variable interest rate on direct paid claims was primarily a result of the increase in the claims and benefits for the notifiable infectious disease epidemic prevention insurance in 2021. 3. The decrease in return on assets (ROA) and return on equity (ROE) was primarily a result of the decrease in net income after tax in 2021 from 2020. 4. The increase in the net interest margin from fund utilization and return on investment was primarily a result of the increase in the income from disposal of equity instrument at fair value through other comprehensive income in 2021 from the same period of last year. 5. The increase in net loss ratio was primarily a result of the increase in retained claims more than the increase in retained earned premium. 6. The increase in net reinsurance commission to equity was primarily a result of the increase in premium unearned in 2021.

Note 1: The financial statements of the Company has been audited and certified by

CPAs for the past five years.

Note 2: The formula for the item to be analyzed are as the following:

1. Business benchmarks

2. (1) Change rate of direct premium incomes = (the cumulative amount

of the direct premium incomes of the period - the cumulative

• 180 -

amount of the direct premium incomes of the previous period) / the cumulative amount of the direct premium incomes of the previous period

[“Direct premium incomes” refers to the premium incomes from the policies directly written to the insured by the insurer.]

• (2) Change rate of directly paid claims = (the cumulative amount of directly paid claims of the period - the cumulative amount of directly paid claims of the previous period) / the cumulative amount of directly paid claims of the previous period

  • [“Directly paid claims” refers to the claim paid to the insured due to the covered accidents of the policies directly written to the insured by the insurer.]

• (3) Change in Retained Premiums = (the cumulative amount of the self-retained premium of the period - the cumulative amount of the self-retained premium of the previous period) / the cumulative amount of the self-retained premium of the previous period [Self-retained premium = the direct premium incomes + premium incomes from reinsurance - expenses from the reinsurance premium]

• (4) Net value ratio = Owner's equity / Total assets excluding dedicated account book for investment insurance policy

• Indicators of Profitability

• (1) Return on assets = [Net profit after tax + interest expenditure x (1- tax rate)] / average total amount of assets

  • [Average total amount of assets = (assets, beginning + assets, ending) / 2]

• (2) Return on Equity = income aftertax / average equity [Average equity = (equity of the period + equity of the previous period) / 2]

• (3) Net interest margin from fund utilization = (net investment income for the period + income from disposal of equity instrument at fair value through other comprehensive income for the period) / [(available fund, beginning + available fund, ending - net investment income for the period - income from disposal of

• 181 -

equity instrument at fair value through other comprehensive income for the period) / 2]

• (4) Net rate of return = (net investment income for the period + income from disposal of equity instrument at fair value through other comprehensive income for the period) / [(assets, beginning + assets, ending - net investment income for the period - income from disposal of equity instrument at fair value through other comprehensive income for the period) / 2]

• (5) Net combined ratio = rate of retained expenses + Net loss ratio

• (6) Rate of retained expenses = self-retained expenses / self-retained premium

[Self-retained premium = the direct premium incomes + premium incomes from reinsurance - expenses from the reinsurance premium]

[Self-retained expenditure = expenditures of commissions and written fee + reinsurance commission expenditure - reinsurance commission incomes + business fee + operation fee + bad debts for depreciation and amortization for personal properties]

• (7) Net loss ratio = retained claims / retained earned premium [Retained claims = claims and payment - claim recovered from reinsurer + net change in claims reserves]

  • [Retained earned premium = direct insurance premium incomes + reinsurance premium incomes - reinsurance premium expenses - net change in unearned premium reserves]

• Holistic operational indicators

• (1) Ratio of Self-retained premium to equity = self-retained premium / equity

• (2) Gross premium to equity = (direct premium incomes + reinsurance premium income) / equity

• (3) Impact ratio of the net reinsurance commission to equity = (unearned premium reserves / self-retained premium) x reinsurance commission incomes / equity

• (4) Ratio of various insurance liabilities to equity = various insurance liabilities / equity

• 182 -

[Various insurance liabilities = special reserves + claim reserves

• unearned liability reserves + other reserves]

• (5) Rate of changes of equity = (equity of the period - equity of the previous period) / the absolute value for the equity of the previous period

• (6) Expense rate = expenses / (direct premium income + reinsurance premium income)

  • [Expenses = expenditures of commissions and written fee + operational expenses +management expenses + bad debts for depreciation and amortization for personal properties + expenses of reinsurance commissions ]

• III. Other information enhancing the insight to the financial status, operational results, cash flows, or the trend of changes: None.

• 183 -

Four. Review and Analysis for Financial Position and Performance

• I. Comparative Analysis of Financial Conditions

Unit: NT$ Thousand

			Unit: NT$ Thousand	Unit: NT$ Thousand
Year Item	December 31, 2021	December 31, 2020	Difference
			Amount	％
Cash and cash equivalents	4,178,338	3,684,530	493,808	13.40
Receivables	668,801	665,460	3,341	0.50
Financial assets and loans (Note 1)	12,433,810	12,096,213	337,597	2.79
Reinsurance contract asset	2,060,351	1,919,371	140,980	7.35
Property and Equipment	468,963	356,406	112,557	31.58
Right-of-use assets	42,588	45,751	( 3,163 )	( 6.91 )
INTANGIBLE ASSETS	12,073	9,957	2,116	21.25
Other Assets (Note 1)	778,051	802,948	( 24,897 )	( 3.10 )
Total Assets	20,642,975	19,580,636	1,062,339	5.43
Payables	902,607	994,378	( 91,771 )	( 9.23 )
Lease liabilities	61,741	71,498	( 9,757 )	( 13.65 )
Insurance liabilities and insurance contract reserves with financial product’s nature	9,047,868	8,468,433	579,435	6.84
Reserve for liabilities	83,267	82,378	889	1.08
Other liabilities (Note 1)	366,201	383,416	( 17,215 )	( 4.49 )
Total Liabilities	10,461,684	10,000,103	461,581	4.62
Capital stock	3,622,004	3,622,004	-	-
Capital surplus	98,962	98,962	-	-
Retained Earnings	5,889,609	5,750,823	138,786	2.41
Other items under equity	570,716	108,744	461,972	424.83
Stockholders’ Equity	10,181,291	9,580,533	600,758	6.27

Note 1: (1) The financial assets and loans include financial assets at fair value through

profit or loss, investment under equity method, other financial assets, financial assets at fair value through other comprehensive income, and investment property.

• (2) Other assets include the deferred income tax assets and other assets.

• (3) Other liabilities include the income tax liabilities for the period, deferred income tax liabilities, and other liabilities.

The analysis is for the changes of 20% or more from before to after the period, with the amount of NT$10 million or more:

(I) Property and Equipment

The increase by NT$112,557 thousand this year from last year was primarily a result of the transfer-in of investment properties by NT$107,555 thousand.

• (II) Other items under equity

The increase by NT$461,972 thousand this year from last year was primarily a result of the increase in the valuation income at fair value through other comprehensive income.

• 184 -

II. Analysis of Financial Performance

Unit: NT$ Thousand

Year Item	2021	2020	Increase (decrease) amount	Change %
Operating Revenues	7,506,858	5,396,686	2,110,172	39.10
Operating Costs	5,781,623	3,362,516	2,419,107	71.94
Operating Expenses	1,317,938	1,263,771	54,167	4,29
Operating Income	407,297	770,399	( 363,102 )	( 47.13)
Non-Operating Income and Expenses	( 3,856 )	2,540	( 6,396 )	( 251.81 )
Profit before Income Tax From Continuing Operation	403,441	772,939	( 369,498 )	( 47.80 )
Tax expense	30,233	85,344	( 55,111 )	( 64.58)
Net profit for the period from continuing operations	373,208	687,595	( 314,387 )	( 45.72 )

Analysis focusing on the increase/decrease changes for 10% or more

(I) Operating Revenues

The increase in operating revenue by NT$2,110,172 thousand this year from the same period of last year was primarily a result of the increase in insurance premium revenue for the notifiable infectious disease epidemic prevention insurance this year.

(II) Operating cost, operating income, profit before income tax from continuing operation and net profit for the period from continuing operations

The increase in operation cost by NT$2,419,107 thousand this year from the same period of last year and the decrease in operating income, profit before income tax from continuing operation and net profit for the period from continuing operations by NT$363,102 thousand, NT$369,498 thousand and NT$314,387 thousand, respectively, this year from the same period of last year were primarily a result of the increase in the claims and benefits for the notifiable infectious disease epidemic prevention insurance, commission expenses and net changes in insurance liabilities this year.

(III) NON-OPERATING INCOME AND EXPENSES

The increase in non-operating revenues and expenses by NT$6,396 thousand this

year from the same period of last year was primarily a result of the decrease in impairment loss of reinsurance reserve assets in the previous year and increase in miscellaneous expenses this year.

• 185 -

(IV) Tax expense

The decrease in the income tax expenses by NT$55,111 thousand this year from the same period of last year was primarily a result of the decrease in the profit before income tax.

Five. Information about replacement of CPAs

• I. Information about CPA’s professional fees

				Unit: NT$ Thousand	Unit: NT$ Thousand	Unit: NT$ Thousand
Name of CPA Firm	Name of accountant	Audit period	Audit Fee	Non-Audit Fees	Total	Remarks
Deloitte & Touche	Wang-Sheng Lin	2021.01.01-2021.12.31	1,960	10,135	12,095
	Wen-Ya Hsu	2021.01.01-2021.12.31

Note: The audit fees only include the professional fees for audit, review and re-audit on financial statements and auditing of the financial forecast as referred to in Item 3, Subparagraph 1, Paragraph 1 of Article 24 of the Regulations Governing the Preparation of Financial Reports by Insurance Enterprises.

The non-auditing fees refer to the professional fees for certification services including tax certification, audit on internal control system, examination of capital adequacy ratio and checklist, audit on compulsory liability insurance for cars/motorcycles, review on annual reports and project consulting service fees.

• II. CPAs Replacement in the Last Two Years: None.

• 186 -