TFMI - Annual Report 2021 | FinancialReports.eu

TWSE: 2832

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Taiwan Fire & Marine Insurance Co., Ltd.

2020 Annual Report

Printed on APR 30, 2021

Taiwan Stock Exchange Market Observation Post System: http://mops.twse.com.tw/ Taiwan Fire & Marine Insurance Website: https://www.tfmi.com.tw/

Note to Readers:

If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language version shall prevail.

1. Spokesperson

Name: Chih-Chieh Huang Title: Vice President Tel: 886-2-23821666#196 E-mail: [email protected]

Acting Spokesperson Name: Wun-Bin Hou Title: Manager Tel: 886-2-23821666#163 E-mail: pennyho @tfmi.com.tw

2. Headquarters and Branches

Headquarters

Address: 8、9F, No. 49, Guanqian Road, Zhongzhang District, Taipei, Taiwan 100 Tel: 886-2-23821666; Fax: 886-2-23882555

Website: https://www.tfmi.com.tw/

Branches

Banchiau Branch 9F, No.3, Sec. 1, Minsheng Road, Banqiao Dist., New Taipei City 220, Taiwan. 886-2-29573538 Taoyuan Branch 10F.-1, No.6, Minquan Road, Taoyuan Dist., Taoyuan City 330, Taiwan 886-3-3353577 Hsinchu Branch 4F, No.118, Sec.1, Dongda Road, East Dist., Hsinchu City 300, Taiwan. 886-3-5348699 Taichung Branch No.35, Jiguang St., Central Dist., Taichung City 400, Taiwan. 886-4-22293176 Changhua Branch 5F, No.43, Xiaoyang Road, Changhua City, Changhua County 500, Taiwan. 886-4-7230664 Chiayi Branch 8F, No.127, Zhongxing Road, West Dist., Chiayi City 600, Taiwan. 886-5-2811177 Tainan Branch 7F, No.655, Sec.1, Ximen Road, North Dist., Tainan City 704, Taiwan. 886-6-2217600 Kaohsiung Branch 4-5F, No.117, Zhongshan 1st Road, Xinxing Dist., Kaohsiung City 800, Taiwan. 886-7-2865000 Yilan Branch No.52, Gozgzheng Road, Luodong Town, Yilan County 265, Taiwan. 886-3-9549743 Hualien Branch No.3, Datong St., Hualien City, Hualien County 970, Taiwan. 886-3-8336156

3. Stock Transfer Agent

Name: Stock Affairs Agency Department of Waterland Securities Address: 4F, No.199, Sec. 3, Chongqing N. Road, Datong Dist., Taipei City 103, Taiwan. Tel: 886-2-25936666

Website: https://www.ibfs.com.tw

4. Auditors

Auditors: Wang-Sheng Lin, Wen-Yea Shyu Name: Deloitte & Touche Tax Consulting Co., Ltd Address: 20F, No. 100, Songren Rd., Xinyi Dist., Taipei City 110, Taiwan (R.O.C.) Tel.: 886-2-27259988 Website: https://www.deloitte.com.tw

5. Overseas Securities Exchange: None

6. Corporate Website

www.tfmi.com.tw

I 、 Letter to Shareholders ········································································· 1 II 、 Company Profile ·················································································· 6 III 、 Corporate Governance Report ···························································· 7 IV 、 Capital Overview ············································································· 115 V 、 Operational Highlights ···································································· 120 VI 、 Financial Information ······································································ 139 VII 、 Review of financial position, business performance and risk issues ··· 272 VIII 、 Special Remarks ············································································ 278

IX 、 Any occurrence of event defined under Subparagraph 2, Paragraph 3, Article 36 of the Securities and Exchange Act in the previous year up to the publication date of this annual report that significantly impacted shareholders’ equity or security prices ·············································· 278

、 I Letter to Shareholders

Dear Shareholders,

The Company's overall operating income for 2020 is NT$5,396,686,000, operating costs are NT$3,362,516,000, operating expenses are NT$1,263,771,000, plus net non-operating income and expenses of NT$2,540,000 and income tax expenses of NT$85,344,000. The net profit for the year is NT$687,595,000, EPS before tax of NT$2.13 and EPS after tax of NT$1.90. The Company has seen a stable overall operating performance, and I would like to thank the shareholders for your long-standing support and to thank the entire staff for the efforts provided.

In 2020, premium income of nonlife insurance industry as a whole exhibited growth of 6.24%, exceeded NT$187 billion. Casualty, personal accident and health lines have deteriorated; whereas all other business lines showed growth momentum, especially for fire, miscellaneous, hull, fishing vessel and aviation insurance lines all have achieved double-digit growth. In 2020, TFMI proactively take advantage of our channel strength, and integrate diversified products to expand into niche markets and improve the customer service level. The premium income from written policies reached NT$6,512,206 thousand for the year, a YOY increase of 4.59% on gross and 5.44% growth on retained premium basis. We continue to rank No. 1 in the residential fire insurance line. In 2020, S&P and Taiwan Ratings continued to award us with the credit ratings, “A-/Stable” and “twAA,” respectively, both outlook Stable.

In terms of corporate social responsibility, the Company actively cooperated with the authorities to promote policy-based insurance. In 2020, the Company was once again awarded "1st Place" in the Residential Earthquake Insurance Excellence Awards conferred by the authorities; “3rd Place” in the Compulsory Automobile Liability Insurance Differentiated Management Competition; "outstanding performance award" and "sustainable care award" in the Micro-insurance Competition. At the same time, combined with the resources of the TFMI Foundation, we are committed to care for the disadvantaged and the solitary seniors, improve the medical environment, support special-needs education for children with disabilities, youth campus anti-drug advocacy, arts and culture, and grassroots sports activities. This year, the Company also assisted the Eden Social Welfare Foundation to purchase a vehicle to promote related homecare services for the elderly in rural areas and vulnerable families.

In terms of market outlook for 2021, COVID-19 will continue to have a global effect, resulting in prolonged decline in economic activities and trades. However, as Taiwan’s strong epidemic prevention and management protocols, the effect to our country is very limited. The domestic tourism is still active, governent continues to bring about various stimulus programs to lessen the economic impact caused by the halt in international travels. At the same time, the e-commerce activities will increase, as the authorities promoting the application of digital finance and insurance technology; the sales momentum of new cars and electric locomotives will increase; and most importantly, insurance market rate and market discipline introduced will prevent market competition for our industry’s stabilization.

With prudent operating principle and customer-oriented business philosophy, TFMI conducts businesses in compliance with laws and regulations, continues to improve professionalism and strengthen core competitiveness. We continue to practice corporate governance, fair dealing and friendly services. On the insurance front, we continue to expand quality business, deepen strategic alliance channels, optimize digital portals, develop diversified products, and improve customer service quality; on the investment side, we strive to revitalize assets and adopt diversified investments to enrich profits. All level of staff work to achieve outstanding performance.

Chairman: Steve Lee

2020 Business Report and 2021 Business Plan are summarized below:

1.1 2020 Business Report

1.1.1 Operating Plan Implementation Results

The total insurance premiums of the current year was NT$6,942,519 thousand. The premium from the direct policies written was NT$6,512,206 thousand(detailed in Table 1) accounted for 93.80% of total premium; inward reinsurance premium was NT$430,313 thousand, accounted for 6.20% of total premium.

Table 1. 2020 Premium from Direct Policies Written

		Unit: NT$thousands
Insurance Category	Amount	Business Breakdown by Direct Policies Written (%)
Automobile Insurance	`2,752,164`	`42.26`
Residential Fire Insurance	`935,591`	`14.37`
CompulsoryAutomobile Liability	`779,167`	`11.96`
Commercial Fire Insurance	`716,711`	`11.01`
Personal Accident Insurance	`426,076`	`6.54`
LiabilityInsurance	`238,774`	`3.67`
EngineeringInsurance	`216,483`	`3.32`
Other PropertyInsurance	`145,404`	`2.23`
Marine Cargo Insurance	`139,566`	`2.14`
Others*	`162,270`	`2.50`
Total	`6,512,206`	`100.00`

Note: Products that account for less than 2% of the total written premiums are collectively indicated under Others*.

1.1.2 Goal Execution and Financial Income for the Current Year

The operating margin was NT$2,034,170 thousand and the net profit before tax was NT$772,939 thousand. The net profit for the period was NT$687,595 thousand.

1.1.3 Profitability Analysis

For 2020 overall business profitability indicators, the return on assets (ROA) was 3.57%, return on equity (ROE) was 7.37%, net profit ratio was 12.74%, and the earnings per share (EPS) was NT$1.90. (Detailed in Table 2)

Table 2. Profitability Indicators

Item	`2020`	`2019`
ROA(%)	`3.57`	`3.81`
ROE(%)	`7.37`	`8.03`
Netprofit ratio (％)	`12.74`	`13.52`
Earningsper share(NT$)	`1.90`	`1.94`

1.1.4 Research and Development

In 2020, a total of 63 new insurance products and clauses were submitted (refer to ” "Operations Overview 1(3)" - Technology, Research and Development Overview on Page 128 to 130 of this annual report for more details).

1.2 2021 Business Plan Outline

1.2.1 Business Policy

With prudent operating principle and customer-oriented business philosophy, the Company conducts businesses with strategic action plans and systematic goal monitoring mechanism. Through on-the-job trainings to ensure professional knowledge are most current, whereby to strengthen our core competitiveness. We continue to implement corporate governance, the principle of fair treatment and financial friendly services, fulfill our corporate social responsibility goals, and strive to balanced performance with risks take on to create healthy profitability.

In terms of business development, the Company's execution of business all in conformation with the laws, regulations and business guidelines; focuses on the development of niche insurance products, expand our customer base in military, civil services, education, employee associations and open bid businesses. We aim to expand our target market as a source of stable profitability. Through vigilant underwriting, market rates monitoring and adjustments, to acheive quality business, the Company has done a good job of loss control to enhance underwriting profitability. The Company continues to develop digital finance, optimize digital portals, and improve the efficiency of e-commerce marketing operations while actively developing innovative product combinations to meet dynamic customer needs; and improves the quality of customer services and protects customer rights.

We continue to apply reasonable salary structure to attract talents, design and arrange appropriate training according to each job attributes and level, and most importantly, provide a good workplace environment. The Company is also committed to develop a comprehensive on-line working platform, optimize work procedures, as to improve work efficiency; and we implement job rotations to cultivate all-round talents. On the investment side, we adopt diversified investment strategy and carefully select investment targets to reduce risks and increases expected returns, while improving the efficiency of premium collection and budget controls, whereby to reduce bad debts and increase the return on capital utilization.

1.2.2 Projected Sales Volume

The target for total premium income from direct policies written in 2021 is NT$6.25 billion.

1.2.3 Significant Production and Marketing Policies

A. Improve the professional knowledge of underwriting and claims personnel, implement the principles of fair hospitality, financial consumer protection and financial-friendly services. The Company also regularly organizes related education and training to improve operating procedures and service quality, and increase customer satisfaction.
B. Strengthen corporate insurance reinsurance contract arrangements, expand underwriting capacity, strive to gain good quality customers and businesses, and prudently underwrite to reduce risks; and establish good relationships with peers, increase branch business, and increase retention premiums.
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C. Set up new digital applications and expand capabilities in information technology services to assist digital transformation, improve sales efficiency and save operating costs, so as to improve operating efficiency.
D. In order to expand the effectiveness of multi-insurance operations, based on the attributes of the channel, the appropriate project products and the planning and marketing project award competitions are provided to encourage colleagues in business divisions to strive for new business with service and efficiency and increase business volume.
F. Comply with market discipline and regulations and refrain from price competition to ensure rate adequacy and stabilize the loss ratio and customers' interests.
G. Implement corporate social responsibility, expand into green businesses and develop related products.

1.3 Development Strategies for the Company in the Future

The COVID-19 pandemic has not yet eased, causing the decline of a part of the domestic Nonlife insurance market. However, the government has controlled the epidemic properly and promoted the domestic tourism industry and related industries. The company will continue to observe and launch related products to respond to this change. In addition, the increasing popularity in domestic self-driving tourism has caused the loss rate of auto insurance to rise, so stabilizing the loss rate and implementing effective control measures are the top priorities of the Company.

The Company keeps steady business development strategy, and strengthens electronization and service quality to improve customer satisfaction and working efficiency. In business, we develop good quality insurance niche, increase quality business volumes, and increase our retention premium to stabilize profit. In underwriting aspect, loss prevention services is applied in selecting business quality. In marketing, we maintain good relations with key channels, understand the market needs accurately, and reflect the movement with products development. In investment, we value the profits gained via stability of investment income and the fluidity of assets on hand, creating stable returns and the performance of earnings.

1.4 Influences from External, Regulatory and Overall Business Environment

The Directorate General of Budget, Accounting and Statistics of the Executive Yuan announced on February 10, 2021 that the preliminary statistical economic growth of Taiwan in the fourth quarter of 2020 was 5.09%. The main reason for the growth was the continuous investment in the domestic manufacturing industry and the expansion of production capacity. The performance of commodity exports and private consumption were also better than expected. The economic growth rate for the whole year of 2020 was 3.11%.

The global impact of the COVID-19 pandemic has led to a sharp decline in economic activities and trade operations. Some countries continue to implement epidemic prevention measures, making the future economic recovery still highly uncertain. It is estimated that it may take up to 1 or 2 years for economic output to recover to the pre-pandemic levels. The International Monetary Fund (IMF) released its latest World Economic Outlook report on January 26, 2021. Because the growth momentum in the second half of last year was stronger than expected, it revised up the 2020 global economic decline forecast to -3.5%, but the global economy is still facing high levels of uncertainty. Taiwan has also been affected by the pandemic, which has impacted related industries. Fortunately, the government has instituted effective anti-epidemic measures and continues to promote economic revitalization measures

to help stabilize the overall economy. The Directorate General of Budget, Accounting and Statistics of the Executive Yuan predicts that the domestic economic growth rate for 2021 will be 4.64%.

In terms of market outlook of the Nonlife insurance market in 2021, the outbreak of the COVID-19 pandemic has increased the public’s awareness of related insurance products and their willingness to insure. The government continues to develop offshore wind power generation projects and solar power generation projects, which has increased the demand for engineering insurance and liability insurance. Deregulation and technological innovation is also driving continuous development of insurance technology such as e-commerce platforms and online insurance. Market rate and product supervision discipline can avoid market price competition and stabilize the market, and is expected to increase business growth momentum. In terms of development strategy, through adjustments of business structure and quality, the Company continues to increase the quality of business, monitors trends of loss, and implements timely reviews the product rate level and sales mix, increase the retention of premiums, so as to enhance the Company's competitiveness in the overall market.

The Company protects the rights and interests of its customers and implements the principles of fair treatment of customers, the insurance industry's financial friendly service standards and consumer dispute handling regulations. The Company strictly complies with market disciplines and regulations in response to market conditions, laws and regulations, and consumer demand. The Company does not engage in price competition to ensure adequate rates, and develops innovative product content to improve product comprehensiveness. The Company is also committed to developing e-commerce channels, mobile device insurance technology, and expand online insurance related services and businesses. By strengthening information security and personal information security management measures and establishing legal and appropriate operating procedures through a systematic approach to risk management, the Company is able to facilitate the control of corporate risks.

II. Company Profile

2.1 Date of Establishment: March 12, 1948

2.2 Company History

TFMI was established in the early stages by taking over various insurance companies established by the Japanese in Taiwan, with the formation of The "Taiwan Fire & Marine Insurance Company Provisional Office" in June 1946. In addition to taking over the insurance business and the assests, new insurance businesses were also developed. The Company was officially established on March 12, 1948 and it is now Taiwan's oldest nonlife insurance company.

At its founding stage, the Company only offered a few insurance products as the demand for insurance was limited. However, after over 70 years of operations, the Company has expanded its product offerings to 80 items and has set up 40 plus branches nationwide, thereby establishing its service network all over the country. In August 2006, the Company established the Shanghai Representative Office to expand its services terrority.

At its formation, the Bank of Taiwan, Land Bank of Taiwan, First Commercial Bank, Chang Hwa Commercial Bank, Hua Nan Commercial Bank, Taiwan Navigation Co., Ltd., Taiwan Railways Administration and other entities provided the Company’s initial capital of 10 million Old Taiwan dollars. During the following 57 years, investments also came from the Taiwan Cooperative Bank, Taiwan Business Bank, and Taiwan Chung Hsing Paper Corporation and the Company became a provincial business entity. The Company's stocks were listed on Taiwan Stock Exchange on September 30, 1997 and the Company was reorganized into a privatized business on January 22, 1998 to comply with government policies. The Company became a private enterprise after over 50 years of public operations. The Company Issued new stocks by capital surplus in September 2010. Its capital is now NT$3,622,004,000.

Under the guidance of its "stable and customer-oriented operations" policy, the Company has been able to maintain strong capital levels and good underwriting performance. The Company has also been awarded "A-" rating by Standard & Poors (S&P) and "twAA" rating with "Stable" outlook by Taiwan Ratings. The Company pays serious attention to corporate governance, legal compliance and corporate social responsibility, as well as protects the interests of various stakeholders. As a result, the Company has been listed in the top 20 percent of publicly listed companies for seven consecutive years during the corporate governance evaluation conducted by Taiwan Stock Exchange (TWSE).

In the future, TFMI will continue to hold true to our strategic policies of prudent management and sustainable development. Internally, we will strengthen our corporate governance, strive to care for employees, and enhance our management performance. Externally, we will emphasize customer relations management to improve the quality of service for our customers. Moreover, through TFMI Foundation, we will continuously care for disadvantaged groups, promote green energy and environmental friendliness, and support academic research and physical fitness activities.

、 III Corporate Governance Report

3.1 Organization 3.1.1 Organizational Chart

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3.1.2 Organization Chart

Department	Responsibility
Audit Dept	In charge of the annual audit plan, determine the audit items and compile internal auditing manuals, reports and other related matters.
Risk Management Dept.	In charge of monitoring, measuring and evaluating corporate risks, assist in the formulation and implementation of risk managementpolicies approved bythe Board of Directors and other related matters.
Legal Compliance Dept.	In charge of operations related to Board Meetings, Board documentations, legal compliance matters, compliance to laws and regulations, research,planning, and handlingof legal affairs and other related matters.
President’s Office	In charge of the communication and research of overseas business markets and to assist President in handling of confidential affairs; reinsurance planning and arrangement, reinsurance underwriting and processing; general matters related to estate and labor such as administrations and procurement, property management, security protection, documents and other general matters.
Planning Dept.	In charge of planning operating goals and operating strategy, operating performance evaluation and management, brand management and welfare activity planning, media relationship management, information management and analysis, internal control system managmeent, credit rating management, consumer dispute handling. Planning and evaluation for the establishment of branches and business offices, review and management of insurance agency contracts, management of public information disclosure, and other related matters.
Information Technology Service Dept.	In charge of training of the development and design, programming and computer operation for information application systems. In charge of related matters such as the maintenance of computer operating system, the planning and design for network system, web design, the operation and management for network connection, etc.
Finance Dept.	In charge of fund scheduling and utilization, securities investment, real estate investment and management, stock affairs, media declaration, premium control, cashier, expense budgeting, financial reporting, accounting system promotion, accounting, tax reporting, fulfill regulation needs and other related matters.
Actuarial Dept.	In charge of actuarial andproduct development matters.
Human Resource Dept.	In charge of various human resources, including the planning for human resources strategic, salary and welfare systems, performance management, talent cultivation and organizational development, employee relations, the annual planning for human resources, budget and other related matters.
Bancassurance Dept.	In charge of bancassurance channel, product planning, marketing strategies, channel expansion, the supporting sales strategies, trainingand management.
Intermediary Channel Dept.	In charge of domestic and foreign brokerage channels management, training, and other related matters.

Department	Responsibility
Direct Marketing Dept.	In charge of direct marketing development and design, marketing strategies, supporting sales strategies, management and trainingand customer services.
E-Commerce Dept.	In charge of e-commerce business development design, marketing strategies, supporting sales strategies, management and training.
Underwriting Dept., Property	In charge of commercial fire and engineering insurance business underwriting, operations, training and management; statistics and analysis, insuranceproduct development, execution and maintenance.
Underwriting Dept., Auto	In charge of automobile insurance business underwriting, operations, training and management; statistics and analysis, insuranceproduct development, execution and maintenance.
Underwriting Dept., Liability	In charge of liability insurance, credit guarantee insurance, miscellaneous insurance, marine insurance, aviation insurance business underwriting, operations, training and management; statistics and analysis, insurance product development, execution and maintenance.
Underwriting Dept., Personal Lines	In charge of residential fire and earthquake insurance, health insurance, accident insurance, travel accident insurance, comprehensive travel insurance, other individual personal insurance, underwriting, operations, training and management; statistics and analysis, insuranceproduct development, execution and maintenance.
Claim Service Dept., Personal Lines	In charge of claim services for all personal line businesses, training and other related matters.
Claim Service Dept., Commercial Lines	In charge of claim services for all commercial line businesses, training and other related matters.
Business Development Dept. I	In charge of the execution for marketing strategies at the location assigned, channels development, customer management, talent training, and other related matters.
Branch Offices	In charge of the execution for marketing strategies at the location assigned, channels development, customer management, talent training, and other related matters. Responsible for the underwriting for insurance products, claims and training, premium collection, cashier, taxation and administrative business, and other related matters for branch operations.

3.2 Directors, Supervisors and Management Team

3.2.1 Directors and Supervisors

3.2.1 Directors and Supervisors	3.2.1 Directors and Supervisors	3.2.1 Directors and Supervisors	3.2.1 Directors and Supervisors	3.2.1 Directors and Supervisors	3.2.1 Directors and Supervisors	3.2.1 Directors and Supervisors
							As of 4/20/2021
Title (Note 1) (Note 4)	Nationality / Country of Origin	Name (Note 4)	Gender	Date Elected	Term (Years)	Date First Elected (Note 2)	Shareholding when Elected		Current Shareholding		Spouse & Minor Shareholding		Shareholding by Nominee Arrangement		Experience（Education） (Note 3)	Other Position	Executives, Directors or Supervisors who are spouses or within two degrees of kinship
							Shares	％	Shares	％	Shares	％	Shares	％			Title	Name	Relation
Chairman	R.O.C.	Steve Lee	Male	`2020.06.12`	`3`	`1999.05.12`	`7,509,939`	`2.07%`	`7,509,939`	`2.07%`	`1,030,229`	`0.28%`	`-`	`-`	PhD, Political Economics, School of Economics, Nankai University Chairman, TFMI Assets Management Co., Ltd.	Director, Tong-Sheng Development Co., Ltd.、 Director, Navigator Investment Co., Ltd.、 Director, Navigator Real Estate Co., Ltd.、 Director, Ten Outstanding Young Persons Foundation、 Chairman, Taiwan Fire & Marine Foundation、 Director, Pilot Investment Enterprise Co., Ltd.、 Director, Sirtec International Co., Ltd.、 Director, SIRTEC INTERNATIONAL(BVI) CO., LTD、 Director, SIRFA (B.V.I.) CO., LTD.、 Director, Sirlight Trading Co., Ltd、 Director, FORLAND AUTO TRADE HOLDING CO., LTD.、 Director, FORLAND TRADING CO., LTD.、 Director, Navigator Financial LeasingCo.,Ltd.	Director	Chain- Cheng Lee	Sibling
Director of Corporate shareholder	R.O.C.	Yong-Shin Development Co., Ltd.	`-`	`2020.06.12`	`3`	`1999.05.12`	`24,158,535`	`6.67%`	`24,158,535`	`6.67%`	`-`	`-`	`-`	`-`	None	None	None	None	None
Director	R.O.C.	Charles Sung (Representative of Yong-Shin Development Co., Ltd.)	Male	`2020.06.12`	`3`	`2011.06.10`	`400,000`	`0.11%`	`355,000`	`0.10%`	`-`	`-`	`-`	`-`	Master, College of Management, National Taiwan University President, Central Insurance Co., Ltd. President, AIG General Insurance (Taiwan) Co., Ltd.	Director, Taiwan Fire & Marine Foundation	None	None	None

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Title (Note 1) (Note 4)	Nationality / Country of Origin	Name (Note 4)	Gender	Date Elected	Term (Years)	Date First Elected (Note 2)	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience（Education） (Note 3)	Other Position	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship
							Shares	％	Shares	％	Shares	％	Shares	％			Title	Name	Relation
Director	R.O.C.	Chung-Chou Chang (Representative of Yong-Shin Development Co., Ltd.)	Male	`2020.06.12`	`3`	`2008.06.13`	`4,762,984`	`1.32%`	`4,762,984`	`1.32%`	`218,000`	`0.06%`	`-`	`-`	Master, Department of Computer Science, Northrop University Chairman, Ambassador Co. Ltd.	Chairman, Ambassador Co., Ltd.	None	None	None
Director	R.O.C.	Bin-Fu Chen (Representative of Yong-Shin Development Co., Ltd.)	Male	`2020.06.12`	`3`	`2011.06.10`	`-`	`-`	`-`	`-`	`-`	`-`	`-`	`-`	EMBA, College of Management, National Taiwan University Chairman, Guang Shi Co., Ltd.	Chairman, Guang Shi Co., Ltd.	None	None	None
Director	R.O.C.	Chain-Cheng Lee (Representative of Yong-Shin Development Co., Ltd.) (Note 6)	Male	`2020.11.11`	3	2002.05.20 (Note 7)	6,038,909	1.67%	6,038,909	1.67%	42,420	0.01%	-	-	Ph.D., Economics, Shanghai University of Finance and Economics, Shanghai. Master of Business Administration, Financial Risk Management, St John's University, USA. Master of Business Administration, Business Administration, Johnson & Wales University, USA. Director, IBF Financial Holdings Co., Ltd.	Chairman, Yong-Shin Development Co., Ltd. Chairman, Navigator Real Estate Co., Ltd. Chairman, Tong-Sheng Development Co., Ltd. Director, Jia-Der Investment Co., Ltd. Director, Navigator Investment Co., Ltd. Chairman, FORLAND AUTO TRADE HOLDING CO., LTD. Chairman, Taiwan Navigator Asset Investment Co., Ltd. Director, Pilot Investment Enterprise Co., Ltd.	Chairman	Steve Lee	Sibling
Director of Corporate shareholder	R.O.C.	Bank of Taiwan Co., Ltd.	`-`	`2020.06.12`	`3`	`1997.09.30`	`64,608,278`	`17.84%`	`64,608,278`	`17.84%`	`-`	`-`	`-`	`-`	None	None	None	None	None

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Title (Note 1) (Note 4)	Nationality / Country of Origin	Name (Note 4)	Gender	Date Elected	Term (Years)	Date First Elected (Note 2)	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience（Education） (Note 3)	Other Position	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship
							Shares	％	Shares	％	Shares	％	Shares	％			Title	Name	Relation
Director	R.O.C.	Mei-Ling Wu (Representative of Bank of Taiwan Co., Ltd.)	Female	`2020.06.12`	`3`	`2018.10.12`	`-`	`-`	`-`	`-`	`-`	`-`	`-`	`-`	Master, Department of International Business, National Dong Hwa University Bank of Taiwan Co., Ltd. Tamsui Branch Manager, Bank of Taiwan Co., Ltd. Luzhou Branch Manager	SVP and General Manager, Department of Consumer Finance, Bank of Taiwan Co., Ltd.	None	None	None
Director	R.O.C.	Tze-Yue, Chen (Representative of Bank of Taiwan Co., Ltd.)	Female	`2020.06.12`	`3`	`2020.01.21`	`-`	`-`	`-`	`-`	`-`	`-`	`-`	`-`	Department of Banking National Chengchi University Bank of Taiwan Co., Ltd. Songshan Branch Manager, Bank of Taiwan Co., Ltd. Minsheng Branch Manager, Bank of Taiwan Co., Ltd. Nanxinzhuang Branch Manager EVP and General Manager Department of Domestic Operations, Bank of Taiwan Co., Ltd	Executive Vice President & General anager, Department of Business, Bank of Taiwan Co., Ltd.	None	None	None
Director	R.O.C.	Su-Ju Hsu (Representative of Bank of Taiwan Co., Ltd.) (Note 8)	Female	`110.01.25`	`3`	`2021.01.25`	`-`	`-`	`-`	`-`	`-`	`-`	`-`	`-`	Ph.D. in Money and Banking, National Chengchi University. SVP & General Manager, Department of Risk Management, Bank of Taiwan. VP & DGM, Department of Risk Management, Bank of Taiwan. AVP & DGM, Wuchang Branch, Bank of Taiwan.	EVP & General Manager, Department of Risk Management, Bank of Taiwan	None	None	None

12 -

Title (Note 1) (Note 4)	Nationality / Country of Origin	Name (Note 4)	Gender	Date Elected	Term (Years)	Date First Elected (Note 2)	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience（Education） (Note 3)	Other Position	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship
							Shares	％	Shares	％	Shares	％	Shares	％			Title	Name	Relation
Independent Director	R.O.C.	Cheng Ching Huang	Female	`2020.06.12`	`3`	`2008.06.13` (Note 9)	`-`	`-`	`-`	`-`	`-`	`-`	`-`	-	MBA University of Tennessee, Knoxville Master of Business Administration, University of Tennessee, Knoxville Bachelor of Business Administration, National Cheng Chi University. Executive Vice President, Land Bank of Taiwan General Manager of Department of International Banking General Manager of Department of Treasury General Manager of Hoping Branch General Manager of Offshore Banking Unit Branch Deputy General Manager of Credit Management	None	None	None	None
															Supervisor, Taiwan Fire
															& Marine Insurance
															Co., Ltd.
															Director, United Taiwan Bank, S.A. Director, Agricultural Credit Guarantee Fund Director, Trust Association of R.O.C. Director, Bills Finance Association of R.O.C.

13 -

Title (Note 1) (Note 4)	Nationality / Country of Origin	Name (Note 4)	Gender	Date Elected	Term (Years)	Date First Elected (Note 2)	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience（Education） (Note 3)	Other Position	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship
							Shares	％	Shares	％	Shares	％	Shares	％			Title	Name	Relation
Independent Director	R.O.C.	Nien-Tsu Chiang	Female	`2020.06.12`	`3`	`2020.06.12`	`-`	`-`	`-`	`-`	`-`	`-`	`-`	`-`	Ph.D of Law, National Chengchi University. Ph.D of Business Administration, Macau University of Science and Technology. Executive master of Business Administration, National Chengchi University. Post Bachelor of Law, Graduate Department of Law, Fu Jen Catholic University. Bachelor of Arts, Department of Political Science, Tunghai University Consultant, Judicial Reform Foundation. Chairman, Taipei Awakening Association.	Adjunct Assistant Professor, College of Law, National Chengchi University. Adjunct Assistant Professor, Department of Business Administration, Nanhua University.	None	None	None
Independent Director	R.O.C.	Jimmy T. Hsieh	Male	`2020.06.12`	`3`	`2017.06.16`	`-`	`-`	`-`	`-`	`-`	`-`	`-`	`-`	B. A., Economics, University of California, Berkeley. Director, VANON Capital	Director, VANON Capital	None	None	None

Note 1: For juristic person shareholders, their names and representatives shall be stated (for representatives, the names of juristic person shareholders they represent shall be indicated respectively) and filled in Table 1. Note 2: Please list the first date to take the charge of director or supervisor of the Company, and note with illustrations for any disruption of duty occurred.

Note 3: Work experiences of anyone in the table above that are related to their current roles, such as previous employment at CPA firms or employment in affiliated companies, shall be disclosed along with job titles and responsibilities.

Note 4: If the Chairman and President or equivalent (the top manager) are the same person, or are spouses or relatives within the first degree of kinship, the reasons, rationality, necessity, and corresponding measures (such as increasing the number of Independent Directors and having more than half of the Directors who do not serve as employees or managers, etc.) shall be explained: None.

Note 5: The Company has set up an Audit Committee to replace supervisors.

Note 6: Yong-Shin Development Co., Ltd. reassigned its representative Chain-Cheng Lee on November 11, 2020. The original representative, Julie Lee was dismissed.

Note 7: Mr. Chain-Cheng Lee first served as a Director of the Company on May 20, 2002, and stepped down on July 19, 2005. He was re-elected as a Director of the Company on November 11, 2020. Note 8: Bank of Taiwan Co., Ltd. reassigned its representative Su-Ju Hsu on January 25, 2021. The original representative, Wen-Chang Chen was dismissed.

Note 9: Ms. Cheng Ching Huang first served as a Supervisor of the Company on June 13, 2008, and stepped down on June 9, 2014. She was re-elected as an independent Director of the Company on June 12, 2020. Note10: ﹝ - ﹞ in the table means ﹝ 0 ﹞ .

14 -

Major shareholders of the institutional shareholders

As of 4/20/2021

	As of 4/20/2021
Name of Institutional Shareholders(Note 1)	Major Shareholders(Note 2)
Bank of Taiwan Co., Ltd.	Taiwan Financial Holding Co., Ltd.`(100.00%)`
Yong-Shin Development Co., Ltd.	Chao-Tzu Lee Chen (24.08%)、Navigator Investment Co., Ltd. (21.78%)、 Wen-Yung Lee (17.41%)、Chain-Cheng Lee (9.07%)、Qiao-Nong Investment Co., Ltd. (8.15%)、Tong-Sheng Development Co., Ltd. (6.67%)、Jia-Der Investment Co., Ltd.`(5.92%)`、Steve Lee (3.89%)、 Mu-HengWu(2.59%)、Julie Lee(0.44%)

Note 1: If the Directors and Supervisors are representatives of Institutional Directors, fill in the names of the Institutional Directors.

Note 2: Fill in the names of the dominant shareholders of the Institutional Shareholders (Top 10 by quantity of shareholding) and the proportion of shareholding. If the dominant shareholders of the Institutional Shareholders are also institutional shareholders, fill in Table 2 below
Note 3: If a corporate shareholder is not a company entity, its shareholders' names and shareholding ratio should be disclosed, that is to say, the names of the contributors or sponsors and ratio of contribution or sponsorship should be disclosed.

Major shareholders of the Company’s major institutional shareholders

Major shareholders of the Company’s major institutional shareholders	Major shareholders of the Company’s major institutional shareholders
As of 4/20/2021
Name of Institutional Shareholders(Note 1)	Major Shareholders(Note 2)
Taiwan Financial Holding Co., Ltd.	Ministry of Finance, R.O.C.`(100.00%)`
Navigator Investment Co., Ltd.	Navigator Real Estate Co., Ltd.`(40.71%)`、Jia-Der Investment Co., Ltd. `(26.55%)`、Qiao-Nong Investment Co., Ltd.`(24.78%)`、Yong-Shin Development Co., Ltd.`(6.19%)`、Julie Lee`(0.88%)`、Mu-Heng Wu `(0.35%)`、Steve Lee`(0.18%)`、Chain-Cheng Lee`(0.18%)`、Chao-Tzu Lee Chen `(0.18%)`
Qiao-Nong Investment Co., Ltd.	Julie Lee`(34.52%)`、Chain-Cheng Lee`(31.15%)`、Steve Lee`(27.43%)`、 ZhenbangInternational Hotel Management Consultant Co.,Ltd. `(6.90%)`
Tong-Sheng Development Co., Ltd.	Chain-Cheng Lee`(81.02%)`、Navigator Real Estate Co., Ltd.`(16.95%)`、 Julie Lee`(1.69%)`、Wen-YungLee`(0.34%)`

Note 1: If the dominant shareholders in Table 1 are institutional shareholders, fill in the names of the Institutional Directors.

Note 2: Fill in the names of the dominant shareholders of the Institutional Shareholders (Top 10 by quantity of shareholding) and the proportion of shareholding. Note 3: If a corporate shareholder is not a company entity, its shareholders' names and shareholding ratio should be disclosed, that is to say, the names of the contributors or sponsors and ratio of contribution or sponsorship should be disclosed.
15 -

Professional Qualifications and Independence Analysis of Directors and Supervisors

As of 4/20/2021

Criteria Name	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Independence Criteria(Note)	Independence Criteria(Note)	Independence Criteria(Note)	Independence Criteria(Note)	Independence Criteria(Note)	Independence Criteria(Note)	Independence Criteria(Note)	Independence Criteria(Note)	Independence Criteria(Note)	Independence Criteria(Note)	Independence Criteria(Note)	Independence Criteria(Note)	Number of Other Public Companies in Which the Individual is Concurrently Serving as an Independent Director
	An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting, or Other Academic Department Related to the Business Needs of the Company in a Public or Private Junior College, College or University	A Judge, Public Prosecutor, Attorney, Certified Public Accountant, or Other Professional or Technical Specialist Who has Passed a National Examination and been Awarded a Certificate in a Profession Necessary for the Business of the Company	Have Work Experience in the Areas of Commerce, Law, Finance, or Accounting, or Otherwise Necessary for the Business of the Company	`1`	`2`	`3`	`4`	`5`	`6`	`7`	`8`	`9`	`10`	`11`	`12`
Steve Lee																`0`
Yong-Shin Development Co., Ltd. Representative: Charles Sung																`0`
Yong-Shin Development Co., Ltd. Representative: Chung-Chou Chang																`0`
Yong-Shin Development Co., Ltd. Representative: Bin-Fu Chen																`0`
Yong-Shin Development Co., Ltd. Representative: Chain-Cheng Lee																`0`
Bank of Taiwan Co., Ltd. Representative: Mei-Ling Wu																`0`
Bank of Taiwan Co., Ltd. Representative: Tze-Yue, Chen																`0`
Bank of Taiwan Co., Ltd. Representative: Su-Ju Hsu																`0`
Independent Director Cheng-Ching Huang																`0`
Independent Director Nien-Tsu Chiang																`0`
Independent Director Jimmy T. Hsieh																`0`

16 -
Note: Please tick the corresponding boxes that apply to the directors or supervisors during the two years prior to being elected or during the term of office.
Not an employee of the Company or any of its affiliates.
Not a director or supervisor of the Company or any of its affiliates (not applicable in cases where the person is an independent director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws).
Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of one percent or more of the total number of issued shares of the company or ranks as one of its top ten shareholders.
Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship of a manager in (1) or personnel in (2) and (3).
Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the Company's outstanding shares, a top five shareholder, or appointed as the Company's director or supervisor in accordance with Article 27, Paragraph 1 or 2 of the Company Act (not applicable in cases where the person is an independent director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws).
Not a director, supervisor, or employee of other companies controlled by the same person with over half of the Company's director seats or shares with voting rights (not applicable in cases where the person is an independent director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws).
Not a director, supervisor, or employee of another company or institution who is the same person or spouse of the Company's chairperson, president or equivalent position (not applicable in cases where the person is an independent director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws).
Not a director, supervisor, or executive officer of a specific company or institution with financial or business dealings with the Company, or shareholder with 5% or more shares of the Company (not applicable in cases where the specific company or institution holds 20% or more but less than 50% of the Company's outstanding shares, and is an independent director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws).
Not a professional individual who, or an owner, partner, director, supervisor, or manager of a sole proprietorship, partnership, company, or institution that audited or provided commercial, legal, financial, or accounting services for total compensation not exceeding NT$500,000 in the most recent two years to the company or to any affiliate of the company, or a spouse thereof. This does not apply to members of the Remuneration Committee, Public Tender Offer Review Committee, or Merger and Acquisition Special Committee performing duties in accordance with the Securities and Exchange Act or laws and regulations related to mergers and acquisitions.
Not having a marital relationship, or a relative within the second degree of kinship to any other director of the company;
Not having any of the situations set forth in Article 30 of the Company Act of the ROC.
Not a government agency, juristic person, or its representative set forth in Article 27 of the Company Act of the ROC.
17 -

3.2.2 Board membership diversification policy and results

According to Article 22 of the Company's Corporate Governance Best Practice Principles, the appropriate number of board seats in the structure of the Company's Board of Directors shall be determined by factoring in the Company’s scale of business development and the shareholding ratio of major shareholders, as well as taking into account actual operational needs in accordance with the law and the Company's Corporate Charter.

As we value diversity, the 11 Directors (including 3 Independent Directors) of Company’s 26th Term Board of Directors are the professional elites from the law, finance and insurance industries, including 4 holders of PhD and 5 holders of master's degree who specialize in various professions including business management, information technology, law and commerce. Our Directors possess the knowledge, skills and qualities required to perform their duties. For the composition of the Board, 27% of the Board are Independent Directors; One Independent Directors with terms more than 3 years and 2 Independent Directors below 3 years; 1 Director is under 50 years of age, 5 Directors are between 40 and 59 years of age and 5 Directors are between 60 and 71 years of age. The Company also values gender equality on the task force, with additional female members, we now have 45% of the Board are female Directors.

To achieve the ideal objective of corporate governance, the Board of Directors shall possess the following capabilities:

Ability to make sound business judgments
Ability to conduct accounting and financial analysis
Ability to manage a business
Risk management knowledge and skills
Ability to respond to a crisis
Industry knowledge
An understanding of international markets
Leadership ability
Decision making abilities

Diversified evaluation Items Name	Gender	Ability to make sound business judgments	Ability to conduct accounting and financial analysis	Ability to manage a business	Risk management knowledge and skills	Ability to respond to a crisis	Industry knowledge	An understanding of international markets	Leadership ability	Decision making abilities
Steve Lee	Male	`v`	`v`	`v`	`v`	`v`	`v`	`*`	`v`	`v`
Charles Sung	Male	`v`	`*`	`v`	`v`	`v`	`v`	`v`	`v`	`v`
Mei-LingWu	Female	`v`	`v`	`v`	`v`	`v`	`v`	`v`	`*`	`*`
Tze-Yue Chen	Female	`v`	`v`	`*`	`*`	`v`	`v`	`v`	`*`	`*`
Su-Ju Hsu	Female	`v`	`v`	`v`	`v`	`v`	`v`	`v`	`v`	`*`
Chung-Chou Chang	Male	`v`	`v`	`v`	`v`	`v`	`*`	`*`	`v`	`v`
Bin-Fu Chen	Male	`v`	`v`	`v`	`v`	`v`	`*`	`*`	`v`	`v`
Chain-ChengLee	Male	`v`	`*`	`v`	`v`	`v`	`v`	`v`	`v`	`v`
Cheng-ChingHuang	Female	`v`	`v`	`v`	`v`	`v`	`v`	`v`	`v`	`v`
Nien-Tsu Chiang	Female	`v`	`v`	`v`	`v`	`*`	`v`	`v`	`v`	`v`
Jimmy T. Hsieh	Male	`*`	`v`	`v`	`*`	`v`	`v`	`v`	`v`	`v`

Note: * Possess partial capabilities

18 -

3.2.2 Management Team

3.2.2 Management Team	3.2.2 Management Team	3.2.2 Management Team	3.2.2 Management Team	3.2.2 Management Team
					As of 4/20/2021
Title (Note 1) (Note 3)	Nationality/ Country of Origin	Name (Note 3)	Gender	Date Effective	Shareholding		Spouse & Minor Shareholding		Shareholding by Nominee Arrangement		Experience（Education） (Note 2)	Other Position	Managers who are Spouses or Within Two Degrees of Kinship
					Shares	％	Shares	％	Shares	％			Title	Name	Relation
President	R.O.C.	Chao-Feng Chen	Male	2021.01	`-`	`-`	`-`	`-`	`-`	`-`	Department of Accounting, Chung Yuan Christian University Vice Chairman, Taiming Assurance Broker Co., Ltd. Vice Chairman, Navigator Financial Leasing Co., LTD Partner, Deloitte & Touche CPA Executive Vice President, Taiwan Fire & Marine Insurance Co.,Ltd	Director,Taiwan Fire & Marine Foundation Chairman of the Board, E-Life CO LTD Supervisor, Guanhua Investment CO LTD	None	None	None
Senior Vice President	R.O.C.	Nicholas N.C. Sheu	Male	`2018.05`	`191,533`	`0.05%`	`-`	`-`	`-`	`-`	Georgia State University Department of Risk Management and Insurance Research MS, Tamkang University Department of Risk Management and Insurance Manager, Tokyo Marine Newa Insurance, Co., Ltd. Vice President, Taiwan Fire & Marine Insurance Co.,Ltd	Director,Taiwan Fire & Marine Foundation	None	None	None
General Auditor	R.O.C.	Su-Chen Lin	Female	`2015.03`	`42,244`	`0.01%`	`-`	`-`	`-`	`-`	Bachelors, Department of Accounting, Ming Chuan University Deputy Manager of Deloitte Touche Tohmatsu Limited Project Manager, Taiwan Fire & Marine Insurance Co.,Ltd	None	None	None	None
Chief Compliance Officer	R.O.C.	Hsien-Chan g Huang	Male	`2018.05`	`-`	`-`	`-`	`-`	`-`	`-`	MS, College of Management, Yuan Ze University Manager, Tokyo Marine Newa Insurance, Co., Ltd Vice President, Taiwan Fire & Marine Insurance Co.,Ltd	None	None	None	None
Senior Vice Presiden	R.O.C.	Andrew Hsieh	Male	`2016.12`	`-`	`-`	`-`	`-`	`-`	`-`	MS, Dept. Harbor & River Engineering, National Taiwan Ocean University Director, Nan Shan General Insurance, Co., Ltd Vice President,Chartis Taiwan Insurance Co.,Ltd	None	None	None	None
Senior Vice Presiden	R.O.C.	Allen Cheng	Male	`2018.04`	`-`	`-`	`-`	`-`	`-`	`-`	BS, Department of Business Administration, Tunghai University Deputy Manager, MSIG Mingtai Insurance Co., Ltd Manager, Tokyo Marine Newa Insurance, Co., Ltd Vice President, Taiwan Fire & Marine Insurance Co.,Ltd	Director,Taiwan Fire & Marine Foundation	None	None	None

19 -

Title (Note 1) (Note 3)	Nationality/ Country of Origin	Name (Note 3)	Gender	Date Effective	Shareholding	Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience（Education） (Note 2)	Other Position	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship
					Shares	％	Shares	％	Shares	％			Title	Name	Relation
Senior Vice Presiden	R.O.C.	Chia-Lin Sheu	Male	`2019.09`	`80,160`	`0.02%`	`-`	`-`	`-`	`-`	MS, Nankai Institute of Economics Vice President, Taiwan Fire & Marine Insurance Co.,Ltd	None	None	None	None
Senior Vice Presiden	R.O.C.	Tsui-Jung Chen	Female	`2019.09`	`223,296`	`0.06%`	`-`	`-`	`-`	`-`	Graduate School of Business Administration, San Diego State University Vice President, TFMI、Vice Chairman, Taiming Assurance Broker Co., Ltd.、Legal Representative, General Manager, Kun Shan Feng Sheng Insurance AgencyCO LTD	None	None	None	None
Vice President	R.O.C.	Chih-Chieh Huang	Male	`2020.02`	`-`	`-`	`-`	`-`	`-`	-	MS, Graduate Institute of Finance, Chung Cheng University College of Management Senior Manager, Taiwan Life Insurance Co. Vice President,TLG Insurance Co	None	None	None	None
Vice President	R.O.C.	Hsin-Chu Lin	Female	`2010.08`	`195,000`	`0.05%`	`-`	`-`	`-`	`-`	Master of Business Administration, National Taiwan University of Science and Technology Manager, Tokyo Marine Newa Insurance, Co Manager,AIU Insurance Co	Director,Taiwan Fire & Marine Foundation	None	None	None
Vice President	R.O.C.	Jack Chung	Male	`2019.02`	`33,000`	`0.01%`	`-`	`-`	`-`	`-`	Master of Business Administration, Chung-Yuan Christian University Manager, Central Insurance Co. Senior Manager, Taiwan Fire & Marine Insurance Co.	None	None	None	None
Vice President	R.O.C.	Yuan-Yi Liao	Male	`2019.02`	`-`	`-`	`-`	`-`	`-`	`-`	Master of Arts in Economics, National Dong-Hwa University Manager, TLG Insurance Senior Manager, Taiwan Fire & Marine Insurance Co.	None	None	None	None
Vice President	R.O.C.	Hong-Hsing Chuang	Male	2021.02	`7,000`	`0.00%`	`-`	`-`	`-`	`-`	BA, Department of History, Fu Jen Catholic University Assistant Manager, Tokyo Marine Newa Insurance, Co. Senior Manager,Taiwan Fire & Marine Insurance Co.	None	None	None	None
Vice President	R.O.C.	Steven Lin	Male	2021.02	`1,227`	`0.00%`	`-`	`-`	`-`	`-`	MS, Insurance and Finance Management, Department of Insurance, Chaoyang University of Science and Technology Vice-Section Head, Union Insurance Company Senior Manager, Taiwan Fire & Marine Insurance Co.,Ltd	None	None	None	None
Senior Manager	R.O.C.	Jih-Min Chan	Male	`2010.04`	`100,520`	`0.03%`	`-`	`-`	`-`	`-`	Department of Electronic and Computer Engineering, National Taiwan University of Science and Technology Manager, Tokyo Marine Newa Insurance, Co., Ltd Manager,Taiwan Fire & Marine Insurance Co.,Ltd	None	None	None	None

20 -

Title (Note 1) (Note 3)	Nationality/ Country of Origin	Name (Note 3)	Gender	Date Effective	Shareholding	Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience（Education） (Note 2)	Other Position	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship
					Shares	％	Shares	％	Shares	％			Title	Name	Relation
Senior Manager	R.O.C.	Stanley Fang	Male	`2015.02`	`5,000`	`0.00%`	`-`	`-`	`-`	`-`	BA, Department of Law, Fu Jen Catholic University Manager, TLG Insurance Manager, Taiwan Fire & Marine Insurance Co.,Ltd	None	None	None	None
Senior Manager	R.O.C.	Kent Lee	Male	`2015.02`	`30,132`	`0.01%`	`-`	`-`	`-`	`-`	MS, Tamkang University Department of Risk Management and Insurance Section Head, Taian Insurance Co., Ltd Manager, Taiwan Fire & Marine Insurance Co.,Ltd	None	None	None	None
Senior Manager	R.O.C.	Yung-Fu Su	Male	`2016.11`	`9,147`	`0.00%`	`-`	`-`	`-`	`-`	MS, Department of Economics, Ming Chuan University Manager, Taiwan Fire & Marine Insurance Co., Ltd	None	None	None	None
Senior Manager	R.O.C.	Stanley Chao	Male	`2016.11`	`-`	`-`	`-`	`-`	`-`	`-`	MS, Tamkang University Department of Risk Management and Insurance Manager, AIA Insurance Manager, Taiwan Fire & Marine Insurance Co., Ltd	None	None	None	None
Senior Manager	R.O.C.	Jeffrey C. Chen	Male	`2018.02`	`5,509`	`0.00%`	`-`	`-`	`-`	`-`	MS, Department of Management Science, National Chiao Tung University Deputy Manager, Taiwan Fire & Marine Insurance Co., Ltd Senior Vice President, Insurance Brokerage, Agricultural Bank of Taiwan	None	None	None	None
Senior Manager	R.O.C.	Chih-Hung Wang	Male	`2019.02`	`-`	`-`	`-`	`-`	`-`	`-`	MS, Department of Industrial Engineering and Engineering Management Deputy Manager, South China Insurance Co., Ltd Manager, Taiwan Fire & Marine Insurance Co., Ltd	None	None	None	None
Senior Manager	R.O.C.	Yu-Jen Hsiao	Male	`2019.02`	`-`	`-`	`-`	`-`	`-`	`-`	MS, Department of Labor Relations, National Chung Cheng University Manager,MSIG Mingtai Insurance Co.,Ltd	None	None	None	None
Senior Manager	R.O.C.	Ming-Fang Rao	Male	`2020.02`	`92,596`	`0.03%`	`-`	`-`	`-`	`-`	BS, Department of Corporate Insurance, Dahan Institute of Technology Manager, Taiwan Fire & Marine Insurance Co., Ltd	None	None	None	None
Senior Manager	R.O.C.	Chyi- Shyang Chio	Male	`2020.02`	`10,000`	`0.00%`	`-`	`-`	`-`	`-`	Department of Mechanical Engineering, Chien-Hsin Junior College Deputy Manager, Kuo Hua Insurance, Co., Ltd Manager, TLG Insurance Manager, Taiwan Fire & Marine Insurance Co.,Ltd	None	None	None	None

21 -

Title (Note 1) (Note 3)	Nationality/ Country of Origin	Name (Note 3)	Gender	Date Effective	Shareholding	Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience（Education） (Note 2)	Other Position	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship
					Shares	％	Shares	％	Shares	％			Title	Name	Relation
Senior Manager	R.O.C.	Jonathan Tu	Male	`2020.02`	`5,000`	`0.00%`	`-`	`-`	`-`	`-`	BS, Department of Business Administration, Ling Tung University Section Head, MSIG Mingtai Insurance Co., Ltd Manager, Taiwan Fire & Marine Insurance Co., Ltd	None	None	None	None
Senior Manager	R.O.C.	Chin-Ho Lin	Male	2021.02	`-`	`-`	`-`	`-`	`-`	`-`	MS, Mathematics, Applied Mathematics, Statistical Sciences, Department of Mathematics, National Chung Cheng University Manager, TLG Insurance Manager, Taiwan Fire & Marine Insurance Co., Ltd	None	None	None	None
Manager	R.O.C.	Chiu-Shan Chung	Male	`106.07`	`4,825`	`0.00%`	`-`	`-`	`-`	`-`	Master of Business Administration, National Chiayi University Section Head, Union Insurance Company Deputy Manager, Taiwan Fire & Marine Insurance Co.,Ltd	None	None	None	None
Manager	R.O.C.	Eric Hsu	Male	`2018.05`	`1,000`	`0.00%`	`-`	`-`	`-`	`-`	BS, Department of Information Management, Shih Hsin University Acting Manager, Taiwan Fire & Marine Insurance Co., Ltd Project Manager, Sirtec International Co., Ltd Manager,TLG Insurance Co.	None	None	None	None
Manager	R.O.C.	Wun-Bin, Hou	Male	`2019.02`	`14,000`	`0.00%`	`1,000`	`0.01%`	`-`	`-`	MS, Applied Statistics, Tamkang University Deputy Manager, Taiwan Fire & Marine Insurance Co.,Ltd	None	None	None	None
Manager	R.O.C.	Judy Liao	Female	`2019.09`	`4,031`	`0.00%`	`-`	`-`	`-`	`-`	MS, Tamkang University Department of Risk Management and Insurance Deputy Manager, Taiwan Fire & Marine Insurance Co.,Ltd	None	None	None	None
Manager	R.O.C.	April Wang	Female	`2019.09`	`-`	`-`	`-`	`-`	`-`	`-`	BA, Department of Sociology, National Chengchi University Deputy Manager, TLG Insurance Deputy Manager, Taiwan Fire & Marine Insurance Co.,Ltd	None	None	None	None
Manager	R.O.C.	Nan-Chou Liu	Male	`2019.09`	`-`	`-`	`-`	`-`	`-`	`-`	MS, Engineering Management Program, National Cheng Kung University Project Manager, Taiwan Fire & Marine Insurance Co.,Ltd	None	None	None	None

22 -

Title (Note 1) (Note 3)	Nationality/ Country of Origin	Name (Note 3)	Gender	Date Effective	Shareholding	Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience（Education） (Note 2)	Other Position	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship
					Shares	％	Shares	％	Shares	％			Title	Name	Relation
Manager	R.O.C.	Jason Su	Male	`2019.09`	`10,000`	`0.00%`	`-`	`-`	`-`	`-`	BBA, Department of Business Administration, Southern Taiwan University of Science and Technology Director of the Communications Division, AIA Insurance Deputy Manager, Taiwan Fire & Marine Insurance Co.,Ltd	None	None	None	None
Manager	R.O.C.	Ben Yu	Male	2020.09	`-`	`-`	`-`	`-`	`-`	`-`	MA, Department of Management, Fo Guang University Director, Zurich Insurance Group Ltd Deputy Manager of Union Insurance Company Manager, Business Division, Cathay Century Insurance Assistant Manager, Taiwan Fire & Marine Insurance Co.,Ltd	None	None	None	None
Manager	R.O.C.	Shang-Jen Tung	Male	2021.02	`-`	`-`	`-`	`-`	`-`	`-`	Graduated from the Institute of Engineering [Industrial Safety and Disaster Prevention], National Chiao Tung University Section Chief, Walsun Insurance Limited Deputy Manager, Taiwan Fire & Marine Insurance Co.,Ltd	None	None	None	None

Note 1: Shall include information regarding General Manager and Deputy General Manager, Associate Managers, Supervisors of Departments and Branch Agencies. Persons who hold positions equivalent to General Manager and Deputy General Manager, or Associate Managers shall also be disclosed.

Note 2: For the current positions in the accounting firm or affiliates in the first term mentioned above, please explain the titles and duties of such positions.

Note 3: If the President or equivalent (the top manager) are the same person as the Chairman, or are spouses or relatives within the first degree of kinship, the reasons, rationality, necessity, and corresponding measures (such as increasing the number of Independent Directors and having more than half of the Directors who do not serve as employees or managers, etc.) shall be explained: None.

Note 4: ﹝ - ﹞ in the table means ﹝ 0 ﹞

23 -

3.2.3 Remuneration of Directors, Supervisors, President, and Vice President Remuneration of Directors

Unit； NT$ thousan dsTitle	Name (Note 1)			Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Ratio of Total Remuneration (A+B+C+D) to Net Income (%) (Note10)	Ratio of Total Remuneration (A+B+C+D) to Net Income (%) (Note10)	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Ratio of Total Compensation (A+B+C+D+E+ F+G)to Net Income (%) (Note10)	Ratio of Total Compensation (A+B+C+D+E+ F+G)to Net Income (%) (Note10)	Compensati on paid to Directors from an invested company other than the Company's subsidiaries or parent company (Note11)
		Base Compensation (A) (Note2)		Severance Pay (B)		Bonus to Directors(C) (Note3)		Allowances (D) (Note4)				Salary, Bonuses, and Allowances (E) (Note5)		Severance Pay (F)		Profit Sharing- Employee Bonus (G) (Note6)
		The company	All companies in the consolidated financial statements (Note7)	The company	All companies in the consolidate d financial statements (Note7)	The company	All companies in the consolidate d financial statements (Note7)	The company	All companies in the consolidate d financial statements (Note7)	The company	All companies in the consolidated financial statements (Note7)	The company	All companies in the consolidated financial statements (Note7)	The company	All companies in the consolidated financial statements (Note7)	The company		Companie s in the consolidat ed financial statements		The company	Companies in the consolidate d financial statements (Note7)
																Cash	Stock	Cash	Stock
Director	Yong-Shin Development Co.,Ltd.	10,903	10,903	-	-	20,340	20,340	927	927	4.68	4.68	8,815	8,815	-	-	-	-	-	-	5.96	5.96	None
Director	Bank of Taiwan Co., Ltd.																					None
Chairman	Steve Lee																					None
Chairman	Yong-Shin Development Co., Ltd. Representative: Steve Lee																					None
Director	Yong-Shin Development Co., Ltd. Representative: Charles Sung																					None
Director	Yong-Shin Development Co., Ltd. Representative: Chung-Chou Chang																					None
Director	Yong-Shin Development Co., Ltd. Representative: Bin-Fu Chen																					None
Director	Yong-Shin Development Co., Ltd. Representative: Julie Lee (Note 12)																					None
Director	Yong-Shin Development Co., Ltd. Representative: Chain-Cheng Lee(Note 13)																					None

24 -

Title	Name (Note 1)	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Ratio of Total Remuneration (A+B+C+D) to Net Income (%) (Note10)	Ratio of Total Remuneration (A+B+C+D) to Net Income (%) (Note10)	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Ratio of Total Compensation (A+B+C+D+E+ F+G)to Net Income (%) (Note10)	Ratio of Total Compensation (A+B+C+D+E+ F+G)to Net Income (%) (Note10)	Compensati on paid to Directors from an invested company other than the Company's subsidiaries or parent company (Note11)
		Base Compensation (A) (Note2)		Severance Pay (B)		Bonus to Directors(C) (Note3)		Allowances (D) (Note4)				Salary, Bonuses, and Allowances (E) (Note5)		Severance Pay (F)		Profit Sharing- Employee Bonus (G) (Note6)
		The company	All companies in the consolidated ~~f~~inancial statements (Note7)	The company	All companies in the consolidate d financial statements (Note7)	The company	All companies in the consolidate ~~d~~financial statements (Note7)	The company	All companies in the consolidate d financial statements (Note7)	The company	All companies in the consolidated financial statements (Note7)	The company	All companies in the consolidated financial statements (Note7)	The company	All Companies in the consolidated financial statements (Note7)	The company		Companies in the consolidated financial statements		The company	Companies in the consolidate d financial statements (Note7)
																Cash	Stock	Cash	Stock
Director	Bank of Taiwan Co., Ltd. Representative: Mei-Ling Wu																					None
Director	Bank of Taiwan Co., Ltd. Representative: Wen-Chang Chen																					None
Director	Bank of Taiwan Co., Ltd. Representative: Chin-Hsien, Chiu (Note 14)																					None
Director	Bank of Taiwan Co., Ltd. Representative: Tze-Yue Chen(Note 15)																					None
Independent Director	Tien-Sung Lee(Note 16)	) 2,98 5	2,985	-	-	-	-	1,570	1,570	0.66	0.66	-	-	-	-	-	-	-	-	0.66	0.66	None
Independent Director	Yeong-Tsong Shaw(Note 16																					None
Independent Director	Jimmy T. Hsieh																					None
Independent Director	Cheng Ching Huang (Note 17)																					None
Independent Director	Nien-Tsu Chiang (Note 17)																					None
1. Please state the payment policy, system, standards and structure for the remuneration of Independent Directors, and describe the relevance to the amount of remuneration according to the responsibilities, risks, t do not participate in the distribution of directors' remuneration. The remuneration is determined in consideration of the Company’s overall operating performance, future business risks and development trends o company’s performance. Related performance evaluation and remuneration reasonableness are reviewed by the Remuneration Committee and the Board of Directors and the remuneration system is reviewed in and regulations, in order to strike a balance between the company's sustainable operations and risk control. 2. Remuneration to Directors for rendering services (such as consultants) in favor of the companies included in the financial statements in the most recent year other than the disclosures in the above table：None.																ime invested and other factors: The Independent Director f the industry, as well as individual performance and contr a timely manner based on the actual operating conditions						s of the company ibution to the and relevant laws

Please state the payment policy, system, standards and structure for the remuneration of Independent Directors, and describe the relevance to the amount of remuneration according to the responsibilities, risks, time invested and other factors: The Independent Directors of the company do not participate in the distribution of directors' remuneration. The remuneration is determined in consideration of the Company’s overall operating performance, future business risks and development trends of the industry, as well as individual performance and contribution to the company’s performance. Related performance evaluation and remuneration reasonableness are reviewed by the Remuneration Committee and the Board of Directors and the remuneration system is reviewed in a timely manner based on the actual operating conditions and relevant laws and regulations, in order to strike a balance between the company's sustainable operations and risk control.
Remuneration to Directors for rendering services (such as consultants) in favor of the companies included in the financial statements in the most recent year other than the disclosures in the above table[：] None.

Note: The total remuneration for drivers in the year 2020 is 1,056,000.

25 -

Range of Remuneration	Name of Directors	Name of Directors	Name of Directors	Name of Directors
	Total of(A+B+C+D)		Total of(A+B+C+D+E+F+G)
	The company	Companies in the consolidated financial statements (Note 9)	The company (Note8)	Companies in the consolidated financial statements (Note8)
Under NT$1,000,000	Yong-Shin Development Co., Ltd. Representative： Chung-Chou Chang、 Charles Sung、 Julie Lee、 Bin-Fu Chen、 Chain-Cheng Lee Bank of Taiwan Co., Ltd. Representative： Mei-Ling Wu Wen-Chang Chen Chin-Hsien, Chiu Tze-Yue Chen Independent Director： Tien-Sung Lee、 Yeong-Tsong Shaw	Yong-Shin Development Co., Ltd. Representative： Chung-Chou Chang、 Charles Sung、 Julie Lee、 Bin-Fu Chen、 Chain-Cheng Lee Bank of Taiwan Co., Ltd. Representative： Mei-Ling Wu Wen-Chang Chen Chin-Hsien, Chiu Tze-Yue Chen Independent Director： Tien-Sung Lee、 Yeong-Tsong Shaw	Yong-Shin Development Co., Ltd. Representative： Chung-Chou Chang、 Bin-Fu Chen、 Chain-Cheng Lee Bank of Taiwan Co., Ltd. Representative： Mei-Ling Wu Wen-Chang Chen Chin-Hsien, Chiu Tze-Yue Chen Independent Director： Tien-Sung Lee、 Yeong-Tsong Shaw	Yong-Shin Development Co., Ltd. Representative： Chung-Chou Chang、 Bin-Fu Chen、 Chain-Cheng Lee Bank of Taiwan Co., Ltd. Representative： Mei-Ling Wu Wen-Chang Chen Chin-Hsien, Chiu Tze-Yue Chen Independent Director： Tien-Sung Lee、 Yeong-Tsong Shaw
NT$1,000,000 (inclusive)~ NT$2,000,000 (exclusive)	Independent Director： Jimmy T. Hsieh Cheng Ching Huang Nien-Tsu Chiang	Independent Director： Jimmy T. Hsieh Cheng Ching Huang Nien-Tsu Chiang	Yong-Shin Development Co., Ltd. Representative：Julie Lee Independent Director： Jimmy T. Hsieh Cheng Ching Huang Nien-Tsu Chiang	Yong-Shin Development Co., Ltd. Representative：Julie Lee Independent Director： Jimmy T. Hsieh Cheng Ching Huang Nien-Tsu Chiang
NT$2,000,000 (inclusive) ~ NT$3,500,000 (exclusive)	-	-	-	-
NT$3,500,000 (inclusive)~ NT$5,000,000 (exclusive)	Steve Lee	Steve Lee	Steve Lee	Steve Lee
NT$5,000,000 (inclusive)~ NT$10,000,000 (exclusive)	Bank of Taiwan Co., Ltd. Yong-Shin Development Co., Ltd. Representative：Steve Lee	Bank of Taiwan Co., Ltd. Yong-Shin Development Co., Ltd. Representative：Steve Lee	Bank of Taiwan Co., Ltd. Yong-Shin Development Co., Ltd. Representative：Steve Lee、 Charles Sung	Bank of Taiwan Co., Ltd. Yong-Shin Development Co., Ltd. Representative：Steve Lee、 Charles Sung
NT$10,000,000 (inclusive) ~ NT$15,000,000 (exclusive)	Yong-Shin Development Co., Ltd.	Yong-Shin Development Co., Ltd.	Yong-Shin Development Co., Ltd.	Yong-Shin Development Co., Ltd.
NT$15,000,000(inclusive)~ NT$30,000,000(exclusive)	`-`	`-`	`-`	`-`
NT$30,000,000(inclusive)~ NT$50,000,000(exclusive)	`-`	`-`	`-`	`-`
NT$50,000,000(inclusive)~ NT$100,000,000(exclusive)	`-`	`-`	`-`	`-`
Over NT$100,000,000	`-`	`-`	`-`	`-`
Total	`18`	`18`	`18`	`18`

26 -
Note 1: The name of directors shall be listed separately (for institutional shareholders, the name of institutional shareholders and representative shall be listed separately), and the payments shall be disclosed collectively. If a director also serves as a General Manager or Deputy General Manager, he/she should fill up this form and the (3-1) or (3-2) below.
Note 2: Remuneration of directors in the most recent year (including salaries, professional allowance, severance pay, bonuses, and performance fees).
Note 3: Remuneration paid to directors in the most recent year upon the approval of Board of Directors.
Note 4: Business expenses paid out to directors in the most recent year (including transport, special expenses, various allowances, accommodation, vehicles, and provision of physical goods and services). If housing, vehicle or other means of transportation, or personal expense is provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, please note the remuneration paid to such driver. However, such remuneration shall not be included.
Note 5: Remuneration for directors concurrently holding positions in the Company (for positions that include the General Manager and Deputy General Manager, other managerial officers, or employees) shall include salaries, job remuneration, severance, bonuses, performance fees, transport fees, special expenses, various subsidies, accommodation, vehicles, and provision of physical items and services. If housing, vehicle or other means of transportation, or personal expense is provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed.
If a driver is provided, please note the remuneration paid to such driver. However, such remuneration shall not be included. Furthermore, any compensation recognized in the IFRS 2 Share-Based Payment section, including issuance of employee stock options, new restricted employee shares and capital increase by stock subscription, should be included in the calculation of remuneration.
Note 6: For directors concurrently holding positions in the Company in 2018 (including the General Manager, Deputy Manager, other managerial officers, or employees) and receiving the remuneration (including stock and cash), the employee remuneration paid in 2018 upon the approval of the Board of Directors shall be disclosed. If such remuneration cannot be estimated, the remuneration to be distributed in 2018 shall be based on the proportion of the remuneration distributed last year and filled in Schedule 1-3.
Note 7: Total remuneration in various items paid out to the Company directors by all companies (including this Company) listed in the consolidated statement shall be disclosed. Note 8: For the total remuneration in various items paid out to the Company directors, the name of each director shall be disclosed in the corresponding range of the remuneration. Note 9: Total remuneration in various items paid to every director of this Company by all companies (including this Company) listed in the consolidated statement shall be disclosed. The name of the director shall also be disclosed in the proper remuneration range.
Note 10: Net income refers to the net income in 2017; if IFRS is adopted, the net income refers to the net income in parent Company only or individual financial report in 2017. Note 11: a. Compensations received by the directors from other non-subsidiary companies invested by the Company shall be disclosed in this column.
b. If the director receives remuneration from investments in other companies that are not subsidiaries of this Company, the said remuneration shall be included in Column J in the remuneration range table. The name of the column shall also be changed to “All investments in other companies”.
c. Remuneration refers to the compensation, rewards (including rewards distributed to employees, directors and supervisors) and remuneration related to business expenses that are received by the company's directors who serve as directors, supervisors or managerial officers at investment companies other than subsidiaries.
Note 12 ： Dismissal on November 11, 2020
Note 13 ： Appointment on November 11, 2020
Note 14 ： Dismissal on January 16, 2020
Note 15 ： Appointment on January 21, 2020
Note 16 ： Dismissal on June 12, 2020
Note 17 ： Appointment on June 12, 2020

Note 18 ：﹝ - ﹞ in the table means ﹝ 0 ﹞ .

＊ The content of compensation disclosed in this table is derived based on a concept different from the the concept of income stipulated in the Income Tax Act. The purpose of the table is for the disclosure of information, instead of taxation.

Remuneration of Supervisors: None

27 -

Remuneration of the President and Vice President

												Unit；NT$ thousands	Unit；NT$ thousands	Unit；NT$ thousands
Title	Name (Note1)	Salary(A) (Note2)		Severance Pay (B)		Bonuses and Allowances (C) (Note3)		Profit Sharing- Employee Bonus (D) (Note4)				Ratio of total compensation(A+B+C+D) to net income (%)(Note8)		Compensation paid to Directors from an invested company other than the Company's subsidiaries or parent company (Note9)
		The company	Companies in the consolidated financial statements (Note5)	The company	Companies in the consolidated financial statements (Note5)	The company	Companies in the consolidated financial statements (Note5)	The company		Companies in the consolidated financial statements (Note5)		The company	Companies in the consolidated financial statements (Note5)
								Cash	Stock	Cash	Stock
President	Charles Sung (Note10)	`18,648`	`18,648`	`474`	`474`	`7,971`	`7,971`	`723`	`-`	`723`	`-`	`4.05`	`4.05`	None
Executive Vice President	Chao-Feng Chen (Note11)													None
Senior Vice President	Nicholas N.C. Sheu													None
General Auditor	Su-Chen Lin													None
Chief Compliance Officer	Hsien-Chang Huang													None
Senior Vice President	Andrew Hsieh													None
Senior Vice President	Allen Cheng													None
Senior Vice President	Chia-Lin Sheu													None
Senior Vice President	Tsui-Jung Chen													None

Note: The total remuneration for drivers in the year 2020 is 1,009,000.

28 -

Range of Remuneration	Name of President and Senior Vice Presidents	Name of President and Senior Vice Presidents
	The company (Note6)	Companies in the consolidated financial statements (Note7)
Under NT$1,000,000	`-`	`-`
NT$1,000,000 (inclusive)~NT$2,000,000 (exclusive)	Su-Chen Lin	Su-Chen Lin
NT$2,000,000 (inclusive) ~ NT$3,500,000 (exclusive)	Nicholas N.C. Sheu Hsien-Chang Huang Andrew Hsieh Allen Cheng Chia-Lin Sheu Tsui-Jung Chen	Nicholas N.C. Sheu Hsien-Chang Huang Andrew Hsieh Allen Cheng Chia-Lin Sheu Tsui-Jung Chen
NT$3,500,000 (inclusive)~NT$5,000,000 (exclusive)	Chao-FengChen	Chao-FengChen
NT$5,000,000 (inclusive)~NT$10,000,000 (exclusive)	Charles Sung	Charles Sung
NT$10,000,000(inclusive)~ NT$15,000,000(exclusive)	-	-
NT$15,000,000(inclusive)~ NT$30,000,000(exclusive)	-	-
NT$30,000,000(inclusive)~ NT$50,000,000(exclusive)	-	-
NT$50,000,000 (inclusive) ~ NT$100,000,000(exclusive)	-	-
Over NT$100,000,000	-	-
Total	`9`	`9`

＊ Disclosure is required regardless of the occupational title. Positions that are equivalent to the presidency and senior vice presidency (such as President, CEO, Director and so forth) should be disclosed.
Note 1: The names of President and Senior Vice Presidents shall be listed separately and the payments shall be disclosed collectively. If a director also serves as a President or Senior Vice Presidents, he/she should fill this form and (1-1) or (1-2) above.
Note 2: President and Senior Vice Presidents’s compensations in the most recent year (including salary, professional compensation and severance).
Note 3: Compensations of President and Senior Vice Presidents concurrently holding positions in the Company shall include bonuses, performance fees, transport fees, special expenses, various subsidies, accommodation, vehicles, and provision of physical items and services. If housing, vehicle or other means of transportation, or personal expense is provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, please note the remuneration paid to such driver. However, such remuneration shall not be included. Furthermore, any compensation recognized in the IFRS 2 Share-Based Payment section, including issuance of employee stock options, new restricted employee shares and capital increase by stock subscription, should be included in the calculation of remuneration.
29 -
Note 4: Employee compensations (including shares and cash) given to President and Senior Vice Presidents as approved by the Board of Directors for the most recent fiscal year shall be disclosed. But in case an estimated figure cannot be derived, this year's budgeted compensations shall be calculated based on last year's actual compensations. Please fill Schedule 1-3 with related information. Net profit refers to the after-tax net income for the most recent fiscal year; for those that have already adopted the IFRS principles, net profit refers to the after-tax net income in individual or consolidated financial reports for the most recent fiscal year.
Note 5: Total compensations of various items paid out to this Company's President and Senior Vice Presidents by all companies (including this Company) listed in the consolidated statement shall be disclosed.
Note 6: Names of the Company's President and Senior Vice Presidents shall be disclosed in the range corresponding to the total of compensations paid to them.
Note 7: Total compensation of various items paid to every President and Senior Vice Presidents of this Company by all companies (including this Company) listed in the consolidated statement shall be disclosed. The name of the President and Senior Vice Presidents shall also be disclosed in the proper compensation range.
Note 8: Net income refers to the after-tax net income for the most recent fiscal year; for those that have already adopted the IFRS principles, net income refers to the after-tax net income in individual or consolidated financial reports for the most recent fiscal year.
Note 9: a. Compensations of the Company's President and Senior Vice Presidents received from other non-subsidiary companies invested by this Company shall be disclosed in this column.
b. If the President and Senior Vice Presidents of the Company receives remuneration from investment companies other than subsidiaries, the amount of remuneration received by the President and Senior Vice Presidents from investment companies other than subsidiaries shall be combined into Column E of the table for ranges of remuneration, and this column shall be renamed as "All Investment Companies".
(Merge)
c. Remuneration refers to the compensation, rewards (including rewards distributed to employees, directors and supervisors) and remuneration related to business expenses that are received by the company's President and Senior Vice Presidents who serve as directors, supervisors or managerial officers at investment companies other than subsidiaries.
Note 10: New appointment since January 1, 2021
Note 11: New appointment since January 1, 2021
Note 12: ﹝ - ﹞ in the table means ﹝ 0 ﹞ .
The amount of remuneration disclosed in this form is based on estimates and accruals, therefore, the purpose of the table is for the disclosure of information, instead of taxation.
30 -

Employee Bonus to Executive Officers

					Unit: NT$thousands	Unit: NT$thousands
	Title (Note 1)	Name (Note 1)	Employee Bonus - in Stock (Fair Market Value)	Employee Bonus - in Cash	Total	Ratio of Total Amount to Net Income (%)
Executive Officers	Executive Vice President	Chao-FengChen(Note 5)	`-`	`2,637`	`2,637`	`0.38`
	Senior Vice President	Nicholas N.C. Sheu
	General Auditor	Su-Chen Lin
	Chief Compliance Officer	Hsien-ChangHuang
	Senior Vice President	Chia-Lin Sheu
	Senior Vice President	Tsui-JungChen
	Senior Vice President	Andrew Hsieh
	Senior Vice President	Allen Cheng
	Vice President	Chih-Chieh Huang
	Vice President	Hsin-Chu Lin
	Vice President	Jack Chung
	Vice President	Yuan-Yi Liao
	Senior Manager	Jih-Min Chan
	Senior Manager	StanleyFang
	Senior Manager	Yung-Fu Su
	Senior Manager	JeffreyC. Chen
	Senior Manager	Hong-HsingChuang (Note 6)
	Senior Manager	Kent Lee
	Senior Manager	Chih-HungWang
	Senior Manager	Yu-Jen Hsiao
	Senior Manager	StanleyChao
	Senior Manager	Chyi-ShyangChio
	Senior Manager	Jonathan Tu
	Senior Manager	Steven Lin (Note 6)
	Senior Manager	Ming-FangRao
	Manager	Eric Hsu
	Manager	Nan-Chou Liu
	Manager	JudyLiao
	Manager	April Wang
	Manager	Chin-Ho Lin (Note 7)
	Manager	Wun-Bin Hou
	Manager	Chiu-Shan Chung
	Manager	Jason Su
	Manager	Ben Yu
	AccountingManager	Pi-Chen Wang

Note 1: Individual names and titles shall be disclosed, but compensations received can be disclosed as total sum. Note 2: Employee compensations (including shares and cash) given to managers as approved by the Board of Directors for the most recent fiscal year shall be disclosed. But in case an estimated figure cannot be derived, this year's budgeted compensations shall be calculated based on last year's actual compensation distribution proportion. After-tax net income refers to the after-tax net income for the most recent fiscal year; for those that have already adopted the IFRS principles, after-tax net income refers to the after-tax net income in parent company only or individual financial reports for the most recent fiscal year. After-tax net income

Note 3: The scope of the term "manager" will be applied based on the below standards as stated by Memorandum No. 0920001301 issued on Mar. 27, 2003 by the TPEX:

(1) President and its equivalent (2) Senior Vice President and its equivalent

(3) Vice President and its equivalent (4) Supervisor of Finance Department

(5) Supervisor of Accounting Department (6) Other personnel authorized to manage Company operations and sign for approval.

Note 4: If Directors, President or Senior Vice President have received employee compensations (including

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shares and cash), this form shall be filled out in addition to table 1 -2. Note 5: New appointment since January 1, 2021 Note 6: New appointment since February 1, 2021 Note 7: New appointment since February 1, 2021 Note 8:﹝-﹞ in the table means ﹝0﹞

3.2.4 Comparison of Remuneration for Directors, Supervisors, Presidents and Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, Presidents and Vice Presidents

Analysis of Ratio of Total Compensations Paid to Directors, Supervisors, the President and Vice Presidents by the Company and All Companies Listed in the Consolidated Financial Statements to Net Income in the Most Recent Two Years

	Net income to net income after tax in 2020 Net profit ratio (%) - The Company (proposed number)	Net income to net income after tax in 2020 Net profit ratio (%) - consolidated in the financial statement The Company (proposed number)	Net income to net income after tax in 2019 The net income after tax ratio (%) - The Company	Net income to net income after tax in 2019 The net income after tax ratio (%) - consolidated in the financial statement Company
Directors	6.62	6.62	6.14	6.14
Supervisors (Note)	-	-	-	-
Presidents and Vice Presidents	4.05	4.05	3.42	3.42

Note: The Company set up an Audit Committee on June 6, 2014 to replace the supervisor function, so it was not applicable since 2015.

Policies, Standards and Packages of Director Remuneration, as well as Procedures for Determining Remuneration, and Its Correlations with Business Performance and Future Risk Exposure

Reasonable remuneration are paid to Directors in accordance with Article 35-1 of the Company's Corporate Charter which stipulates that "If the Company posts a profit in a particular year, one (1) percent to five (5) percent of the profit shall be distributed as employee bonus, whereas less than five (5) percent of the profit shall be distributed as Directors remuneration (excluding Independent Directors)...", this is to combine the Company's operating performance and Directors' contributions to the Company's performance to provide remuneration for the Directors. Salaries are paid to the President and senior Vice President in accordance with the Company's Rules Governing the Management of Compensation for Managerial Officers, and by taking into consideration the salary level of the position in the industry to which the Company belongs, the scope of duties within the Company and the manager’s contributions to the Company's operating goals. Rules related to performance appraisal for the Company's Directors and managerial officers serve as the basis for determining remuneration. In addition to the Company's overall operating performance, the future operating risks and development trend of the industry, an individual's performance accomplishments and his/her contributions to the Company's performance shall also be taken into account in order to determine reasonable remuneration. The Remuneration Committee and the Board of Directors shall review related performance appraisal and the reasonableness of the remuneration determined. The Company's remuneration procedure shall be reviewed periodically, based on the actual business performance and the relevant laws and regulations to maintain a balance between the Company's sustainable business continuity and risk control.

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3.3 Implementation of Corporate Governance 3.3.1 Board of Directors

A total of seven (A) meetings of the Board of Directors were held in the previous period. The attendance of director and supervisor were as follows:

Title	Name	Attendance in Person (B)	By Proxy	Attendance Rate (%)【Ｂ/Ａ】	Remarks
Chairman	Yong-Shin Development Co., Ltd. `Representative: Steve Lee`	`3`	`0`	`100`	Dismissal 2020.06.12
Chairman	Steve Lee	`4`	`0`	`100`	New appointment `2020.06.12`
Director	`Yong-Shin Development Co., Ltd.` `Representative: Charles Sung`	`7`	`0`	`100`	Reappointment 2020.06.12
Director	Yong-Shin Development Co., Ltd. `Representative: Chung-Chou Chang`	`7`	`0`	`100`	Reappointment `2020.06.12`
Director	`Yong-Shin Development Co., Ltd.` `Representative: Bin-Fu Chen`	`6`	`1`	`86`	Reappointment `2020.06.12`
Director	`Yong-Shin Development Co., Ltd.` `Representative: Julie Lee`	`6`	`0`	`100`	Dismissal `2020.11.11`
Director	`Yong-Shin Development Co., Ltd.` `Representative: Chain-Cheng Lee`	`1`	`0`	`100`	New appointment `2020.11.11`
Director	Bank of Taiwan Co., Ltd. `Representative: Wen-Chang Chen`	`7`	`0`	`100`	Reappointment `2020.06.12`
Director	Bank of Taiwan Co., Ltd. `Representative: Mei-Ling Wu`	`7`	`0`	`100`	Reappointment 2020.06.12
Director	Bank of Taiwan Co., Ltd. `Representative: Tze-Yue Chen` `(Note)`	`6`	`0`	`100`	Reappointment `2020.06.12`
Independent Director	`Tien-Sung Lee`	`3`	`0`	`100`	Dismissal `2020.06.12`
Independent Director	`Yeong-Tsong Shaw`	`3`	`0`	`100`	Dismissal `2020.06.12`
Independent Director	`Cheng Ching Huang`	`4`	`0`	`100`	New appointment `2020.06.12`
Independent Director	Nien-Tsu Chiang	`4`	`0`	`100`	New appointment `2020.06.12`
Independent Director	`Jimmy T. Hsieh`	`6`	`1`	`86`	Reappointment `2020.06.12`

Note: Bank of Taiwan Co., Ltd. changed its Board representative to Ms. Tze-Yue Chen on January 21, 2020. She should attend Board Meetings for 6 times after the appointment.

Attendance of Independent Directors to the sessions of the Board in 2020

◎：in person; ☆ : by proxy;＊: Absent;

the 23th meeting of the 25th Board of Directors (1/20/2020)	the 24th meeting of the 25th Board of Directors (3/20/2020)	the 25th meeting of the 25th Board of Directors (4/30/2020)	the 1st meeting of the 26th Board of Directors (6/12/2020)	the 2nd meeting of the 26th Board of Directors (8/28/2020)	the 3rd meeting of the 26th Board of Directors (10/30/2020)	the 4th meeting of the 26th Board of Directors (12/25/2020)
-	-	-	◎	◎	◎	◎
-	-	-	◎	◎	◎	◎
◎	☆	◎	◎	◎	◎	◎
◎	◎	◎	-	-	-	-
◎	◎	◎	-	-	-	-

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Other required disclosure:

I. If the operation of the Board of Directors includes one of the following circumstances, the date, period of the Board of Directors, the contents of proposals, all Independent Directors' opinion and the reaction toward Independent Directors' opinions by the Company shall be specified.
(I)All conditions listed in Article 14-3 of the Securities and Exchange Act.

Board of Directors Term and Date	Proposal	Items specified in Article 14-3 of the Securities and Exchange Act	Adverse opinions or qualified opinions of the Independent Directors
25th Board of Directors 23th Meeting (2020/01/20)	Resolution of the proposals in the meeting minutes of the 9rd meeting of the 3rd RemunerationCommittee.	`V`	No
	Opinions of Independent Directors: no. The response of the Company to the opinions of the Independent Directors: no. Resolution: the Board acted in favor of the motion as stated in common consent.
25th Board of Directors 24th Meeting (2020/03/20)	1.Resolution for appointing the CPAs Wang-Sheng Lin and Wen-Yea Shyu of Deloitte, Taiwan to audit the 2020 financial and taxation statements and their remuneration.	`V`	No
	2.Resolution of the proposals in the meeting minutes of the 10rd meeting of the 3rd Remuneration Committee.	`V`	No
	Opinions of Independent Directors: no. The response of the Company to the opinions of the Independent Directors: no. Resolution: the Board acted in favor of the motion as stated in common consent.
25th Board of Directors 25th Meeting (2020/04/30)	1.Resolution for approval to discharge Director from Non-Compete Restrictions	`V`	No
	2.Resolution of the 2020 Company Audit Plan.	`V`	No
	Opinions of Independent Directors: no. The response of the Company to the opinions of the Independent Directors: no. Resolution: the Board acted in favor of the motion as stated in common consent.
~~26th Board of~~ Directors 2nd Meeting (2020/08/28)	~~Resolution for the donation to "Taiwan Fire~~ & Marine Foundation".	`V`	~~No~~
		`V`	No
	Opinions of Independent Directors: no. The response of the Company to the opinions of the Independent Directors: no. Resolution: the Board acted in favor of the motion as stated in common consent.
Board of	Proposal	Items	Adverse

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Directors Term and Date		specified in Article 14-3 of the Securities and Exchange Act	opinions or qualified opinions of the Independent Directors
26th Board of Directors 4th Meeting (2020/12/25)	1.Resolution of the amendments to the "InternalControlSystem"	`V`	No
	2.Resolution of the 2021 Company Audit Plan.	`V`	No
	Opinions of Independent Directors: no. The response of the Company to the opinions of the Independent Directors: no. Resolution: the Board acted in favor of the motion as stated in common consent.
26th Board of Directors 7th Meeting (2021/03/26)	1. Resolution of the 2020 Internal Control System Statement.	`V`	No
	2. Resolution of the 2020 overall implementation status of the information security system statement.	`V`	No
	`3.`Approval for investment in Abico Asia Capital II Excellence Transformation and Growth Limited Partnership Venture Capital Fund.	`V`	No
	4. Resolution for appointing the CPAs Wang-Sheng Lin and Wen-Yea Shyu of Deloitte, Taiwan to audit the 2021 financial and taxation statements and their remuneration.	`V`	No
	5. Resolution of the proposals in the meeting minutes of the 3rd meeting of the 4rd RemunerationCommittee.	`V`	No
	Opinions of Independent Directors: no. The response of the Company to the opinions of the Independent Directors: no. Resolution: the Board acted in favor of the motion as stated in common consent.

(II)In addition to the preceding matter, other resolutions of the Board of Directors on which independent directors have dissenting opinions or qualified opinions, and that are documented or issued through written statements: None
II. In regards to the recusal of independent directors from voting due to conflict of interests, the name of the independent directors, the proposal, reasons for recusal due to conflict of interests and voting outcomes should be stated:
(I) The 23rd meeting of the 25th term Board of Directors: Reviewed the minutes and records of various proposals brought forth at the 9th meeting of the 3rd term Remuneration Committee. This proposal is in relation to the remuneration of Chairman Steve Lee, Director Charles Sung and Director Julie Lee as concurrent employees. Disclosures of the materiality of the interested parties have been made, and interested parties have recused themselves from discussion and voting.
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(II) The 24th meeting of the 25th term Board of Directors: Reviewed the minutes and records of various proposals brought forth at the 10th meeting of the 3rd term Remuneration Committee. In the case of the distribution of Directors' remuneration, the Directors recused themselves from the discussion and voting on the proposal in accordance with the relevant regulations in respect of the parts in which they or the legal entities they represent have an interest.
(III) The 25th meeting of the 25th term Board of Directors: The Company intends to nominate and examine the list of candidates for the 26th term of the Company's Directors, and the nominees will be examined one by one; if the nominee is an incumbent Director, the Director and other representative Directors of the corporate shareholder he/she represents have stated the material content of his/her interest and recused themselves from the discussion and voting on his/her nomination. The spouse and blood relatives within the second degree of kinship of Chairman Steve Lee are the responsible persons of Yung Shin Development Co., Ltd. Chairman Steve Lee has stated the materiality of his interest, as has the representative Director of YungShin Development Co., Ltd. Both have recused themselves when discussing and voting on the nomination of Chairman Steve Lee and the representative director of YungShin Development Co. The proposed release of the 26th term Directors of the Company from Non-compete Clauses. The proposal pertains to the release of Bank of Taiwan Corporation and its representatives, Director Wen-Chang Chen, Director Mei-Ling Wu, and Director Tze-Yue Chen from non-compete restrictions. Director Wen-Chang Chen and the two aforementioned Directors have stated the materiality of their interests and recused themselves from the discussion and voting. In the proposal of the 2020 Annual Audit Plan, Director Charles Sung, who is the President of the Company, and Director Julie Lee, who is employed at the International Business Division of the Company, are the subjects of the audit review, and have stated the materiality of his interests and recused himself from the discussion and voting. In the appointment of the new President, this prosal discusses the term of director Charles Sung as the Company’s President. The materiality of his interests has been stated and he has recused himself during the discussion and voting.
(IV) The 2nd meeting of the 26th Board of Directors: In the proposed donation to the TFMI Foundation, Company Chairman Steve Lee serves as the Chairman of the Foundation, and Director Charles Sung and director Julie Lee both serve as Directors of the Foundation. The Directors have stated the materiality of their interests, and recused themselves during the discussion and voting. Reviewed the minutes and records of the various proposals brought forth at the 1st meeting of the 4th term Remuneration Committee. When discussing the remuneration of the 26th term non-independent Directors, all the non-independent Directors have stated the materiality of their interests and recused themselves during the discussion and voting. When discussing the remuneration distribution of 26th term independent Directors, all independent Directors have stated the materiality of their interests and recused themselves during the discussion and voting.
(V) The 4th Meeting of the 26th term Board of Directors: For the 2021 Annual Audit Plan, Director Charles Sung serves as the President of the Company, and is the subject of audit. He has stated the materiality of his interests and recused himself during the discussion and voting.
(VI) The 5th meeting of the 26th term Board of Directors: Reviewed the minutes and records of various proposals brought forth during the 2nd meeting of the 4th Remuneration Committee. When discussing salary and remuneration proposals of Director Chien-Cheng Li, he stated the materiality of his interests and recused himself during the discussion and voting. When discussing the salary and remuneration of Vice Chairman Charles Sung, he stated the materiality of his interests and recused himself during the discussion and voting.
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When discussing the salary and remuneration of Chairman Steve Lee, he stated the materiality of his interests and recused himself during the discussion and voting.

(VII) The 7th meeting of the 26th term Board of Directors: With regards to the proposed authorization to invest in Abico Asia Capital II Excellence Transformation and Growth Limited Partnership Venture Capital Fund, Bank of Taiwan Co., Ltd. serves as a Director of Mega Financial Holding Company, whose 100% wholly-owned subsidiary Mega International Commercial Bank is a limited partner expected to participate in the fund. Therefore Bank of Taiwan representatives Director Wen-Chang Chen, Director Mei-Ling Wu, and Director Tze-Yue Chen stated the materiality of their interests and recused themselves during the discussion and voting. Reviewed the minutes and records of the various proposals brought forth at the 3rd meeting of the 4th term Remuneration Committee. When discussing the distribution of Directors’ remuneration in 2020, all non-independent Directors have stated the materiality of their interests and recused themselves during the discussion and voting. When discussing the salary and remuneration of Director Su-Chu Hsu, she stated the materiality of her interests and recused herself during the discussion and voting.
III.The information regarding evaluation cycle and frequency, evaluation scope, method and evaluation content by ownself (or peer) according to the Board of Directors, please refer to page 29 for the implementation of the Board.
IV.Goals (e.g., establishing an Audit Committee, enhancing information transparency) primed to enhance the Board of Directors’ professionalism and the assessment on their execution process for the year and the most recent year:
(I)The Company established the Audit Committee on June 6, 2014 and 5 meetings of the Audit Committee were convened in 2020.
(II)The Company adopted the candidate nomination system for the election of the 26th-term Directors and completed the election on June 12, 2020.
(III)The Company established the "Ethical Corporate Management Committee" in 2017 to implement corporate governance, strengthen the operating efficiency of the Board of Directors, and establish a corporate culture of ethical management.

Evaluation on the implementation of the Board of Directors：

Evaluation	on the implementation of the Board of Directors：
Evaluation cycle (Note 1)	once a year.
Period of evaluation (Note 2)	from January 1, 2020 to December 31, 2020
Scope (Note 3)	The scope of the evaluation of the Board of Directors includes the evaluation of the performance of the entire Board of Directors, individual Board members,the Audit Committee and the Remuneration Committee.
Evaluation method (Note 4)	Performance evaluation is conducted through internal self-evaluation by the Board of Directors, self-evaluation by Board members, and peer evaluations. If the term of office of the subjects of the preceding paragraphs does not expire in that year, the performance evaluation shall be conducted during the term of office in thatyear.
Evaluation content (Note 5)	The Company shall consider it's situation and needs to establish the criteria for board performance evaluation, and shall include at least the following five major aspects: I. Extent ofparticipation in the Company's operations.

37 -

II.
Improvement in the quality of the Board's decision-making.
III.
Composition and structure of the Board of Directors.
IV.
Election of Directors and Continuing Education.
V.
Internal Control.
The measurement items of the self-assessment questionnaire for Board
members and peers should include at least the six following aspects:
I.
Familiarity with the Company's goals and undertakings.
II.
Awareness of Directors' responsibilities.
III.
Extent of participation in the Company's operations.
IV.
Internal relationship management and communication.
V.
Professionalism and continuing education of Directors.
VI.
Internal Control.
The measurement items of the Audit Committee's performance evaluation
should include at least the five following aspects:
I.
Extent of participation in the Company's operations.
II.
Recognition of the Audit Committee's responsibilities.
III.
Improvement in the quality of decision-making of the Audit
Committee.
IV.
The composition of the Audit Committee and the selection of its
members.
V.
Internal Control.
The measurement items of the Remuneration Committee’s performance
evaluation should include at least the four following aspects:
I.
Extent of participation in the company's operations.
II.
Recognition of the Remuneration Committee's responsibilities.
III.
Improvement in the quality of decision-making of the Remuneration
Committee.
IV.
Composition and Selection of Remuneration Committee Members

Note 1: Fill in the execution cycle of the evaluation for the Board of Directors, for example: once a year. Note 2: Fill in the covered period of the evaluation for the Board of Directors, for example: the performance evaluation of the Board from January 1, 2019 to December 31, 2019.
Note 3: The scope of evaluation include the performance of the Board of Directors, individual board members and functional committees.
Note 4: The methods of evaluation include internal self-evaluation by the board members, peer evaluation, appointment of external professional institutions, experts, or other appropriate methods to carry out the evaluation of performance.
Note 5: The contents of evaluation include at least the following items according to:
(1) The evaluation of performance for the board: at least include the level of participation in the operations for the Company, the quality of decisions for the board, the composition and structure of the board, selection of Directors and training, internal control, etc.
(2) The evaluation of performance for individual Directors: at least include the handling of goals and tasks for the Company, the responsibilities for Directors, and the level of participation in the operations for the Company, the management and communication for internal relationship, the profession of Directors, training, and internal control, etc.
(3) The evaluation of performance for the functional committees: the level of participation in the company operations, the responsibilities of the functional committees, the quality of decisions of the functional committees, the composition of the functional committee, the selection for members, internal control, etc.
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3.3.2 Audit Committee （ or Attendance of Supervisors at Board Meetings ）

The Company's Audit Committee is composed of all Independent Directors. The key work and audit items include:

1.Adoption or amendment of an internal control system pursuant to Article 14-1.
2.Assessment of the effectiveness of the internal control system.
3.Adoption or amendment, pursuant to Article 36-1, of handling procedures for financial or operational actions of material significance, such as acquisition or disposal of assets, derivatives trading, extension of monetary loans to others, or endorsements or guarantees for others.
4.A matter bearing on the personal interest of a director.
5.A material asset or derivatives transaction.
6.A material monetary loan, endorsement, or provision of guarantee.
7.The offering, issuance, or private placement of any equity-type securities.
8.The hiring or dismissal of an attesting CPA, or the compensation given thereto.
9.The appointment or discharge of a financial, accounting, or internal auditing officer. 10.Annual and semi-annual financial reports.
11.Any other material matter so required by the company or the Competent Authority.

A. Audit Committee

A total of 5 (A) Audit Committee meetings were held in the previous period. The attendance of the independent directors was as follows:

Title	Name	Attendance in Person(B)	By Proxy	Attendance Rate (%) 【Ｂ/Ａ】	Remarks
Independent Director	Cheng-Ching Huang	`2`	`0`	`100`	New appointment `2020.06.12`
Independent Director	Nien-Tsu Chiang	`2`	`0`	`100`	New appointment `2020.06.12`
Independent Director	Jimmy T. Hsieh	`4`	`1`	`80`	Reappointment `2020.06.12`
Independent Director	Tien-Sung Lee	`3`	`0`	`100`	Dismissal `2020.06.12`
Independent Director	Yeong-Tsong Shaw	`3`	`0`	`100`	Dismissal `2020.06.12`

Other required disclosure:

I. If the audit Committee has any of the following issues; the date, period, proposal content, the resolution of the Audit Committee and the Company's reaction toward the audit Committee's opinions shall be specified.
(I) Items listed in Article 14-5 of Securities and Exchange Act:
39 -

Board of Directors Term and Date	Proposal	Items specified in Article 14-5 of the Securities and Exchange Act	Any resolution not approved by the Audit Committee but approved by two thirds or more of all Directors
25th Board of Directors 24th Meeting (2020/03/20)	1.Resolution of the Company's 2019 Financial Report.	`V`	No
	2.Resolution for appointing the CPAs Wang-Sheng Lin and Wen-Yea Shyu of Deloitte, Taiwan to audit the 2020 financial and taxation statements and remuneration report.	`V`	No
	3.Resolution of the Anti-Money Laundering and Counter Terrorism Financing Internal Control System Statement for 2019.	`V`	No
	4.Resolution of the 2019 "Internal ControlSystemStatement".	`V`	No
	5.Resolution of the statement of the overall implementation status of the information security system in 2019.	`V`	No
	Audit Committee Resolution: The Chair consulted all Independent Directors in attendance and the proposals were passed unanimously by the Independent Directors in attendance and filed for discussion in the board meeting. Response of the Company to the opinions of the Audit Committee: the Board acted in favor of the motion in common consent.
25th Board of Directors 25th Meeting (2020/04/30)	1.Resolution for approval to discharge Director Candidates from Non-Compete Restrictions during the Directors’ election for the Company's 26th term of Board of Directors.	`V`	No
	2. Resolution of the 2020 Company Audit Plan.	`V`	No
	Audit Committee Resolution: The Chair consulted all Independent Directors in attendance and the proposals were passed unanimously by the Independent Directors in attendance and filed for discussion in the board meeting. Response of the Company to the opinions of the Audit Committee: the Board acted in favor of the motion in common consent.

40 -

Board of Directors Term and Date	Proposal	Items specified in Article 14-5 of the Securities and Exchange Act	Any resolution not approved by the Audit Committee but approved by two thirds or more of all directors
26th Board of Directors 2nd Meeting (2020/08/28)	1.Resolution of the Company's Financial Report for the first half of 2020.	`V`	No
	2.Resolution for the donation to "Taiwan Fire & Marine Foundation".	`V`	No
	Audit Committee Resolution: The Chair consulted all Independent Directors in attendance and the proposals were passed unanimously by the Independent Directors in attendance and filed for discussion in the board meeting. Response of the Company to the opinions of the Audit Committee: the Board acted in favor of the motion in common consent.
26th Board of Directors 4th Meeting (2020/12/25)	1.Resolution of the amendments to the"InternalControlSystem"	`V`	No
	2.Resolution of the 2021 Company Audit Plan.	`V`	No
	Audit Committee Resolution: The Chair consulted all Independent Directors in attendance and the proposals were passed unanimously by the Independent Directors in attendance and filed for discussion in the board meeting. Response of the Company to the opinions of the Audit Committee: the Board acted in favor of the motion in common consent.
26th Board of Directors 7th Meeting (2021/03/26)	1.Resolution of the 2020 Anti-Money Laundering and Counter Terrorism Financing Internal Control System Statement.	`V`	No
	2.Resolution of the 2020 Internal Control System Statement.	`V`	No
	3.Resolution of the 2020 overall implementation status of the information security system statement.	`V`	No
	`4.`Approval for investment in Abico Asia Capital II Excellence Transformation and Growth Limited Partnership Venture Capital Fund.	`V`	No
	5.Resolution for appointing the CPAs Wang-Sheng Lin and Wen-Yea Shyu of Deloitte, Taiwan to audit the 2021 financial and taxation statements and their remuneration.	`V`	No

41 -

Proposal	Items specified in Article 14-5 of the Securities and Exchange Act	Any resolution not approved by the Audit Committee but approved by two thirds or more of all directors
6.Resolution of the Company's 2020 Financial Report.	`V`	No
7. Resolution of the Company's 2020 Earnings Distribution Proposal.	`V`	No
Audit Committee Resolution: The Chair consulted all Independent Directors in attendance and the proposals were passed unanimously by the Independent Directors in attendance and filed for discussion in the board meeting. Response of the Company to the opinions of the Audit Committee: the Board acted in favor of the motion in common consent.

(II) In addition to the items in the preceding sentence, other resolutions passed by two-thirds of all the directors but yet to be approved by the Audit Committee: None.
II. In regards to the recusal of independent directors from voting due to conflict of interests, the name of the independent directors, the proposal, reasons for recusal due to conflict of interests and voting outcomes should be stated: None
III. Communication among independent directors and internal audit supervisors and CPA (shall include material matters, methods, and results of communication on the Company's finance and state of business):
(I) The head of internal audit and the independent Directors shall convene at least once every quarter, and the Audit Committee shall report on the status of the Company's audit and the execution of internal control measures in its 2020 Annual Meeting. In the event of major irregularities, a meeting may be convened at any time to discuss and communicate.
(II) The independent Directors and the internal audit supervisor shall hold a symposium at least once a year to fully communicate and make records on issues such as the company's internal auditing deficiencies and improvement plans, and submit the meeting minutes of the symposium to the Board of Directors for a report.
(III) The independent Directors and accountants shall meet at the audit committee meeting at least twice a year to fully communicate on the Company's financial and business conditions, audit reports and the 2020 audit plan. In case of major irregularities, they may convene meetings to discuss and communicate at any time.
42 -

Summary of communication:

Date	Communic ation method	Communicati on target	Communication item	Communication results
`2020.03.20`	Audit Committee	1. The Company's Chief Auditor 2. The Company's Chief Accounting Officer and CPA	1. Report on the Company's audit operations in the second half of 2019. 2. Report on the Company's 2019 internal control system Self-Assessment Report and the Company's 2019 Internal Control System Statement. 3. Review of the Company's 2019 Financial Report.	1. Approved for the records. 2. The chair consulted all Committee Members in attendance. The proposals were passed unanimously and filed for discussion in the board meeting. 3. The chair consulted all Committee Members in attendance. The proposals were passed unanimously and filed for discussion in the board meeting.
`2020.04.30`	Audit Committee	The Company's Chief Auditor	Report on the Company's improvement status regarding irregularities found in inspections in the second half of 2019.	Approved for the records.
`2020.08.28`	Audit Committee	1. The Company's Chief Auditor 2. The Company's Chief Accounting Officer and CPA	1. Report on the Company's audit operations in the first half of 2020. 2. Communication with the Company's CPA regarding the 2020 the audit plan and the audit for the second quarter of 2020. 3. Review the Company's financial report for the first half of 2020.	1. Approved for the records. 2. Approved for the records. 3. The chair consulted all Committee Members in attendance. The proposals were passed unanimously and filed for discussion in the board meeting.
`2020.10.30`	The forum between owner and internal auditor	The Company's Chief Auditor	1.Analysis of the status for internal auditing. 2.The situation about the auditing deficiencies in the first half of 2020 and the handling of improvement for the Company. 3.The focus of financial inspection in 2020 - Nonlife insurance companies. 4.The main auditing deficiencies in the first half of 2020 by the inspection bureau - nonlife insurance companies. 5.Cases of punishment in nonlife insurance industry from January to September in 2020. 6.In 2020, the presentation and matters of promotion for	Approved for the records.

43 -

Date	Communic ation method	Communicati on target	Communication item	Communication results
			"Internal Auditing Symposium on Insurance Industry" by the inspection bureau.
`2020.12.25`	Audit Committee	The Company's Chief Auditor	Review the Company's 2021 audit plan	The chair consulted all Committee Members in attendance. The proposals were passed unanimously and filed for discussion in the board meeting.

B. Attendance of Supervisors at Board Meetings: N/A, Company has Audit Committee set up in lieu of the functions of Supervisors.

44 -

3.3.3 State of Corporate Governance, Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason

Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
1. Has the Company established and disclosed its code of practices on corporate governance based on "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies?"			The Company has established the "Corporate Governance Best Practice Principles" in accordance with the "Corporate Governance Best Practice Principles for Insurance Companies" and the "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies" and disclosed on the Company's official website under the Company's important regulations (https://www.tfmi.com.tw).	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies
2. The shareholding structure of the Company and shareholders' rights (1) Did the company establish an internal procedure for handling shareholder proposals, inquiries, disputes, and litigation? Are such matters handled according to the internal procedure? (2) Did the company maintain a register of major shareholders with controlling interest as well as a register of persons exercising ultimate control over those major shareholders? (3) Did the company establish and enforce risk control and firewall systems with its	  		(1) The Company has designated a spokesperson, acting spokesperson, and shareholder service personnel to process shareholders' suggestions, questions, and disputes. The contact methods are disclosed on the Company's official website (https://www.tfmi.com.tw) to protect shareholder interests. (2) The Company has established shareholder service personnel to manage related information and assigned a professional shareholder service agency to provide the latest information. (3) The Company and its affiliated enterprises adopted independent management of their assets and	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
affiliate enterprises? (4) Did the company formulate internal regulations that prohibit company insiders from trading securities using information not disclosed to the market?			finances. The Company has also established the "Procedures Governing the Acquisition and Disposal of Assets," "Procedures on Transactions with Stakeholders," "Regulations on Financial Businesses and Transactions with Stakeholders," "Internal Regulations on Transactions with Stakeholders," and "Reinvestment Management Regulations" to provide guidance. (4) The Company has established the "Regulations on Prevention of Conflicts of Interest and Insider Trading" and "Procedures for Handling Material Internal Information” to prevent internal staff from trading securities based on information that has not been disclosed to the market. The regulations are placed in the Company's internal regulations and announced on the Company's official website. (https://www.tfmi.com.tw)	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies
3. Organization and responsibilities of the Board of Directors (1) Has a policy of diversity been established and implemented for the composition of the board of directors?			(1)The Company's Corporate Governance Best Practice Principles provides that, to improve the structure of the Board of Directors, the Members of the Board should be diversified in terms of differentprofessional	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
(2) In addition to Salary and Remuneration Committee and Audit Committee established according to law, has the company voluntarily established other functional committees?			backgrounds (such as legal, accounting, and industrial backgrounds), gender, or sectors. The composition of the members of the Board should have gender equality and incorporate knowledge, skills, and ethics required for the performance of duties. The Members of the Board elected by the Company on June 12, 2020 and their representatives all meet the preceding qualifications for improving the structure of the Board of Directors and enhance the Company's corporate governance. (2)The Company has established functional committees as follows: 1. Risk Management Committee: An Independent Director serves as Convener. The Risk Management Committee follows regulations, implements risk management system, effectively manages and correctly assesses the reasonable risks in the Company's business operations and assists the Board of Directors in recognizing the necessary risks in the insurance industry, establish appropriate risk management mechanisms and culture, and ensure the validity of risk management. A Risk Management Office is established to oversee the operations of the Committee. 2. Remuneration Committee: The	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
			Committee is responsible for establishing a system of evaluation and regularly reviews the performance of the Directors and managers as well as remuneration policies, systems, standards, structures, and related affairs. 3. Audit Committee: The main mission of the Committee is to supervise the Company’s affairs. A. The fair presentation of the Company's financial reports. B. Appointment or dismissal of the certifying CPAs and evaluation of their independence and performance. C. The effective implementation of the Company's internal control system. D. The compliance to relevant regulations and rules. E. Management of existing or potential risks. 4. Ethical Management Committee: The main function of this committee is to assist in incorporating ethics and moral values into the Company's business strategy and adopt appropriate prevention measures against corruption and malfeasance to ensure ethical corporate management in compliance with the requirements of laws and regulations. This	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
(3) Does the company establish standards and method for evaluating Board performance, conduct annual performance evaluations, submit performance evaluation results to the Board, and use the results as a basis for determining the remuneration and nomination of individual Directors?			committee plans and formulates standard operating procedures associated with the prevention of unethical conduct to ensure the implementation effectiveness of the Company's whistleblowing system. The Ethical Management Committee also assists the Board of Directors and senior management in reviewing and assessing whether the prevention measures taken for implementing ethical corporate management are carried out effectively, and preparing reports on the regular assessment of compliance with ethical corporate management in operating procedures. (3)The Company has formulated the "Directors Performance Evaluation Procedures", which stipulates the procedures and indicators conducted for the annual Board evaluation, and the results of evaluation should be completed before the end of the first quarter of the following year. The Company's Directors' evaluation indicators are as follows: `1.`The performance evaluation of the Board of Directors includes five major aspects: A. Extent of participation in the company's operations. B. Improvement in the quality of the Board's decision-making. C. Composition and structure of the Board of Directors.	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
			D. Election of Directors and Continuing Education. E. Internal Control. `2.`The performance evaluation of Board members includes six major aspects: A. Familiarity with the Company's goals and undertakings. B. Awareness of Directors' responsibilities. C. Extent of participation in the Company's operations. D. Internal relationship management and communication. E. Professional and continuing education of Directors. F. Internal Control. `3.`The Audit Committee's performance evaluation includes five major aspects: A. Extent of participation in the company's operations. B. Recognition of the Audit Committee's responsibilities. D. Improvement in the quality of decision-making of the Audit Committee. E. The composition of the Audit Committee and the selection of its members. F. Internal Control. `4.`The performance evaluation of the Remuneration Committee includes four major aspects: A. Extent of participation in the company's operations. B. Recognition of the Remuneration Committee's responsibilities. C. Improvement in the quality of decision-makingof the	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
(4) Did the company regularly implement assessments on the independence of the CPAs?			Remuneration Committee. D. Composition and Selection of Remuneration Committee Members. The evaluation results are to be categorized as "excellent", "acceptable" and "need improvement". The evaluation results were presented to the Board of Directors on March 26, 2021. The results of the performance evaluation for 2020 were “excellent” for each board member, the Audit Committee and the Remuneration Committee. (4) To maintain the independence of the certifying CPAs and comply with regulations, the Company evaluates the independence of certifying CPAs every year in accordance with the No. 10 Statement on Professional Ethics Standards for ROC Accountants on "Integrity, Objectivity and Independence." The evaluation items are as follows: A. Statement of Independence B. Direct or indirect material financial interests C. Currently serving or having served as the Company's Director, Supervisor, or other positions that could seriously affect the audit in the most recent two years. D. Defended the Company's views or opinions that may affect his/her independence.	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
			E. The CPA and the audit team did not suffer or feel any threat from the Company that may cause it to be unable to maintain objectivity and clarify professional skepticism. The CPA and the audit team did not provide any non-auditing services that may affect their independence. F. There were no other occurrences of conditions specified in the No. 10 Statement on Professional Ethics Standards that may affect their independence. The evaluation report has been submitted to the Audit Committee and the Board of Directors for approval. The evaluation has shown that the CPAs Wang-Sheng Lin and Wen-Ya Hsu of the accounting firm Deloitte & Touche appointed by the Company in 2020 and 2021 meet requirements for independence.
4. Does the TWSE/TPEx listed company have a dedicated unit/staff member in charge of the Company's corporate governance affairs (including but not limited to providing information required for director/supervisor's operations,			(I) In order to protect the rights of shareholders and strengthen the functions of the Board of Directors, the Company has allocated the appropriate corporate governance personnel in the legal compliance office, financial department and planning department. In the 19th meeting	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
convening Board/Shareholder meetings in compliance with the law, apply for/change company registry and producing meeting minutes of Board/Shareholder meetings)?			of the 25th Board of Directors on April 26, 2019, a resolution was passed to appoint Vice President Nicholas Sheu as the head of Corporate Governance. He has been in charge of legal affairs and procedures for more than three years. His main responsibilities are to supervise and manage the meetings for Board of Directors and shareholders in accordance with the law, to prepare the minute book for the Board and shareholders, to assist Directors taking office and training, to provide Directors with the necessary information to conduct businesses, to assist Directors following laws and other matters stipulated by the Company Charters or contracts. (II) 2020 the Head of Corporate Governance supervised and implemented corporate governance matters with the support of relevant units: 1. Assisted Directors to provide the necessary information regarding the business and to follow with laws and regulations. 2. Handled all matters relatimg to the Meetings of the Board and Shareholders in accordance with the law. (1)Meeting agenda for the Board meeting shall be conveyed to all Directors 7 days prior with sufficient information to enable the Directors to understand the relevant content;if the

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
			content is related to the Directors and should be properly recused. (2)All matters relating to the Shareholders' Meeting are to be planned and handled in accordance with the law, and the letter of advice, meeting handbook, the annual report, the minute books and the relevant announcements after the meeting all prepared per regulation requirement. 3. Prepare the minute books for the meeting of the Board and Shareholders. (1)The minute books for the meeting of the board are distributed to the Directors within 20 days after the meeting. (2)The minute books for the meeting of the shareholders will be announced to all shareholders within 20 days after the meeting. 4. Handle and change the registration matters related of company within 15 days. 5. Provide at least 6 hours of advanced home- training sessions for the Directors. 6. 2020 D&O liability insurance policy renewed and reported to the Board of Directors. 7. Strengthen information disclosure: to safeguard Shareholder’ rights and implement equal treatment of Shareholders,and the

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Assessed Item	Current Operation (Note 1)	Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
			disclosure of English financial reports. 8. According to the index item of "Corporate Governance Evaluation," regularly review the implementation of corporate governance related matters with various authorities to follow with the laws. 9. Evaluate owns performance against the Articles of the "Corporate Governance Best Practice Principles for Insurance Companies."
5. Has the company established channels of communication for stakeholders (including but not limited to shareholders, employees, customers and suppliers), dedicated a section of your company's website for stakeholder affairs and adequately responded to stakeholders' inquiries on significant corporate social responsibility issues?			Communication between the Company and stakeholders are conducted by related business units. The Company has also established the "Regulations on Financial Businesses and Transactions with Stakeholders" and "Internal Regulations on Transactions with Stakeholders" for employees to follow. At the same time, the Company also established a Stakeholder section on the official website to adequately respond to stakeholders' inquiries on significant corporate social responsibilityissues.	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies
6. Does the Company commission professional services agencies to hold Shareholders' Meetings and other relevant affairs?			The Company has appointed the Department of Stock Affairs at Waterland Securities Co., Ltd. to process affairs related to shareholders’ meetings.	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies
7. Information disclosure

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Assessed Item	Current Operation (Note 1)	Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
(1) Did the Company establish a website to disclose information on financial operations and corporate governance? (2) Did the company adopt other means of information disclosure (such as establishing an English language website, delegating a professional to collect and disclose company information, implement a spokesperson system, and disclosing the process of investor conferences on the company website)? (3) Does the Company publish annual financial statements within two months after the end of each fiscal year, and report Q1, Q2, and Q3 financial statements, as well as monthlyoperation results,	 		(1)The Company has established an official website (https://www.tfmi.com.tw). A dedicated department is responsible for information collection and prompt updates of content of the website. Related financial and business information, Directors' attendance in Board of Directors meetings and their continuing education are also regularly disclosed on the website. In addition, the Company has established an Investor Service area for investor queries. (2)The Company has established an English website to provide foreign investors with related information, and set up a dedicated unit responsible for updating the important information on the Market Observation Post System (MOPS) and financial information. The Company has also established the Rules Governing Spokespersons to implement a unified spokesperson system. The Company held two investor conferences in 2020, and has disclosed the relevant information on its official website. (3)The Company does not publish annual financial statements within two months after the end of each fiscal year, but basing on the Article 36 of Securities and Exchange Act and Article 36 of the Regulations Governing the	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies The Company disclosed the annual financial report within three months after the end of the fiscal year in accordance

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
before the prescribed time limit?			Preparation of Financial Reports for Insurance Enterprises, the Company published the annual financial report within three months; and disclose the first, second, and third quarter financial reports and the monthly operating situation within the prescribed time limit.	with the law.
8. Has the Company disclosed other information to facilitate a better understanding of its corporate governance (Including but not limited to employee's rights, employee care, investor relations, supplier relations, stakeholders' rights, further studies of Directors and Supervisors, implementation of risk management policies and measurement standards, implementation of customer policies and purchase of liability insurance for the Directors and Supervisors of the Company)?			(1)The Company conducts business in accordance with the Company Act and related laws and regulations. The Company's Articles of Incorporation established clear regulations on the appropriation of employee remuneration. The "Work Rules" established in accordance with the Labor Standards Act safeguards the rights and interests of employees. The Company also protects the rights and interests of employees through periodic labor-management meetings between representatives of the employees and management, the Labor Retirement Reserve Supervisory Committee, Sexual Harassment Prevention, Complaint, and Resolution Committee, Personnel Evaluation Committee. (2)The company established the Employee Welfare Committee to organize group insurance for employees, conduct periodic medical examination, birthday parties, company outings, and	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
			provide subsidies for multiple clubs and activities to promote employees' physical and mental health. (3)The Company maintains long-term relationships with investors, established a spokesperson and acting spokesperson system, provides shareholders and corporate investors with contact windows, announces monthly operating performance reports, organizes annual general shareholders’ meetings, establishes good communication channels with investors, periodically discloses financial information, and implements information disclosure and transparency to protect shareholder rights and interests. (4)The Company participates in the Risk Management Society of Taiwan, R.O.C., Chinese Insurance Service Association, and Taiwan Financial Services Roundtable as Group Member to increase the level of the Company's internal risk management skills and related measures. The Company also periodically invites insurance Clients to participate in health and wealth management seminars organized by the Company. The Companyalso collaborates with	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
			universities to organize seminars on risks and insurance to advance domestic insurance and financial education activities, increase the public’s understanding of insurance, and promote social stability. (5)The Company has established the "Procedures on Transactions with Stakeholders,” "Internal Regulations on Transactions with Stakeholders,” "Internal Regulations on Transactions with Stakeholders,” and "Regulations on Financial Businesses and Transactions with Stakeholders,” to provide guidance. (6)The Company's Directors have all participated in continued education (please refer to page 49-51 of the Annual Report) and announced the progress of their training courses on the Market Observation Post System. (7)The Company has established the Risk Management Committee, which convenes at least once each quarter. An Independent Director serves as the Convener to implement regulations, oversee the implementation of the risk management system, effectively manage and correctly assess the risks in the Company's business operations and to assist the Board of Directors in recognizing the risks in the insurance industry,	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
			establish appropriate risk management mechanisms and culture, and ensure the validity of risk management. A Risk Management Office is established to oversee the operations of the Committee. (8)The Company regularly conducts internal control assessment tasks on various departments and subsidiaries as preventative controls. The Audit Department assigns auditing personnel to conduct related auditing and management tasks. (9)The Company has established a unit responsible for consumer disputes, a toll-free customer service line (0809-068-888), and an online message system on the Company's official website. The Company has maintained free flowing communication channels with customers and implementa-tion was successful. Consumer disputes are processed in accordance with the "Fair Trade Act" and "Financial Consumer Protection Act" and the Company's policies are rigorously implemented. (10)The Company convenes a meeting of the Board of Directors once each month and the Directors' participation has been excellent. The attendance information is also disclosed on	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
			the Market Observation Post System. (11)The Company has purchased liability insurance for Directors, Supervisors and important corporate officers. (12)To establish regulations required for the corporate governance system to achieve the effects of early warning before audits and perform the functions of internal control, the Company has established the Legal Compliance Department in accordance with the "Regulations Governing Implementation of Internal Control and Auditing System of Insurance Enterprises" to take charge of the planning, management, and implementation of the legal compliance system. (13)To protect shareholder interests and encourage shareholders to participate in corporate governance, the Company voluntarily adopted electronic voting as one of the channels for exercising voting rights in the shareholders meeting in 2015 to fully utilize technology for information disclosure and voting for the purpose of increasing shareholder attendance rates at Shareholder Meetings and to ensure that shareholders may exercise their rights.	It is consistent with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item	Current Operation (Note 1)	Current Operation (Note 1)	Current Operation (Note 1)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason
	Yes	No	Summary
9. Please specify the Company's measures to improve the items listed in the corporate governance review by the Taiwan Stock Exchange's Corporate Governance Center and the improvement plans for items to be improved. In April 2021, the Taiwan Stock Exchange released the results of the “Seventh Annual Corporate Governance Review”, which ranked the Company among the top 20 percent of companies for seven consecutive terms. Two new independent directors were elected at the 2020 Shareholders' Meeting. At present, none of the three independent directors have served for more than three consecutive terms. In the future, the Company plans to issue CSR reports in English and continue to encourage our internal auditors to actively take the Certified Internal Auditor (CIA), Certified Information Systems Auditor (CISA) or Certified Public Accountant (CPA) examinations in order to obtain such licenses or certifications.

Note: Provide a brief description in the appropriate column, regardless whether "yes" or "no" is selected.

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3.3.4 Remuneration Committee

A.Information on Members of Remuneration Committee

Status	Conditions Name	Meets One of the Following Professional Qualification Requirements, Together with at Least Five Years’ Work Experience	Meets One of the Following Professional Qualification Requirements, Together with at Least Five Years’ Work Experience	Meets One of the Following Professional Qualification Requirements, Together with at Least Five Years’ Work Experience	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Number of Other Public Companies in Which the Individual is Concurrently Serving as an Remuneratio n Committee Member	Note
		An instructor or higher position in a department of commerce, law, finance, accounting, or other academic department related to the business needs of the Company in a public or private junior college, college or university	A judge, public prosecutor, attorney, Certified Public Accountant, or other professional or technical specialist who has passed a national examination and been awarded a certificate in a profession necessary for the business of the Company	Has work experience in the areas of commerce, law, finance, or accounting, or otherwise necessary for the business of the Company	1	2	3	4	5	6	7	8	9	10
Independent Director	Tien-Sung Lee														0	Dismissal `2020.06.12`
Independent Director	Yeong-Tsong Shaw														0	Dismissal `2020.06.12`
Independent Director	`Cheng Ching` `Huang`														0	New appointment `2020.06.12`
Other	Christopher Chang														1	Reappointmen t
Independent Director	Nien-Tsu Chiang														0	New appointment `2020.06.12`

Note 1:

Note 2: Please tick the corresponding boxes that apply to a member during the two years prior to being elected or during the term(s) of office.

(1) Not an employee of the Company or any of its affiliates.

(2) Not a director or supervisor of the Company or any of its affiliates (not applicable in cases where the person is an independent director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws).

(3) Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of one percent or more of the total number of issued shares of the company or ranks as one of its top ten Shareholders.
(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship of a manager in (1) or personnel in (2) and (3).
(5) Not a director, supervisor, or employee of a corporate shareholder that directly holders 5% or more of the Company's outstanding shares, is a top five shareholder, or appointed a representative as the Company's director or supervisor in accordance with Article 27, Paragraph 1 or 2 of the Company Act (not applicable in cases where the person is an independent director of the Company, its parent
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company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws).

(6) Not a director, supervisor, or employee of other companies controlled by the same person with over half of the Company's director seats or shares with voting rights (not applicable in cases where the person is an independent director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws).
(7) Not a director, supervisor, or employee of another company or institution who is the same person or spouse of the Company's chairperson, president or equivalent position (not applicable in cases where the person is an independent director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws).
(8) Shareholders (not applicable in cases where the specific company or institution holds 20% or more but less than 50% of the Company's outstanding shares, and is an independent director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws).
(9) Not a professional individual who, or an owner, partner, director, supervisor, or manager of a sole proprietorship, partnership, company, or institution that audited or provided commercial, legal, financial, or accounting services for total compensation not exceeding NT$500,000 in the most recent two years to the company or to any affiliate of the company, or a spouse thereof, This does not apply to members of the Remuneration Committee, Public Tender Offer Review Committee, or Merger and Acquisition Special Committee performing duties in accordance with the Securities and Exchange Act or laws and regulations related to mergers and acquisitions.
(10) Not having any of the situations set forth in Article 30 of the Company Act of the R.O.C.
B. The Remuneration Committee shall exercise the care of a prudent manager to fulfill the following duties, and submit recommendations for Board of Directors discussion:
Review of the Remuneration Committee charter regularly and provide revision suggestions whenever necessary.
Establish a regular system of review and evaluation on the Director and managers’ performance, as well as remuneration policies, systems, standards, and structures.
Evaluate and establish compensation and benefits for Directors and managers periodically.

C. Remuneration Committee

Remuneration committee consists of three members.
The term of the current committee: June 16, 2017 to June 11, 2020. The committee has held a total of two (2) meetings (A), from January 1, 2020 to June 11, 2020. The attendance and qualifications of committee members are as follows:

Title	Name	Number of attendance (B)	Number of attendance via proxy	Attendance Rate (%) 【Ｂ/Ａ】	Remarks
Convener	Tien-Sung Lee	`2`	`0`	`100`	-
Member	Christopher Chang	`2`	`0`	`100`	-
Member	Yeong-Tsong Shaw	`2`	`0`	`100`	-
Other items: 1.Resolutionsmade bytheRemunerationCommittee

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Remuneration Committee Term and Date	Proposal
3rd Term Remuneration Committee 9th Meeting (2020/01/17)	1. Proposal for the distribution of 2019 year-end performance bonus for the Chairman.
	2. Proposal for the distribution of 2019 year-end performance bonus for the President.
	3. Managers’ year-end performance bonus plan for 2019 and the project incentive bonus from Oct. 1 to Dec. 31,2019.
	Resolution: The proposals were passed unanimously by the Committee Members in attendance. The Company's actions in response to the opinions of the Remuneration Committee: All the Directors in attendance voted in favor of the resolution.
3rd Term Remuneration Committee 10th Meeting (2020/03/17)	1. Remuneration for Ms. Tze-Yue Chen, representative of the corporate Director Bank of Taiwan Co.,Ltd.
	2. Proposal for the distribution of the remuneration to employees and Directors for 2019.
	3. Proposal for the distribution of the remuneration to non-Independent Directors for 2019.
	4. Proposal for the distribution of the remuneration to Independent Directors for 2018.
	5. Amendment to the Company of the "Management Measures for Remuneration to Directors."
	6. Adjustment for the compensation of managers.
	Remuneration Committee resolution: The proposals were passed unanimously by the Committee Members in attendance. The Company's actions in response to the opinions of the Remuneration Committee: All the Directors in attendance voted in favor of the resolution.

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The 4th term of the current committee: June 12, 2020 to June 11, 2023. The committee has met 3 times (A). The attendance and qualifications of committee members are as follows:

committe members	e has met 3 tim are as follows:	es(A).The att	endance and q	ualifications of co	mmittee
Title	Name	Number of attendance (B)	Number of attendance via proxy	Attendance Rate (%) 【Ｂ/Ａ】	Remarks
Convener	Cheng Ching Huang	`3`	`0`	`100`	-
Member	Christopher Chang	`3`	`0`	`100`	Reappointment `2020.06.12`
Member	Nien-Tsu Chiang	`3`	`0`	`100`	-
Other required disclosure: 1.Items determined bytheRemunerationCommittee Remuneration Committee Term and Date Proposal 4th Term Remuneration Committee 1st Meeting (2020/08/21) `1.`Nominate the convenor of the 4th term of the Committee and the Chairperson of the Meeting to confirm the report for inspection `2.`Report on the proposed remuneration for the 26th term Board of Directors. `3.`Report on the proposed remuneration for the 26th term independent Board of Directors. 4. Proposal to release project incentive bonus for managers from January 1,2020 to July30,2020. Remuneration Committee resolution: The proposals were passed unanimously by the Committee Members in attendance. The Company's actions in response to the opinions of the Remuneration Committee: All the Directors in attendance voted in favor of the resolution. 4th Term Remuneration Committee 2nd Meeting (2021/01/27) `1.`Amendment of certain provisions of the "Directors’ Performance Evaluation Procedures"of the Company. 2.Remuneration for Mr. Chain-Cheng Lee representative of the corporate Director Yong-Shin Development Co.,Ltd. `3.`2020 Year-end performance bonus for Company Chairman Mr. SteveLee. `4.`2020 Year-end performance bonus for former Company President Mr. Charles Sung. `5.`Payment of pension benefits for former Company President Mr. Charles Sung. `6.`Remuneration for Mr. Charles Sung, Company Vice Chairman. `7.`Remuneration for Mr. Chen, Chao-Feng, CompanyPresident. `8.`Managers’ year-end performance bonus plan for 2020 and project incentive bonusfrom Aug.1 toDec. 31,2020. 9.Adjustment for the compensation of managers.

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	Remuneration Committee resolution: The proposals were passed unanimously by the Committee Members in attendance. The Company's actions in response to the opinions of the Remuneration Committee: All the Directors in attendance voted in favor of the resolution.
4th Term Remuneration Committee 3rd Meeting (2021/03/24)	1. Amendment to the Company of the "Management Measures for Remuneration to Directors."
	2. Amendment to the Remuneration of Salespersonnel and Performanace Review and Remuneration for Brokers and Agents.
	3. Proposal for the distribution of the remuneration to employees and Directors for 2020.
	4. Proposal for the distribution of the remuneration to Directors for 2020.
	5.Remuneration for Ms. Su-Ju Hsu representative of the corporate Director Bank of Taiwan Co., Ltd.
	`6.`Adjustment for the compensation of managers.
	Remuneration Committee resolution: The proposals were passed unanimously by the Committee Members in attendance. The Company's actions in response to the opinions of the Remuneration Committee: All the Directors in attendance voted in favor of the resolution.

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3.3.5 Composition, Responsibilities and Operations of the Company's Ethical Corporate Management Committee

A. Operations of the Ethical Corporate Management Committee
Ethical Corporate Management Committee is consist of three members.
Term of office for the committee: June 16, 2017 to June 11, 2020 . The committee has held a total of one (1) meeting (A) fromJanuary 1, 2020 to June 11, 2020. The

attendance and qualifications of committee members are as follows:

Title	Name	Number of attendance (B)	Number of attendance via proxy	Attendance Rate (%) 【Ｂ/Ａ】	Remarks
Independent Director	Tien-Sung Lee	`1`	`0`	`100`	Convener
Independent Director	Yeong-Tsong Shaw	`1`	`0`	`100`	`-`
Independent Director	Jimmy T. Hsieh	`1`	`0`	`100`	`-`

Term of office for the 2nd term committee: June 12, 2020 to June 11, 2023.

The committee has held a total of two (2) meetings (A). The qualifications and attendance of the committee members are as follows:

Title	Name	Number of attendance (B)	Number of attendance via proxy	Attendance Rate (%) 【Ｂ/Ａ】	Remarks
Independent Director	Cheng Ching Huang	`2`	`0`	`100`	Convener
Independent Director	Nien-Tsu Chiang	`2`	`0`	`100`	`-`
Independent Director	Jimmy T. Hsieh	`2`	`0`	`100`	`-`

Other required disclosure:

Resolutions of the Ethical Corporate Management Committee

Ethical Management Committee Term andDate	Proposal
1st Term Ethical Management Committee 6th Meeting (2020/01/20)	1. Reviewed the Company’s 2019 evaluation report on the fulfillment of Ethical Corporate Management and Measures Taken.
	`2.`Reviewed the Company’s 2019 status report on the Company's wrongdoingor unethical conduct charges.
	Ethical Corporate Management Committee resolution: The proposals were passed unanimously by the Committee Members in attendance.
2nd Term Ethical Management Committee 1st Meeting (2020/08/28)	Reviewed the Company’s 2020 first half-year status report on the Company's wrongdoing or unethical conduct charges.
	Ethical Corporate Management Committee resolution: The proposals were passed unanimously by the Committee Members in attendance.

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Ethical Management Committee Term andDate	Proposal
2nd Term Ethical Management Committee 2nd Meeting (2021/01/29)	`1.` Reviewed the Company’s 2020 evaluation report on the fulfillment of Ethical Corporate Management and Measures Taken.
	`2.` Reviewed the Company’s 2020 status report on the Company's wrongdoingor unethical conduct charges.
	Ethical Corporate Management Committee resolution: The proposals were passed unanimously by the Committee Members in attendance.

B. Responsibilities of the Company's Ethical Management Committee:
1.Assist in incorporating ethics and moral values into the Company's business strategy and adopt appropriate prevention measures against corruption and malfeasance to ensure ethical corporate management in compliance with the requirements of laws and regulations.
2.Adopt programs to prevent unethical conduct, establish standard operating procedures, and conduct guidelines with respect to the Company's operations and business in each program.
3.Plan internal organization, structure, and allocation of responsibilities and establish check-and-balance mechanisms for mutual supervision of business activities within the Company's scope of businesses, which are possibly at a higher risk of unethical conduct.
Promote and coordinate awareness and educational activities with respect to ethics policies.
Develop a whistleblowing system and ensure its implementation effectiveness
Assist the Board of Directors and senior management in reviewing and assessing whether the preventive measures taken for implementing ethical corporate management are carried out effectively, and prepare reports on the regular assessment of compliance with ethical corporate management in operating procedures.
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3.3.6 Fulfillment of Social Responsibility and Deviations from the "Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies" and Reasons

Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from Corporate Social Responsibility Best Practice Principles for TWSE/TPEx listed companies and Reason
	Yes	No	Summary (Note 2)
1. Has the Company assessed the environmental, social, and corporate governance risks related to its operations based on the principle of materiality and established risk management policies or strategies? (Note 3)			The Company takes sustainable operations as the management goal and policy. In order to implement various sustainable management and related work of the Company, the "Corporate Social Responsibility Committee" was established in 2014 to comply with the four principles of GRI Standards. Based on the inclusiveness, sustainability, and integrity of the relationship to stakeholders, the four major processes of "identification, ranking, confirmation, and inspection" to build a materiality analysis model and understand the level of concern for each sustainability issue; analyze and prioritize through CSR group meetings and colleagues’ opinions feedback, to pinpoint environmental, social and corporate governance issues related to the company’s operations, establish management policies, and formulate relevant risk management policies or strategies to ensure the actions are effectively executed. Please refer to the Company’s Corporate Social ResponsibilityReport.	It is consistent with the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies
2. Has the company established an exclusively (or concurrently) dedicated unit for promoting CSR? Is the unit empowered by the Board of Directors to implement CSR activities at the executive level? Does the unit report the progress to the Board of Directors?			(1) The Company's Planning Department serves as the designated (part time) unit in charge of promoting corporate social responsibility. The department also reports the 2019 implementation of corporate social responsibility to the Board of Directors. (2) Concerning member composition, work plans and duties,the underwriting	It is consistent with the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from Corporate Social Responsibility Best Practice Principles for TWSE/TPEx listed companies and Reason
	Yes	No	Summary (Note 2)
			departments are responsible for the development of new products, whereas the claim departments are responsible for innovations to enhance service quality. The Planning Department is responsible for handling consumer disputes, while the Finance Department and Legal Compliance Department are responsible for strengthening the functions of the Board of Directors, the disclosure of financial and non-financial information, and risk management. Human Resources Department is responsible for protecting employee interests and related benefits, education and training associated with corporate social responsibility as well as related community engagement and social welfare activities with the Taiwan Fire & Marine Foundation established by the Company through donations. The Administrative Management Unit of the President's Office is responsible for supplier management and environmental protection tasks.
3.Environmental issues (1) Does the company establish a proper environmental management system based on the characteristics of the industry?			(1) The Company has established labor safety systems and a safety and sanitation self-management system in accordance with regulations for the financial and insurance industry. Even without the ISO 14001 environmental system	It is consistent with the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from Corporate Social Responsibility Best Practice Principles for TWSE/TPEx listed companies and Reason
	Yes	No	Summary (Note 2)
(2) Is the company committed to improving efficiency of resources and utilizing renewable resources with reduced environmental impact?			requirement, we still follows related environmental protection regulations to protect the natural environment through appropriate actions. All efforts are dedicated to environmental sustainability in our business operations. (2) The company is committed to continuously improving efficiency of various resources and to reduce impact on the environment: A. Regular maintenance and cleaning of the air filters of the air-conditioning system and the cooling tower are regularly conducted to increase cooling effects. B. A paperless office is been promoted, with the establishment of various cloud-based operating systems, adopting Internet bulletin boards, and uses electronic approvals to replace paper approvals to reduce energy consumption and carbon emissions. C. Employees are required to use their own cups to reduce paper cup usage and envelops are reused for internal delivery. D. Water-saving toilets and water-saving gaskets on faucets are installed for water conservation. E. Environmental friendly toner cartridges for copiers and printers are used throughout and the cartridges are

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from Corporate Social Responsibility Best Practice Principles for TWSE/TPEx listed companies and Reason
	Yes	No	Summary (Note 2)
(3) Does the company evaluate potential risks and opportunities brought by climate change, and take response measures to climate-related issues? (4) Does the company compile statistics of greenhouse gas emissions, water use, and total weight of waste in the past twoyears,and does it establish	 		recycled by professional companies after use. Recycling bins are set up to promote recycling and reduce waste. (3) Extreme climate change causes frequent natural disasters worldwide, which will have a negative impact on economic activities and the impact of financial markets. Taiwan is located in a region where typhoons and earthquakes occur frequently. In response to natural disasters, the losses for finance or business may result in the operational risks of the Company. The Company has an emergency response team to implement safety protection drills. When faced with serious disasters, it can effectively improve the ability of the Company to deal with crisis, to reduce personnel, estate or property losses of the insured customers. For natural disaster insurance business that may cause serious losses, the well-known natural disaster models, namely Risk Management Solutions® (RMS) and AIR Worldwide® (AIR), carry out natural disaster risk analysis. The results showed that the financial structure of the Company has sufficient solvency to bear the natural disaster risks. (4) The Company is a financial services company and its business operations are less affected by climate change. As most GHG emissions originate frompower

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from Corporate Social Responsibility Best Practice Principles for TWSE/TPEx listed companies and Reason
	Yes	No	Summary (Note 2)
policies for energy conservation & carbon reduction, greenhouse gas emission reduction, water use reduction, and other waste management?			consumption, the Company has established the "Energy Conservation and Carbon Emissions Reduction Measures" and "Cost Saving Implementation Guidelines" to adopt power consumption reduction as the main method for reducing carbon emissions. It also continuously advances administration measures based on energy management to actively promote various energy conservation plans. The plans include an estimated reduction of 4.4 metric tons in carbon emissions each year from 2017 to 2019. The energy conservation measures includes but not limited to (1) divid the office space into manageable sections, and maintain office temperature to be between 26℃ and 28℃, using air fans when necessary, and A/C off during non-working hours; (2) divid the office space into manageable sections, lights off during breaks; (3) establish power conservation modes on printers; when appliances or equipment (such as computers and printers) are not used for an extended periods of time (such as meetings, business trips, lunch breaks, non-office hours or holidays); and (4) measures for the reduction of water, oil, and paper consumption are described in Point 1 of the evaluation item.

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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from Corporate Social Responsibility Best Practice Principles for TWSE/TPEx listed companies and Reason
	Yes	No	Summary (Note 2)
4. Social issues (1) Has the company referred to relevant laws and international human rights instruments to formulate relevant management policies and procedures? (2) Does the company have reasonable employee compensation strategy (including salaries, leave, and other benefits), and reward employees based on company performance and profits? (3) Has the company provided employees with a safe and	  		(1) The Company abided by labor-related laws and respects internationally recognized basic labor human rights, and has formulated the policies and specific practices for human rights protection. Related management policies and procedures guaranteed the legal rights of employees. There was no differential treatment in employment; employees were not discriminated on gender, race, marital status, religion, and other factors; and no forced or compulsory for labor, violation of interests and other situations occurred. (2) The Company had working rules in accordance with the law, which implemented matters related to employee welfare and salaries, vacation days, and various benefits. There is also a Remuneration Committee to regularly review the evaluation of performance for manager and the compensation policies. In addition, through the fair and comprehensive system for performance management, the overall strategic goals of the Company and the personal work goals of colleagues were connected, and colleagues with excellent performance were affirmed and rewarded to ensure the salary level was competitive in the market. (3) In order to maintain the safety of employees,the Companyset up	It is consistent with the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies
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Assessed Item		Current Operation (Note 1)	Current Operation (Note 1)	Deviation from Corporate Social Responsibility Best Practice Principles for TWSE/TPEx listed companies and Reason
	Yes	No	Summary (Note 2)
healthy work environment as well as offered regular classes on health and safety? (4) Has the Company established an effective competency development career training program for employees? (5) Does the company comply with relevant regulations and international standards in customer health and safety, customer privacy, and marketing and labeling its goods and services, and has it established consumer rights protection policies and complaint procedures?	 		"Safety and Hygiene Work Code," occupational safety and health supervisors and first-aid personnel, enhanced the safety awareness of employees through continuous training courses. For maintaining the health of employees, a health e-newsletter is being issued monthly, there are on-site services of medical personnel, and annual health inspections held to maintain the health of employees and ensure the work-life balance of employees. (4) To create a good environment for career development of employees, the Company applies the performance interviews to let employees understand their personal performance and future development, and establishes adaptive training programs to integrate corporate development with personal goals. (5) The Company's products such as the insurance policies and policy wordings are all processed in accordance with the "Guidelines for the Review of Personal Insurance Products,” "Guidelines for the Review of Property Insurance Products,” the "Regulations Governing Pre-Sale Procedures for Insurance Products" and related regulations. The brochures used for marketing purposes are compiled in accordance with the "Self-Regulation Guidelines Governing Solicitation Advertisements of Insurance

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Assessed Item	Current Operation (Note 1)	Current Operation (Note 1)	Current Operation (Note 1)	Deviation from Corporate Social Responsibility Best Practice Principles for TWSE/TPEx listed companies and Reason
	Yes	No	Summary (Note 2)
(6)Does the company have a supplier management policy; require suppliers to comply with regulations on environmental protection, occupational safety and health, and labor rights, and what is its implementation status?			Enterprises.” With regard to services, all employees are required to obtain Salespersons' Licenses. They shall complete education and training hours to meet the regulatory requirements each year and provide Salespersons' business reports in accordance with regulatory requirements and KYC analyses to safeguard consumer interests. (6) When purchasing air-conditioning units and office appliances such as printers and fax machines, it shall consider whether the products of suppliers meet energy conservation requirements based on environmental protection regulations or standards.
5.Does the company reference Internationally accepted reporting standards or guidelines, and prepare reports that disclose non-financial information of the company, such as corporate social responsibility reports? Do the reports above obtain assurance from a third party verification unit?			The Company invited British Standards Institution (BSI) to conduct third-party verification on reports produced by the Company, confirming that the reporting principles were in accordance to the GRI Standards.	It is consistent with the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies
6. Where the company has formulated its own Best Practices on CSR according to the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies, please describe any gap between the prescribed best practices and actual activities taken by the company: The Company has established Corporate Social Responsibility Best Practice Principles and all units are required topractice CSR in accordance with these Principles.
7. Other important information helpful in understanding the CSR operation: (1) Environmental Protection: A. The Company implements green procurement and always selecting suppliers who promotes environmentally friendly materials and waste reduction. B. To conserve energy and reduce carbon emissions, the Company implements flexible start-up and shut-down time of the chiller accordingto seasons. From Mayto September,the chiller operates between

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Assessed Item	Current Operation (Note 1)	Current Operation (Note 1)	Current Operation (Note 1)	Deviation from Corporate Social Responsibility Best Practice Principles for TWSE/TPEx listed companies and Reason
	Yes	No	Summary (Note 2)
7:30 to 17:30. From October to April, the chiller operates between 8:30 to 17:00. C. Combine residential fire insurance policy and receipts to be printed together to effectively reduce the number of printed pages and paper consumption. D. Promote a paperless office, establishing various cloud-based operating systems, adopting Internet bulletin boards and using electronic approvals to replace paper approvals to reduce energy consumption and carbon emissions. E.Actively promote digital insurance certificates for mandatory vehicle liability insurance and optional digital vehicle insurance policies in the automobile insurance business. Adopt paperless operations as the goal to reduce paper consumption, protect the environment, reduce carbon emissions, and fulfill social responsibilities. (2)Community involvement and social welfare: In order to fulfill our corporate social responsibility and uphold the concept of "cherishing this moment and protecting the future", we established the "Taiwan Fire & Marine Foundation" in September 2015 to integrate resources and invest in community involvement and social welfare. Sponsorships in 2020 are as follows: 1. Sponsored the 12th C.K. Cup National Little Baseball Championship, sponsored the University of Taipei’s Women's Softball Team, participated in the corporate league under the TFMI Pitbull Team, and formed the Taoyuan TFMI Men's Volleyball Team with the Taoyuan City Government to participate in the Taiwan Volleyball League (TVL-16) and sponsored the 18th "Dance 30 Intra-School Street Dance Championship" and other sports activities, and co-organized the "Financial Management and Health Trends Forum" with renowned financial magazine Wealth Invest Weekly. 2. Sponsored the Paper Windmill Educational Foundation, the Greenray Theatre Company and other art troupes to hold various arts and cultural activities, and supported Paper Windmill’s "Save Faust" Project, which actively promotes campus anti-drug outreach activities. Donation made to the First Social Welfare Foundation, the First Children’s Development Center, the Andrew Charity Association, the Eden Social Welfare Foundation, and the Taoyuan City Spinal Cord Injury Potential Development Center. The Company is committed to promoting special education for special-needs children with developmental disabilities, and take care of disadvantaged groups and the elderly. In addition, to assist the elderly who are economically disadvantaged and need home repairs (priority is given to the elderly living alone, elderly couples, and rural families) for accessible facilities planning and construction. The Company has also donated a repair tour vehicle to the Eden Social Welfare Foundation. (3) Human rights: The Company follows labor-related laws and respects internationally recognized basic labor human rights. "Human Rights Concerns and Specific Practices" is disclosed on the Company website. In addition, in order to provide unobstructed communication channel for employees, Company has set up regulations "Prevention and Control Measures of Sexual Harassment in the Workplace" with direct phonelinesfor reporting purposes,"Employee Complaint Handling Methods," and held "Labor-Management Meetings" quarterly. For the promotion of rewards and punishments for employees, a Personnel Review Committee is set up and meet regularly to review employees in a fair and just manner. (4) Health and Sanitation: The Company has been adapting guidelines from the Occupational Safety and Health Act and related regulations since August 2005. It then assigned a total of 11 employees from various units to takepart in Class A,B,and C supervisor trainingfor

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Assessed Item	Current Operation (Note 1)	Current Operation (Note 1)	Current Operation (Note 1)	Deviation from Corporate Social Responsibility Best Practice Principles for TWSE/TPEx listed companies and Reason
	Yes	No	Summary (Note 2)
occupational safety in business entities. They serve as occupational safety and health supervisors after the completion of training. The Company also established the Employee Safety and Health Work Rules and the Safety and Health Management System Manual. The above regulations have been registered with local Labor Bureaus and announced on the "Employee Safety and Health" section on the internal webpage as reference for all employees. The occupational safety and health supervisor of each unit implements various automatic inspection systems and education and training programs to achieve thegoal of "zero-incident.”

Note 1: Under the "Status of Operations," if "Yes", please explain the key policies, strategies, measures adopted and implementation results; if "No", please give the reason and specify policies, strategies, and measures to be adopted in the future.
Note 2: Companies have compiled CSR reports may specify the ways to access the CSR and the page numbers of the cited content in place of the above-requested description.
Note 3:The principle of materiality referred to environmental, social and corporate governance issues that have significant impacts on the investors of company and other stakeholders.
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3.3.7 Implementation of Ethical Management and Measures

Assessed Item			Current Operation(Note)	Deviation from Ethical Corporate Management Best Practice Principles for TWSE or TPEx Listed Companies and Reasons
	Yes	No	Summary
1. Formulating Ethical Corporate Management Policies and Programs (1) Has the Company established an ethical policy that was approved by the Board of Directors, and declare its ethical corporate management policy and methods in its internal regulations and external documents, as well as the commitment of its Board and management to implement the policies? (2) Has the company established mechanisms for assessing the risk of unethical conduct, periodically analyze and assess operating activities within the scope of business with relatively high risk of unethical conduct, and formulate an unethical conduct prevention plan on this basis, which at least includes preventive measures for conduct specified in Article 7, Paragraph 2 of the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies?	 		(1)The Company has established its Ethical Corporate Management Best Practice Principles that specify its ethical corporate management policies and the commitment of the Board of Directors and senior management to actively implement these principles. (2)The Company has "Ethical Corporate Management Best Practice Principles," "Guidelines for Preventing Dishonest Conducts" and "Fraudulent or Dishonest Conduct & Whistleblower Policy" and "Code of Ethical Conduct" as guidelines, prohibiting Directors, managers, and all employees of the Company from engaging in business activities stipulated in the Paragraph 2 of Article 7 of the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies" or in other business activities. Speccifically prohibiting bribery, fraud, insider trading and other dishonest behaviors, with thorough investigation and disciplinary actions guidelines. In the event of confirmed violations,the	It is consistent with the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item			Current Operation(Note)	Deviation from Ethical Corporate Management Best Practice Principles for TWSE or TPEx Listed Companies and Reasons
	Yes	No	Summary
			punishment will be imposed according to the severity of the circumstances. In addition to regulating donations in the "Rules of Procedures of Board Meetings," it also sets the "Regulations for Donations" to strengthen the management of various donations; the "Rules of Employement" also clearly stipulated that employees should not use their powers to obtain illegal benefits, and accept hospitality, gifts, and kickbacks, and prevent improper acts such as bribery and illegal political contributions. In addition, the Company has insurance product development committee to assess the legal compliance, consumer rights and price reasonableness associated with insurance products. The Company also set forth relevant guidelines in the "Ethical Corporate Management Best Practice Principles" to prevent products or services from directly or indirectly harming the interests, health and safety of customers or other stakeholders, and monitor the appropriateness and legality of insurance products. The Company has completedthe self-assessment of business activities with high risk of unethical conduct within its business scope on October 6, 2020, and the relevant results	It is consistent with the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item			Current Operation(Note)	Deviation from Ethical Corporate Management Best Practice Principles for TWSE or TPEx Listed Companies and Reasons
	Yes	No	Summary
(3) Did the company specify operating procedures, guidelines for conduct, punishments for violation, rules of appeal in the unethical conduct prevention plan, and has the plan been implemented, periodically reviewed and revised?			have been compiled and provided to theAudit Office as 2021 Audit Plan reference. (3)The Company has established the Guidelines on the Prevention of Unethical Conduct, which specify various forms of unethical conduct, as well as the control mechanism and operating procedures for preventing unethical conduct. Furthermore, the Company has established its Work Rules and the Guidelines for the Adoption of Codes of Ethical Conduct that are promoted to all the employees of the Company so that they fully understand and follow through. At the beginning of each year, when the Board of Directors presented the previous period report on the status of ethical corporate management, the "Ethical Corporate Management Best Practice Principles" will be reviewedfor necessaryrevision	It is consistent with the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies
2. Implementing Ethical Corporate Management (1) Does the company evaluate the ethical records of parties it does business with and stipulate ethical conduct clauses in business contracts? (2) Did the company establish a dedicated unit under the board of directors to promote ethical corporate anagement, and periodically (at least once ayear)report to the Board of	 		(1)The Company carefully chooses its counterparties during business dealings and pays attention to the ethics record of counterparties. The Company also includes terms on integrity and honesty in contracts it agrees upon. (2)The Company has established the Ethical Corportae Management Committee as the dedicated full-time unit for promoting ethical corporate management. This committee is responsible for	It is consistent with the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item			Current Operation(Note)	Deviation from Ethical Corporate Management Best Practice Principles for TWSE or TPEx Listed Companies and Reasons
	Yes	No	Summary
Directors and supervise the implementation of the ethical corporate management policy and unethical conduct prevention plan? (3) Does the company establish policies to prevent conflict of interests, provide appropriate channels for filing related complaints and implement the policies accordingly? (4) Does the company have effective accountingsystem	 		formulating ethical corporate management policies and prevention plans, monitoring the implementation of such policies and plans, as well as regularly reporting the implementation of ethical corporate management and the response measures taken to prevent events involving unethical conduct to the Board of Directors. (3) The Company has established rules for recusal of directors in the Rules of Procedure for Board of Directors' Meetings, in which resolutions involving the interests of any directors shall be voted upon in accordance with the rules of procedure. In addition, the Company has also established internal rules and regulations including the Regulations Governing the Prevention of Conflict of Interest and Insider Trading, the Guidelines on Financial Transactions and Trading with Stakeholders, the Internal Practice Guidelines on Transactions with Stakeholders, the Procedures for Handling Transactions with Stakeholders and the Guidelines on the Prevention of Conflicts of Interest of Persons Engaged in Investments in Domestic Equity Instruments to strictly implement policies for preventing conflicts of interest. (4) The Company has established an accountingsystem and hired	It is consistent with the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item			Current Operation(Note)	Deviation from Ethical Corporate Management Best Practice Principles for TWSE or TPEx Listed Companies and Reasons
	Yes	No	Summary
and internal control systems set up to facilitate ethical corporate management, does the internal auditing unit formulate audit plans based on unethical conduct risk assessment results, and does it audit compliance with the unethical conduct prevention plan or commission a CPA to perform the audit? (5) Does the company regularly hold internal and external educational trainings on ethical corporate management?			accounting personnel to take charge of accounting affairs. In addition, the Company also prepares financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Insurance Enterprises, and its financial statements are audited or reviewed by CPAs to ensure the fairness of financial statements. The Company established internal control systems and procedures for handling control operations in accordance with the Regulations Governing the Implementation of Internal Control and Auditing System of Insurance Enterprises. The Company has also set up the position of Chief Auditor and the Auditing Office, to carry out review of each department according to the annual audit plan for internal control implementation. Every year, the Company commissions Deloitte & Touche to perform external audit of the Company's Internal Control System, and prepare an internal control system audit report. (5)The Company regularly organizes on-the-job training sessions with regard to ethical corporate management every year so that the directors, managerial officers, employees, trustees and main controllers of the Company understand their commitment towards ethical corporate	It is consistent with the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item			Current Operation(Note)	Deviation from Ethical Corporate Management Best Practice Principles for TWSE or TPEx Listed Companies and Reasons
	Yes	No	Summary
			management, related policies and prevention plans, as well as the consequences of engaging in unethical behavior. Directors, senior managers, and company employees have completed mandatory hours of education and training for ethical corporate management. The number of training amounted to 901 instances and the total traininghours was 1,820 hours.	It is consistent with the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies
3. Implementation of the Company's Whistleblowing System (1) Does the company establish concrete whistleblowing and reward system and have a direct reporting channel in place, and assign an appropriate person to communicate with the alleged violator?			(1)For internal and external personnel who wish to report any case that is unlawful, unethical or in violation of the Company's ethical corporate management behavior and involves the Malfeasance Reporting System established by the Company, the Company has established a whistleblowing mailbox ([email protected]) on its official website to provide whistleblowers with a channel to report any malfeasance. After a case is filed, the Auditing Office will handle the case and identify the relevant facts. If it is confirmed that an employee has in fact violated relevant laws or the Company's ethical corporate management policies and regulations, punishments against the employee shall be handled in accordance with the Company's Work Rules and Regulations GoverningPersonnel Evaluation,	It is consistent with the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies

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Assessed Item	Current Operation(Note)	Current Operation(Note)	Current Operation(Note)	Deviation from Ethical Corporate Management Best Practice Principles for TWSE or TPEx Listed Companies and Reasons
	Yes	No	Summary
(2)Does the company establish standard procedures for investigating reported cases, and does it take subsequent measures and implement a confidentiality mechanism after completing investigation? (3)Does the company provide proper whistleblower protection?	 		and punishments shall also be publicly announced. (2)The Company has set up a specific whistleblowing system in accordance with its Ethical Corporate Management Principles, Malfeasance Reporting System and Guidelines on the Prevention of Unethical Behavior, with the purpose of preserving the confidentiality of whistleblowers’identities and the content of their reports, as well as protecting whistleblowers from inappropriate treatment due to whistleblowing. (3) The Company's Auditing Office is responsible for handling related whistleblowing cases and preserving strict confidentiality of whistleblowers' identities to prevent them from inappropriate treatment due to whistleblowing.	It is consistent with the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies
4.Enhancing Information Disclosure Does the company disclose its ethical corporate management practices and the implementation effectiveness of such practices on its official website or MOPS?			The Company has disclosed the implementation of ethical corporate management and the measures it has taken on its official website (https://www.tfmi.com.tw) and in annual reports. The Company keeps abreast of the development of domestic and overseas regulations associated with ethical corporate management from time to time, as well as reviews and improves its ethical corporate management policies in order to enhance the effectiveness of its ethicalcorporatemanagement.	It is consistent with the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies
5. If the Company has established its own Ethical Corporate Management Best Practice Principles in accordance with the Corporate Social ResponsibilityBest Practice Principles for TWSE or TPEx

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Assessed Item	Current Operation(Note)	Current Operation(Note)	Current Operation(Note)
	Yes	No	Summary
Listed Companies, state the deviation from the principles and its implementation: To enhance the Company's management and good business operations, the Company has established its own Ethical Corporate Management Principles in accordance with the Corporate Social Responsibility Best Practice Principles for TWSE or TPEx Listed Companies, with the purpose of demonstrating the Company's corporate culture that includes ethical corporate management and implementing its business philosophy which focuses on honesty, transparency and accountability. The Company also adheres to the implementation of these principles, which is consistent with the Ethical Corporate Management Best Practice Principles for TWSE or TPEx Listed Companies.
6. Other important information that facilitate the understanding of the implementation of ethical corporate management: (such as review and amendment of the Company's Ethical Corporate Management Best Practice Principles): The Company introduces the implementation of ethical corporate management in the Company through various types of advertising, public welfare activities and talent recruitment events in universities, thereby enabling the public to understand the Company's ethical corporate management belief.

Note: Brief descriptions are provided in the appropriate column, regardless whether "yes" or "no" is selected.

3.3.8 Methods of inquiry on the Corporate Governance Best Practice Principles and related regulations established by the Company:

On the Company's official website, within the “Investor Section,” a corporate governance section is available where investors can find reference to the Corporate Governance Code and related regulations. The website is https://www.tfmi.com.tw.

3.3.9 Other important information for better understanding of implementation of corporate governance may be disclosed.

A . The Company enacted the "Procedures for Material Information Handling" to prevent insider trading and establish mechanisms for handling and disclosing material insider information; preventing inappropriate leaks of information for ensuring the consistency and accuracy of information disseminated to external entities. The Procedures are placed on the Company's internal regulations section for all employees to follow and the provide relevant course and training for the directors, managers, and employees regarding the Procedures at least once every year to prevent violations or insider trading.
87 -

Implementation of Insider Trading Prevention:

When	Who	Course Content
Oct 30, 2020	Directors / Independent Directors	Internal Material Information Handling Procedure, Confidentiality Statement, Reasons and how to identify Insider Trading and examples.
July – December 2020 E-learning	Managers / Employees

Note: Total trainees: 908 people, total training hours: 453.5 hours.

B. As a responsible institutional investor, to improve corporate governance, make full use of the Company's funding, exercise the Company's influence on the market and investee, the Company signed a compliance statement for the "Stewardship Principles" on June 28, 2018 and published the said information on the Corporate Governance Center of Taiwan Stock Exchange and the Company's official website.

C. Continuing education of the Company Directors in 2020

Title	Name	Date of Appointm ent	Training Date	Organizer	Course Title	Training Hours	Training in compliance with regulation or not
Chairman	Steve Lee	`2020.06.12`	`2020.09.29`	Taiwan Corporate Governance Association	The Impact of IFRS 17 and ICS on the Nonlife Insurance Industry and CorrespondingResponse	`6`	Yes
			`2020.09.29`	Taiwan Corporate Governance Association	Introduction to Anti-corruption and Money Laundering Prevention Regulations and Practical Case Analysis
Director	Charles Sung	`2020.06.12`	`2020.09.29`	Taiwan Corporate Governance Association	The Impact of IFRS 17 and ICS on the Nonlife Insurance Industry and CorrespondingResponse	`6`	Yes
			`2020.09.29`	Taiwan Corporate Governance Association	Introduction to Anti-corruption and Money Laundering Prevention Regulations and Practical Case Analysis
Director	Chung-Chou Chang	`2020.06.12`	`2020.03.16`	Associattion of Taiwan Listed Companies	Eastern Leaders Seminar - Environmental Protection in Taiwan	`10`	Yes
			`2020.09.29`	Taiwan Corporate Governance Association	The Impact of IFRS 17 and ICS on the Nonlife Insurance Industry and CorrespondingResponse
			`2020.09.29`	Taiwan Corporate Governance Association	Introduction to Anti-corruption and Money Laundering Prevention Regulations and Practical

88 -

Title	Name	Date of Appointm ent	Training Date	Organizer	Course Title	Training Hours	Training in compliance with regulation or not
					Case Analysis
			`2020.11.09`	Associattion of Taiwan Listed Companies	Eastern Leaders Seminar - Opportunities for the Development of Precision Health Care Industry in Taiwan
Director	Bin-Fu Chen	`2020.06.12`	`2020.09.29`	Taiwan Corporate Governance Association	The Impact of IFRS 17 and ICS on the Nonlife Insurance Industry and CorrespondingResponse	`6`	Yes
			`2020.09.29`	Taiwan Corporate Governance Association	Introduction to Anti-corruption and Money Laundering Prevention Regulations and Practical Case Analysis
Director	Wen-Chang Chen	`2020.06.12`	`2020.09.29`	Taiwan Corporate Governance Association	The Impact of IFRS 17 and ICS on the Nonlife Insurance Industry and CorrespondingResponse	`6`	Yes
			`2020.09.29`	Taiwan Corporate Governance Association	Introduction to Anti-corruption and Money Laundering Prevention Regulations and Practical Case Analysis
Director	Tze-Yue Chen	`2020.06.12`	`2020.09.10`	Taiwan Insurance Institute	Seminar on Corporate Governance for Directors and Supervisors (including Independent) and Corporate Governance Executives - Weaknesses in the Implementation of Internal Information Security System from the Perspective of Corporate Governance	`3`	Yes
			`2020.09.16`	Taiwan Insurance Institute	Seminar on Corporate Governance for Directors and Supervisors (including Independent) and Corporate Governance Executives -Enhancing Board Functions - Roles and Responsibilities of Professional Managers and Major Shareholders in Nonlife Insurance	`9`	Yes

89 -

Title	Name	Date of Appointm ent	Training Date	Organizer	Course Title	Training Hours	Training in compliance with regulation or not
			`2020.09.29`	Taiwan Corporate Governance Association	The Impact of IFRS 17 and ICS on the Nonlife Insurance Industry and CorrespondingResponse
			`2020.09.29`	Taiwan Corporate Governance Association	Introduction to Anti-corruption and Money Laundering Prevention Regulations and Practical Case Analysis
Director	Mei-Ling Wu	`2020.06.12`	`2020.09.29`	Taiwan Corporate Governance Association	The Impact of IFRS 17 and ICS on the Nonlife Insurance Industry and CorrespondingResponse	`6`	Yes
			`2020.09.29`	Taiwan Corporate Governance Association	Introduction to Anti-corruption and Money Laundering Prevention Regulations and Practical Case Analysis
Director	Julie Lee	`2020.06.12`	`2020.09.29`	Taiwan Corporate Governance Association	The Impact of IFRS 17 and ICS on the Nonlife Insurance Industry and CorrespondingResponse	`6`	Yes
			`2020.09.29`	Taiwan Corporate Governance Association	Introduction to Anti-corruption and Money Laundering Prevention Regulations and Practical Case Analysis
Independent Director	Nien-Tsu Chiang	`2020.06.12`	`2020.09.10`	Taiwan Insurance Institute	Seminar on Corporate Governance for Directors and Supervisors (including Independent) and Corporate Governance Executives - Weaknesses in the Implementation of Internal Information Security System from the Perspective of Corporate Governance	`12`	Yes
			`2020.09.16`	Taiwan Insurance Institute	Seminar on Corporate Governance for Directors and Supervisors (including Independent) and Corporate Governance Executives - Enhancing Board Functions - Roles and Responsibilities of Professional Managers and Major Shareholders in Nonlife Insurance

90 -

Title	Name	Date of Appointm ent	Training Date	Organizer	Course Title	Training Hours	Training in compliance with regulation or not
			`2020.09.29`	Taiwan Corporate Governance Association	The Impact of IFRS 17 and ICS on the Nonlife Insurance Industry and CorrespondingResponse
			`2020.09.29`	Taiwan Corporate Governance Association	Introduction to Anti-corruption and Money Laundering Prevention Regulations and Practical Case Analysis
Independent Director	Cheng Ching Huang	`2020.06.12`	`2020.09.29`	Taiwan Corporate Governance Association	The Impact of IFRS 17 and ICS on the Nonlife Insurance Industry and CorrespondingResponse	`6`	Yes
			`2020.09.29`	Taiwan Corporate Governance Association	Introduction to Anti-corruption and Money Laundering Prevention Regulations and Practical Case Analysis
Independent Director	Jimmy T. Hsieh	`2020.06.12`	`2020.09.29`	Taiwan Corporate Governance Association	The Impact of IFRS 17 and ICS on the Nonlife Insurance Industry and CorrespondingResponse	`6`	Yes
			`2020.09.29`	Taiwan Corporate Governance Association	Introduction to Anti-corruption and Money Laundering Prevention Regulations and Practical Case Analysis

D. The managers' participation in related corporate governance studies and training in 2019 was as follows:

Title	Name	Training Date	Course Title	Organizer	Hours
President	Charles Sung (Note 1)	`2020.09.29`	The Impact of IFRS 17 and ICS on the Nonlife Insurance Industry and CorrespondingResponse	Taiwan Corporate Governance Association	`3`
		`2020.09.29`	Introduction to Anti-corruption and Money Laundering Prevention Regulations and Practical Case Analysis	Taiwan Corporate Governance Association	`3`
Executive Vice President	Charles Sung (Note 2)	`2020.07.09-` `2020.09.28`	Advanced Management and Practical Study Series for the Nonlife Insurance Industry	Taiwan Insurance Institute	`121`
		`2020.10.15`	The Environment, Challenges and Opportunities for the Insurance Industryunder the New Risk Trends	Taiwan Insurance Guaranty Fund	`7`

91 -

Title	Name	Training Date	Course Title	Organizer	Hours
		`2020.12.11`	Insurance and Economic Development Forum 2021	Taiwan Insurance Institute	`6`
Senior Vice President	Nicholas N.C. Sheu	`2020.01.16`	Intellectual Property Management Obligations Awareness Campaign for the Board of Directors of Listed Companies	Industrial Development Bureau, Ministry of Economic Affairs	`2.5`
		`2020.07.15`	Post-Pandemic Business Growth, Restructuring or Transformation - A Practical Case Study	Independent Director Association Taiwan	`3`
		`2020.08.12`	The Role of Independent Directors in Corporate Governance and Management Disputes - A Case Study	Independent Director Association Taiwan	`3`
		`2020.09.10`	Seminar on Corporate Governance for Directors and Supervisors (including Independent) and Corporate Governance Executives - Weaknesses in the Implementation of Internal Information Security System from the Perspective of Corporate Governance	Taiwan Insurance Institute	`3`
		`2020.09.29`	The Impact of IFRS 17 and ICS on the Nonlife Insurance Industry and CorrespondingResponse	Taiwan Corporate Governance Association	`3`
		`2020.09.30`	2020 Insurance Industry Corporate Governance Seminar	Financial Supervisory Commission R.O.C.(Taiwan) Insurance Buerau	`5.5`
		`2020.10.16`	2020 Corporate Governance and Corporate Ethics Directors and Supervisors Seminar	Taiwan Stock Exchange Corporation.	`3`
General Auditor	Su-Chen Lin	`2020.09.30`	2020 Insurance Industry Corporate Governance Seminar	Financial Supervisory Commission R.O.C.(Taiwan) Insurance Buerau	`5.5`
		`2020.10.23`	2020 Insurance New Vision Seminar	Tawian Financial Services Roundtable	`3`
		`2020.11.13`	Insurance Industry Internal Audit Roundtable	Financial Examination Bureau, Financial SupervisoryCommission	`3`
Chief Compliance Officer	Hsien-Chang Huang	`2020.03.09`	Money Laundering Control Act Workshop - OJT Fundamentals Course	Taiwan Insurance Institute	`3`
		`2020.07.07-` `2020.07.28`	2020 Compliance Officers OJT	Taiwan Insurance Institute	`15`
		`2020.08.06-` `2020.08.27`	OJT of Anti-Money Laundering and CounteringFinancingTerrorism	Taiwan Insurance Institute	`12`
		`2020.08.21`	National Financial Industry Corporate Integrity and Compliance Seminar	Tawian Financial Services Roundtable	`4`

92 -

Title	Name	Training Date	Course Title	Organizer	Hours
		`2020.09.15`	How does the Nonlife Insurance Industry Improve Communication with External Stakeholders to Meet the Challenges of IFRS17	Taiwan Insurance Institute	`3`
		`2020.09.16`	Roles and Responsibilities of Managers and Major Shareholders in Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
		`2020.09.17`	2020 Seminar for Enhancing Legal Compliance in the Insurance Industry	Financial Supervisory Commission R.O.C.(Taiwan) Insurance Buerau	`5`
		`2020.09.30`	2020 Insurance Industry Corporate Governance Seminar	Financial Supervisory Commission R.O.C.(Taiwan) Insurance Buerau	`5.5`
Vice President	Chih-Chieh Huang	`2020.07.07-` `2020.07.28`	2020 Compliance Officers OJT	Taiwan Insurance Institute	`15`
		`2020.08.18`	Investment Risk Assessment and Compliance for the Nonlife insurance companies	Taiwan Insurance Institute	`3`
		`2020.09.15`	How does the Nonlife Insurance Industry improve Communication with External Stakeholders to Meet the Challenges of IFRS17	Taiwan Insurance Institute	`3`
		`2020.09.16`	Roles and Responsibilities of Managers and Major Shareholders in Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
		`2020.09.17`	2020 Seminar for Enhancing Legal Compliance in the Insurance Industry	Financial Supervisory Commission R.O.C.(Taiwan) Insurance Buerau	`5`
Vice President	Jih-Min Chan	`2020.04.30`	Internal Auditing and Internal Control - Advanced Supervisor Course	Taiwan Insurance Institute	`3`
		`2020.11.13`	Insurance Industry Internal Audit Roundtable	Financial Examination Bureau, Financial SupervisoryCommission	`3`
Senior Manager	Stanley Fang	`2020.07.07-` `2020.07.28`	2020 Compliance Officers OJT	Taiwan Insurance Institute	`15`
		`2020.08.18`	Investment Risk Assessment and Compliance for the Nonlife insurance companies	Taiwan Insurance Institute	`3`
		`2020.09.15`	How does the Nonlife Insurance Industry Improve Communication with External Stakeholders to Meet the Challenges of IFRS17	Taiwan Insurance Institute	`3`
		`2020.09.16`	Roles and Responsibilities of Professional Managers and Major Shareholders in Nonlife Insurance	Taiwan Insurance Institute	`3`

93 -

Title	Name	Training Date	Course Title	Organizer	Hours
Senior Vice President	Andrew Hsieh	`2020.09.17`	2020 Seminar for Enhancing Legal Compliance in the Insurance Industry	Financial Supervisory Commission R.O.C.(Taiwan) Insurance Buerau	`5`
Senior Vice President	Allen Cheng	`2020.09.02`	Insurance Operations - Essential Management Skills for Senior Executives	Taiwan Insurance Institute	`3`
Vice President	Hsin-Chu Lin	`2020.08.19`	Latest Updates on Insurance Regulation Amendments	Taiwan Insurance Institute	`3`
		`2020.08.27`	Risk Management and Nonlife Insurance Operations - Personal Accident and Health Insurance	Taiwan Insurance Institute	`3`
		`2020.09.04`	Product Development and Opportunities for the International Nonlife Insurance Industry in the Post-Pandemic Era	Taiwan Insurance Institute	`3`
		`2020.09.28`	The Latest Domestic and International Trends in the Development of Insurance Products	Taiwan Insurance Institute	`3`
		`2020.12.11`	Insurance and Economic Development Forum 2021	Taiwan Insurance Institute	`6`
Vice President	Jack Chung	`2020.08.26`	Risk Management and Development Trends in Nonlife Insurance - Business Continuity, Emergency Response and Crisis Management	Taiwan Insurance Institute	`3`
		`2020.08.31`	The Impact of IFRS17 on the Business Strategy of the Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
Vice President	Yuan-Yi Liao	`2020.08.31`	The Impact of IFRS17 on the Business Strategy of the Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
Senior Manager	Yu-Jen Hsiao	`2020.07.07-` `2020.07.28`	2020 Compliance Officers OJT	Taiwan Insurance Institute	`15`
		`2020.08.06-` `2020.08.27`	OJT of Anti-Money Laundering and CounteringFinancingTerrorism	Taiwan Insurance Institute	`12`
		`2020.09.08`	Digital Transformation of the Nonlife Insurance Industry - New Direction for Talent Development	Taiwan Insurance Institute	`3`
		`2020.09.15`	Financial Technology Development and Business Trends	Taiwan Insurance Institute	`3`
Senior Manager	Yung-Fu Su	`2020.08.19`	Latest Updates on Insurance Regulation Amendments	Taiwan Insurance Institute	`3`
		`2020.09.04`	Product Development and Opportunities for the International Nonlife Insurance Industry in the Post-Pandemic Era	Taiwan Insurance Institute	`3`
		`2020.09.08`	Experience Sharing on the Operations of the Nonlife Insurance Industry - Corporate Insurance Practice	Taiwan Insurance Institute	`3`

94 -

Title	Name	Training Date	Course Title	Organizer	Hours
		`2020.09.28`	The Latest Domestic and International Trends in the Development of Insurance Products	Taiwan Insurance Institute	`3`
Senior Manager	Chih-Hung Wang	`2020.08.31`	The Impact of IFRS17 on the Business Strategy of the Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
		`2020.09.08`	Digital Transformation of the Nonlife Insurance Industry - New Direction for Talent Development	Taiwan Insurance Institute	`3`
		`2020.09.10`	Weaknesses in the Implementation of Internal Information Security System from the Perspective of Corporate Governance	Taiwan Insurance Institute	`3`
Senior Manager	Jeffrey C. Chen	`2020.08.19`	Latest Updates on Insurance Regulation Amendments	Taiwan Insurance Institute	`3`
		`2020.08.27`	Risk Management and Nonlife Insurance Operations - Personal Injuryand Health Insurance	Taiwan Insurance Institute	`3`
		`2020.09.01`	Business Strategies of Key Sales Channels in the Nonlife Insurance Industry and Response to Cyclical Impacts in the International Nonlife Insurance Market	Taiwan Insurance Institute	`3`
		`2020.09.03`	Building a Holistic Compliance Culture in the Insurance Industry - MarketingStrategyvs. Compliance	Taiwan Insurance Institute	`3`
		`2020.09.11`	Evaluation and Management of the Performance of the Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
Senior Manager	Hong-Hsing Chuang (Note 3)	`2020.08.06-` `2020.08.27`	OJT of Anti-Money Laundering and CounteringFinancingTerrorism	Taiwan Insurance Institute	`12`
		`2020.09.04`	Product Development and Opportunities for the International Nonlife Insurance Industry in the Post-Pandemic Era	Taiwan Insurance Institute	`3`
		`2020.09.28`	The Latest Domestic and International Trends in the Development of Insurance Products	Taiwan Insurance Institute	`3`
Senior Manager	Kent Lee	`2020.08.26`	Risk Management and Development Trends in Nonlife Insurance - Business Continuity, Emergency Response and Crisis Management	Taiwan Insurance Institute	`3`
		`2020.09.01`	Business Strategies of Key Sales Channels in the Nonlife Insurance Industry and Response to Cyclical Impacts in the International Nonlife Insurance Market	Taiwan Insurance Institute	`3`
		`2020.09.03`	Building a Holistic Compliance Culture in the Insurance Industry - MarketingStrategyvs. Compliance	Taiwan Insurance Institute	`3`

95 -

Title	Name	Training Date	Course Title	Organizer	Hours
		`2020.09.11`	Evaluation and Management of the Performance of the Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
Senior Manager	Stanley Chao	`2020.08.26`	Risk Management and Development Trends in Nonlife Insurance - Business Continuity, Emergency Response and Crisis Management	Taiwan Insurance Institute	`3`
		`2020.08.31`	The Impact of IFRS17 on the Business Strategy of the Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
Senior Manager	Chyi- Shyang Chio	`2020.08.26`	Risk Management and Development Trends in Nonlife Insurance - Business Continuity, Emergency Response and Crisis Management	Taiwan Insurance Institute	`3`
		`2020.08.31`	The Impact of IFRS17 on the Business Strategy of the Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
Senior Manager	Jonathan Tu	`2020.08.26`	Risk Management and Development Trends in Nonlife Insurance - Business Continuity, Emergency Response and Crisis Management	Taiwan Insurance Institute	`3`
		`2020.08.31`	The Impact of IFRS17 on the Business Strategy of the Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
Senior Manager	Steven Lin (Note 3)	`2020.08.26`	Risk Management and Development Trends in Nonlife Insurance - Business Continuity, Emergency Response and Crisis Management	Taiwan Insurance Institute	`3`
		`2020.08.31`	The Impact of IFRS17 on the Business Strategy of the Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
Senior Manager	Ming-Fang Rao	`2020.08.26`	Risk Management and Development Trends in Nonlife Insurance - Business Continuity, Emergency Response and Crisis Management	Taiwan Insurance Institute	`3`
		`2020.08.31`	The Impact of IFRS17 on the Business Strategy of the Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
Manager	Chin-Ho Lin (Note 4)	`2020.07.07-` `2020.07.28`	2020 Compliance Officers OJT	Taiwan Insurance Institute	`15`
		`2020.08.06-` `2020.08.27`	OJT of Anti-Money Laundering and CounteringFinancingTerrorism	Taiwan Insurance Institute	`12`
		`2020.09.15`	Financial Technology Development and Business Trends	Taiwan Insurance Institute	`3`
Manager	Eric Hsu	`2020.07.07-` `2020.07.28`	2020 Compliance Officers OJT	Taiwan Insurance Institute	`15`
		`2020.08.06-` `2020.08.27`	OJT of Anti-Money Laundering and CounteringFinancingTerrorism	Taiwan Insurance Institute	`12`

96 -

Title	Name	Training Date	Course Title	Organizer	Hours
		`2020.08.19`	Shaping a Corporate Culture of Money Laundering Prevention and Countering Terrorism Financing in the Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
		`2020.08.26`	Risk Management and Development Trends in Nonlife Insurance - Business Continuity, Emergency Response and Crisis Management	Taiwan Insurance Institute	`3`
		`2020.10.15`	The Environment, Challenges and Opportunities for the Insurance Industryunder the New Risk Trends	Taiwan Insurance Guaranty Fund	`7`
Manager	Wun-Bin, Hou	`2020.07.07-` `2020.07.28`	2020 Compliance Officers OJT	Taiwan Insurance Institute	`15`
		`2020.08.26`	Risk Management and Development Trends in Nonlife Insurance - Business Continuity, Emergency Response and Crisis Management	Taiwan Insurance Institute	`3`
		`2020.08.27`	Evaluation and Management of the Performance of the Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
		`2020.12.11`	Insurance and Economic Development Forum 2021	Taiwan Insurance Institute	`6`
Manager	Judy Liao	`2020.07.07-` `2020.07.28`	2020 Compliance Officers OJT	Taiwan Insurance Institute	`15`
		`2020.08.06-` `2020.08.27`	OJT of Anti-Money Laundering and CounteringFinancingTerrorism	Taiwan Insurance Institute	`12`
		`2020.09.01`	Business Strategies of Key Sales Channels in the Nonlife Insurance Industry and Response to Cyclical Impacts in the International Nonlife Insurance Market	Taiwan Insurance Institute	`3`
		`2020.09.03`	Building a Holistic Compliance Culture in the Insurance Industry - MarketingStrategyvs. Compliance	Taiwan Insurance Institute	`3`
		`2020.09.11`	Evaluation and Management of the Performance of the Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
Manager	April Wang	`2020.07.07-` `2020.07.28`	2020 Compliance Officers OJT	Taiwan Insurance Institute	`15`
		`2020.08.06-` `2020.08.27`	OJT of Anti-Money Laundering and CounteringFinancingTerrorism	Taiwan Insurance Institute	`12`
		`2020.08.11`	Opportunities and Challenges in the International Nonlife Insurance Market	Taiwan Insurance Institute	`3`
		`2020.09.01`	Business Strategies of Key Sales Channels in the Nonlife Insurance Industry and Response to Cyclical Impacts in the International Nonlife Insurance Market	Taiwan Insurance Institute	`3`

97 -

Title	Name	Training Date	Course Title	Organizer	Hours
		`2020.09.03`	Building a Holistic Compliance Culture in the Insurance Industry - MarketingStrategyvs. Compliance	Taiwan Insurance Institute	`3`
Manager	Nan-Chou Liu	`2020.07.07-` `2020.07.28`	2020 Compliance Officers OJT	Taiwan Insurance Institute	`15`
		`2020.08.06-` `2020.08.27`	OJT of Anti-Money Laundering and CounteringFinancingTerrorism	Taiwan Insurance Institute	`12`
		`2020.09.08`	Digital Transformation of the Nonlife Insurance Industry - New Direction for Talent Development	Taiwan Insurance Institute	`3`
		`2020.09.10`	Weaknesses in the Implementation of Internal Information Security System from the Perspective of Corporate Governance	Taiwan Insurance Institute	`3`
		`2020.09.15`	Financial Technology Development and Business Trends	Taiwan Insurance Institute	`3`
Manager	Chiu-Shan Chung	`2020.07.07-` `2020.07.28`	2020 Compliance Officers OJT	Taiwan Insurance Institute	`15`
		`2020.08.06-` `2020.08.27`	OJT of Anti-Money Laundering and CounteringFinancingTerrorism	Taiwan Insurance Institute	`12`
		`2020.08.26`	Risk Management and Development Trends in Nonlife Insurance - Business Continuity, Emergency Response and Crisis Management	Taiwan Insurance Institute	`3`
		`2020.08.31`	The Impact of IFRS17 on the Business Strategy of the Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
Manager	Jason Su	`2020.08.26`	Risk Management and Development Trends in Nonlife Insurance - Business Continuity, Emergency Response and Crisis Management	Taiwan Insurance Institute	`3`
		`2020.08.31`	The Impact of IFRS17 on the Business Strategy of the Nonlife Insurance Industry	Taiwan Insurance Institute	`3`
Manager	Ben Yu	`2020.09.15-` `2020.09.26`	General Supervisor Auditing Workshop - Use of Funds	Taiwan Insurance Institute	`30`
Accounting Manager	Pi-Chen Wang	`2020.09.07-` `2020.09.08`	Continuing Training Class for Principal Accounting Officers of Issuers, Securities Firms, and Securities Exchanges	Accounting Research and Development Foundation	`12`

Note 1: Dismissal on December 31, 2020

Note 2: new appointment since January 1, 2021

Note 3: new appointment since February 1, 2021

Note 4: new appointment since February 1, 2021

E. Refer to VIII. Other critical information conducive to understanding the operation of corporate governance on page 40 of the Annual Report.
98 -

3.3.10 Implementation of Internal Control System

A. Internal Control System Statement

Taiwan Fire & Marine Insurance Co., Ltd. Internal Control System Statement

The findings of a internal-inspections of the Internal Control System of the Company for the period from January 1, 2018 to December 31, 2018 are as follow:

I. The Company acknowledges that the Company's Board of Directors and managers are responsible for establishing, implementing, and maintaining an adequate internal control system. Its goals are to provide reasonable assurance on the target achievement on the results of operations, financial reporting, and legal compliance. The goal of operations is to pursue results and efficiency in operations including profitability, performance and asset security; the goal of financial reporting is to ensure reliability of external financial reporting; the goal of legal compliance is to ensure compliance with relevant laws and regulations. The legal compliance system is part of the internal control system dedicated to achieving legal compliance goals. Financial records and statements are prepared in accordance with the Insurance Act and related regulations based on consistent basis of preparation and they are results of the internal control system for financial reporting.
II. There are inherent limitations to even the most well designed internal control system. An effective internal control system can only reasonably ensure the achievement of the aforementioned 3 goals. The effectiveness of the internal control system may be subject to changes due to extenuating circumstances beyond our control. Nevertheless, the Company's internal control system contains self-monitoring mechanisms and the Company takes immediate remedial actions in response to any identified deficiencies.
III. The Company determines the effectiveness of the design and implementation of its internal control system in accordance with the "Regulations Governing Implementation of Internal Control and Auditing System of Insurance Enterprises" (hereinafter referred to as the "Regulations") promulgated by the Financial Supervisory Commission. The aforementioned judgment is also based on the items for evaluating the effectiveness of the internal control system in the "Regulations." The criteria adopted by the Regulations identify five key components of managerial internal control: 1. Control environment; 2. Risk assessment; 3. Control activities; 4. Information and communication; and (5) Monitoring. Each component includes a number of items for evaluation. Please refer to the "Regulations" for information on the items.
IV. The Company has evaluated the effectiveness of the design and implementation of its internal control system according to the previously mentioned criteria.
V. Based on the above-mentioned results, the Company believes that the design and implementation of the internal control system (including operations, financial reporting, and law compliance) during the period are effective. The System can reasonably ensure the Board of Directors and Managers understand the extent of the operating goals have been achieved, the goals for financial reporting and compliance with the laws have been achieved; it is also believed that the financial records and statements are prepared in accordance with the insurance laws and regulations. The basis for the reports was consistent and reasonably accurate.
VI. This statement shall become the primary content of the Annual Report and prospectus. Any falsehood, concealment, or other illegality in the content made public will involve legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Act as well as regulations related in the Insurance Act.
VII. This Statement has been approved by the meeting of Board of Directors on March 26, 2021.
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Respectively submitted to

Financial Supervisory Commission

Undersigned:

Chairman: Steve Lee President: Charles Sung Chief Auditor: Su-Chen Lin Chief Compliance Officer: Hsien-Chang Huang

March 26, 2021

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B. CPA Review Report

CPA Internal Control System Audit Report

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

Attached are Taiwan Fire & Marine Insurance Co., Ltd.'s call for its internal control system on March 26, 2021 (including the report to the competent authority in accordance with the financial reporting internal control system), the statement of declaration dated December 31, 2020 to declare that it was effectively designed and implemented, and a part of legal compliance system (according to the items specified in the Letter No. 0930014734 issued by the Ministry of Finance). All of above have been verified by the accountant. The establishment and maintenance of a suitable internal control system is the responsibility of a company's management level. The responsibility of the CPA is to express audit opinions regarding the insurance company's internal control system statement.

The accountant conducted inspections in accordance with the "Regulations Governing Implementation of Internal Control and Auditing System of Insurance Enterprises," "Regulations Governing Foreign Investments by Insurance Companies" and Letter No. 0930014734 issued by the Ministry of Finance on March 30, 2004. The procedures included the understanding the Company's internal control system, evaluating the management level, evaluating the effectiveness of the overall internal control system, testing and evaluating the effectiveness of the design and implementation of the internal control system, and other verification procedures deemed necessary by the accountant. We believe that our audits provide a reasonable basis for our opinions on this audit.

Any internal control system has inherent constraints. Hence, it is possible that the aforementioned internal control system of Taiwan Fire & Marine Insurance Company will not be able to prevent or detect errors or frauds that have already taken place. In addition, future environment may change, and compliance level to the internal control system may also decrease; hence, an effective internal control system during this period may not be as effective in the future.

In opinion of the accountant, in accordance with the evaluation items of the effectiveness of internal control system issued "Regulations Governing Implementation of Internal Control and Auditing System of Insurance Enterprises" and "Regulations Governing Establishment of Internal Control Systems by Public Companies" by the Financial Supervisory Commission, Taiwan Fire & Marine Insurance Company’s financial reporting (including the accuracy of reporting data to the competent authority in accordance with the internal control system of financial reporting), and the internal control system is related to ensuring the safety of assets (so that assets were not obtained, used and disposed without authorization). The said internal control system, designed and put into effect on December 31, 2020 is deemed to be able to maintain its effectiveness in all material respects; on March 26, 2021, Taiwan Fire & Marine Insurance Company stated its internal control system (including report to the competent authority in accordance with the internal control system of financial reporting and in compliance with laws) dated December 31, 2020 was effectively designed and implemented. All of above items have been represented fairly in all materiality aspects.

Deloitte, Taiwan Wang-Sheng Lin, CPA Wen-Yea Shyu, CPA

March 26, 2021

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3.3.11 From the most recent fiscal year up until the date of publication of the Annual Report, explain the circumstances in which the Company and its personnel have been punished by law, the Company has undertaken disincentive measures for its personnel for breaching the internal control system, and any material deficiencies and revisions:

Penalties	Deficiencies	Improvement Measures
A fine of NT$100,000 imposed.	Taipei City Department of Labor Letter No.11060568502 Employees who work overtime and violates the condition that they should take at least one day of regular leave out of every seven days of work in contravention of Article 32, Paragraph 2 and Article 36, Paragraph 2 of the Labor Standards Act.	The Company's business volume has exploded due to the exponential rise in demand of the Company’s anti-epidemic insurance policies. This is a singular incident, and additional manpower has been provided in response. The Company is now currently in compliance with relevant laws and regulations.

3.3.12 Key resolutions adopted by the Shareholders' Meeting and the Board of Directors in the most recent fiscal year up to the publication date of this annual report

A. Important resolutions of the 2020 general shareholders meeting and implementation status:

Date of Meeting	Key Resolutions	Implementation Status
`2020.06.12`	1.Passed and acknowledged 2019 Business Report and financial statements.	All the resolutions have been fully implemented in accordance with the resolutions.
	2.Passed and acknowledged 2019 earnings distribution proposal.	The distribution of bonus for shareholders totaling NT$362,201,000 in accordance with the resolution of the shareholders' meeting has been completed on July 10, 2020.
	3.Passed and acknowledged the amended "Company Charter".	Completed the amendment registration with the Ministry of Economic Affairs in accordance with regulations.
	4.Passed and acknowledged the " Rules of Procedure for Shareholders’ Meetings ".	All the resolutions have been fully implemented in accordance with the contents of the resolutions.
	`5.`Passed and acknowledged the Company's "Directors Election Guidelines".	All the resolutions have been fully implemented in accordance with the contents of the resolutions.

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Date of Meeting	Key Resolutions	Implementation Status
	6. Election of the Company’s Directors of the 26th term of Board of Directors (11 Directors including three Independent Directors). Approved newly-elected directors: Steve Lee Bank of Taiwan Co., Ltd. Representative: Wen-Chang Chen Bank of Taiwan Co., Ltd. Representative: Mei-Ling Wu Bank of Taiwan Co., Ltd. Representative: Tze-Yue, Chen Yong-Shin Development Co., Ltd. Representative: Chung-Chou Chang Yong-Shin Development Co., Ltd. Representative: Bin-Fu Chen Yong-Shin Development Co., Ltd. Representative: Charles Sung Yong-Shin Development Co., Ltd. Representative: Julie Lee Independent Director: Cheng Ching Huang Nien-Tsu Chiang JimmyT.Hsieh	All the resolutions have been fully implemented in accordance with the contents of the resolutions.
	7.Approval to discharge Directors from the competition business restrictions during the Directors’election for the Company's 26th term of Board of Directors.	All the resolutions have been fully implemented in accordance with the contents of the resolutions.

B. Major resolutions of Board Meetings during 2020 and as of the date of this Annual Report

Date of Meeting	Major resolutions	Resolution
`2020.03.20`	1. Resolved the time and place for the Company's 2020 Annual General Shareholders’ Meeting and the time and place for receiving shareholders' proposals. 2. Resolved the number of candidates for the 26th term Board of Directors of the Company. 3. Resolve the distribution of the Company's 2019 earnings 4. Resolved the remuneration of employees and Directors of the Company for the year 2019. 5. Resolved amendments of the Company	The Chairman consulted all the Directors present, and they voted in favor of the resolution without dissent.

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Date of Meeting	Major resolutions	Resolution
	Corporate Charter. 6. Resolved the amendment to the Company's Procedural Rules of General Meetings `7.`Resolved amendments to the Company's Procedure Rules for Election of Directors.
`2020.04.30`	1. Resolved to nominate and review the list of candidates for the 26th term of the Company's Directors. 2. Resolved to release the 26th Directors from Non-Compete Clause 3. Approved the Company's 2019 Business Report Proposal. 4. Approved the appointment of the Company's new President.	The Chairman consulted all the Directors present, and they voted in favor of the resolution without dissent.
`2020.06.12`	1. Election of the Chairman of the Company. 2. Election of the Vice Chairman of the Company. 3. Resolved to appoint the members of the 4th term Remuneration Committee of the Company. `4.`Resolved to appoint the 2nd term Ethical Corporate Management Committee of the Company.	The Chairman consulted all the Directors present, and they voted in favor of the resolution without dissent.
`2020.08.28`	Resolution of the Company's donation to "Taiwan Fire & Marine Foundation".	The Chairman consulted all the Directors present, and they voted in favor of the resolution without dissent.
`2020.12.25`	Resolved the date of appointment of the new President of the Company.	The Chairman consulted all the Directors present, and they voted in favor of the resolution without dissent.

3.3.13 Major content of any dissenting opinions on entry or stated in a written statement made by directors or Supervisors regarding key resolutions of board meetings during the past fiscal year up to the publication date of this report: None.

3.3.14.In the past fiscal year and as of the date of publication of the Annual Report, a summary of the resignations and dismissals of the Company personnel:

Title	Name	Employment Start Date	Employment End Date	Reason for Resignation or Dismissal
President	Charles Sung	`2010.04.01`	`2020.12.31`	term expired

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3.3.15 The Company's risk management organization, framework, and policies A.Risk management organization

The Company's related risk management units include the Board of Directors, Risk Management Committee, Risk Management Department, business units, and the Audit Department.

  - (1) Board of Directors: Establish suitable risk management mechanisms and risk management culture and approve appropriate risk management policies. Learn about the risks in insurance operations, establish the effective risk management, and bear ultimate responsibilities for overall risk management.

  - (2) Risk Management Committee: A functional committee established in October 2010 and placed under the jurisdiction of the Board of Directors. The role of the convener is filled by an Independent Director. The President is an ex-officio member and other members are designated by the convener. One meeting shall be convened each quarter but meetings may be convened whenever they are necessary at any time. The Committee is responsible for items including the formulation of the risk management policy, framework, and organizational functions to establish qualitative and quantitative management standards. It files an overall risk management report to the Board of Directors at least once every six months to ensure the effectiveness implementation of risk management.

  - (3) Risk Management Department: The Risk Management Department was established in September 2010 and it is responsible for the monitoring, measurement, and assessment of the Company's risks. It also helps formulate and execute the risk management policy approved by the Board of Directors. The Department regularly files related risk management reports and assists in conducting stress tests and back tests whenever necessary.

  - (4) Business units: Business units are responsible for the identifying and monitoring of risks, reporting the risk exposure status, and excess risk report. Regularly review various risks and limits to ensure the effective implementation by business units within the risk limit. Measure the impact level of risks when incidents occur and deliver prompt and accurate risk information. Unit supervisors shall be responsible for daily risk management and reporting and they shall adopt necessary response strategies to supervise regular delivery of related risk management information to the Risk Management Department.

  - (5) Audit Department: Review the implementation status of risk management in all units in accordance with related regulations.

B. Risk management framework
The Company's risk management framework includes risk governance, risk management organizational framework and duties, risk identification, risk measurement, risk monitoring and information, communication, and documentation. They are shown in the figure below:
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==> picture [445 x 235] intentionally omitted <==

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

Risk management
framework
Risk governance
Risk management organization
framework and duties
Risk assessment
Risk identification
Risk measurement
Risk response
documentation Risk monitoring
Information, communication and
----- End of picture text -----

C. Risk management policy
The Company's businesses mainly include nonlife insurance and the main risks include insurance risks, credit risks, market risks, liquidity risks, operational risks, and asset and liability risks. The Company has established risk management procedures for the six main types of risks to consolidate and manage risks. The risks and management methods are as follows:
(1) Risk management policy: The risk management policy is the Company's highest guiding principles for risk management. Through healthy risk management mechanisms, the Company and subsidiaries identify, measures, supervise, and control related risks in all operations to limit potential risks within reasonable levels, optimize the balance of risks and rewards, meet claim requests, improve core competitiveness, and improve the Company's long-term value.
(2) Insurance risk management policy: Insurance risk refers the risks borne by the Company after they are transferred from the insured to the Company upon payment of the insurance premiums. They are risks of losses due to non-expected changes when the Company pays for insurance claims and related expenses in accordance with the contract. Such risk of losses caused by unexpected changes include product design and pricing risks, insurance underwriting risks, reinsurance risks, catastrophe risks, compensation claim risks, and preparatory fund risks. They are processed through risk management procedures including prior risk identification, measurement, risk response, monitoring, and post-incident management in business operations to control potential risks within reasonable and sustainable levels.
(3) Credit risk management policy: Credit risks refer to risks involving creditors' downgrade of credit or failure to repay debts or inability or refusal of transaction counterparties to perform their obligations. They include items involved in insurance businesses and fund utilization. Management mechanisms include prior credit level limit management and continuous monitoring and follow-up management after incidents. Credit level limits include position authorization limits, concentration limits, and credit rating limits.
(4) Market risk management policy: Market risks refer to potential risks of losses of assets due to market price fluctuations of the value of assets over a certain period. The
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scope includes changes in interest rates, equity securities, exchange rates, value of real estate. Management mechanisms include position authorization limits, concentration limits, and credit rating limits as well as VaR value analysis, sensitivity analysis, and other non-mandatory limits and operating procedures for cases where the aforementioned limits are exceeded.

(5) Liquidity risk management policy: Liquidity risks refer to funding liquidity risks where the Company cannot cash in on assets or obtain sufficient funding and thus cannot perform due obligations or market liquidity risks where the Company faces significant changes in market when disposing or offsetting positions it holds due to insufficient market depth or market disorder. The management mechanisms are established independent of the fund usage units of transaction units. Indicators and limits have been established for both fund liquidity risks and market liquidity risks to monitor the impact of the Company's fund inflow and outflow on liquidity. In addition, the Company avoids risk concentration in regards to asset distribution and transaction counterparty risk exposure.
(6) Operating risks management policy: Operating risks refer to risks of direct or indirect losses caused by internal operation procedures, inappropriate actions or errors of personnel or systems, or external incidents. The units responsible for operations of the Company have established operating risk monitoring and control as well as key indicators to regularly inspect and report their own evaluation mechanisms. The goal is to detect existing or potential risks and take prompt measures to offset risks.
(7) Asset and liability risks: Asset and liability risks refer to risks caused by inconsistencies between the value of assets and liabilities. The related business units of the Company shall adopt suitable asset and liability management for market risks that may be caused by interest rate or exchange rate variation to formulate, execute, monitor, and correct related strategies for asset and liabilities and achieve established financial goals.
Company Operations
Since 2010, the Company has been actively promoting the implementation of risk management mechanisms, and the major measures executed over the years are as follows.
(1) The Risk Management Office was established in 2010, and the Risk Management Committee was established under the Board of Directors. In the same year, the Company announced its Risk Management Policy, and formulated various risk-oriented management standards in accordance with the Risk Management Policy.
(2) 2020:

In March, the Board of Directors presented the overall Risk Management Report for the second half of 2019.

In April, the Board of Directors presented a report on the Company’s Risk Response Assessment to COVID-19.

In August, the Board of Directors presented the overall Risk Management Report for the first half of the year 2020, as well as the Stress Test Report and the annual Own Risk and Solvency Assessment report for the same year.

Key risk indicators for operational risks were established in December, and monitoring began in 2021.

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3.4 Information on CPA service fees

Accounting Firm	Name of CPA	Name of CPA	Period Covered by CPA’s Audit	Remarks
Deloitte & Touche	Wang-Sheng Lin	Wen-Yea Shyu	January 1, 2020 to December 31, 2020	-

Unit: Thousand NTD

				Unit: Thousand NTD
Category of Fees Interval of the amount		Audit Fees	Non-audit Fee	Total
1	Less than 2,000 thousand NTD	-	1,560	1,560
2	2,000 thousand NTD (inclusive) - 4,000 thousand NTD	2,460	-	2,460
3	4,000 thousand NTD (inclusive) - 6,000 thousand NTD	-	-	-
4	6,000 thousand NTD (inclusive) - 8,000 thousand NTD	-	-	-
5	8,000 thousand NTD (inclusive) - 10,000 thousand NTD	-	-	-
6	10,000 thousand NTD (inclusive) or above	-	-	-

Note : ﹝ - ﹞ in the table means ﹝ 0 ﹞

Information on CPA service fees

Unit: Thousand NTD

Accounting Firm	Name of CPA	Audit Fees		Non-Audit Fees	Non-Audit Fees	Non-Audit Fees		Period Covered by CPA’s Audit	Remarks
			System of Design	Business Registration	Human Resource	Others (Note 2)	Subtotal
Deloitte & Touche	Wang-Sheng Lin	2,460	-	-	-	1,560	1,560	2020.01.01 2020.12.31	Other items consist of the public expenses of certification service for review of the internal control system, auditing the capital adequacy and inspecting statement, auditing the compulsory automobile/Motorcy cle Liability Insurance, reading the annual reports and the four major statements in English.
	Wen-Yea Shyu

Note 1: Where this Company replaces the CPA or accounting firm, the auditing periods of the former and successor CPA or firm shall be annotated separately with the reason for replacement noted. The accounting and non-accounting fees paid to the former and successor CPA or firm shall also be disclosed.

Note 2: Non-audit fees shall be annotated separately in corresponding service items. If the "Others" column in non-audit fees reaches 25% of the total non-audit fees, the service details should be listed in the "Remarks" column.

Note 3: ﹝ - ﹞ in the table means ﹝ 0 ﹞

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3.5 Information on Replacement of CPA ： None.

3.6 The Company’s Chairman, General Manager, or any managerial officer in charge of finance or accounting matters has held a position at its CPA's accounting firm or at an affiliated enterprise in the most recent year ： None.
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3.7 Equity transfer or changes to equity pledge of directors or managerial officers holding more than ten percent (10%) of company shares during the year prior to the publication date of this report:

3.7.1 Transfer of shares and changes in equity pledge of directors, managers, and primary shareholders:

shareholders:	shareholders:	, ,	, ,	, ,	, ,
		Unit: Shares 2019 As of April30 ofthe year Holding Increase (Decrease) Pledged Holding Increase (Decrease) Holding Increase (Decrease) Pledged Holding Increase (Decrease) `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `(45,000)` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `(1,000)` `-` `-` `-` `-` `-` `-` `-` `-` `-` `8,000` `-` `(8,000)` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-`
Title (Note 1)	Name	2019		As of April30 ofthe year
		Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
Director`/`Chairman	Steve Lee	`-`	`-`	`-`	`-`
Director of Corporate shareholder	Yong-Shin Development Co., Ltd.	`-`	`-`	`-`	`-`
Director	Charles Sung (Note 2)	`-`	`-`	`(45,000)`	`-`
Director	Chung-Chou Chang	`-`	`-`	`-`	`-`
Director	Bin-Fu Chen	`-`	`-`	`-`	`-`
Director	Julie Lee(Note 3)	`-`	`-`	`-`	`-`
Director	Chain-ChengLee(Note 4)	`-`	`-`	`-`	`-`
Director of Corporate shareholder	Bank of Taiwan Co., Ltd.	`-`	`-`	`-`	`-`
Director	Mei-Ling,Wu	`-`	`-`	`-`	`-`
Director	Wen-ChangChen	`-`	`-`	`-`	`-`
Director	Su-Ju Hsu	`-`	`-`	`-`	`-`
Director	Chin-Hsien,Chiu `(`Note`5)`	`-`	`-`	`-`	`-`
Director	Tze-Yue,Chen(Note 6)	`-`	`-`	`-`	`-`
Independent Director	Tien-SungLee	`-`	`-`	`-`	`-`
Independent Director	Yeong-TsongShaw	`-`	`-`	`-`	`-`
Independent Director	ChengChingHuang (Note 7)	`-`	`-`	`-`	`-`
Independent Director	Nien-Tsu Chiang (Note 7)	`-`	`-`	`-`	`-`
Independent Director	JimmyT. Hsieh	`-`	`-`	`-`	`-`
President	Chao-FengChen(Note 2)	`-`	`-`	`-`	`-`
Senior Vice President	Nicholas N.C. Sheu	`-`	`-`	`-`	`-`
General Auditor	Su-Chen Lin	`-`	`-`	`-`	`-`
Chief Compliance Officer	Hsien-Chang Huang	`-`	`-`	`-`	`-`
Senior Vice President	Chia-Lin Sheu	`-`	`-`	`-`	`-`
Senior Vice President	Tsui-JungChen	`-`	`-`	`-`	`-`
Senior Vice President	Andrew Hsieh	`-`	`-`	`-`	`-`
Senior Vice President	Allen Cheng	`-`	`-`	`-`	`-`
Vice President	Chih-Chieh Huang	`-`	`-`	`-`	`-`
Vice President	Hsin-Chu Lin	`-`	`-`	`(1,000)`	`-`
Vice President	Jack Chung	`-`	`-`	`-`	`-`
Vice President	Yuan-Yi Liao	`-`	`-`	`-`	`-`
Vice President	Hong-HsingChuang	`8,000`	`-`	`(8,000)`	`-`
Senior Manager	Jih-Min Chan	`-`	`-`	`-`	`-`
Senior Manager	StanleyFang	`-`	`-`	`-`	`-`
Senior Manager	Yung-Fu Su	`-`	`-`	`-`	`-`
Senior Manager	JeffreyC. Chen	`-`	`-`	`-`	`-`
Senior Manager	Kent Lee	`-`	`-`	`-`	`-`
Senior Manager	Chih-HungWang	`-`	`-`	`-`	`-`
Senior Manager	Yu-Jen Hsiao	`-`	`-`	`-`	`-`

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Title (Note 1)	Name	2019	2019	As of April30 ofthe year	As of April30 ofthe year
		Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
Senior Manager	StanleyChao	`-`	`-`	`-`	`-`
Senior Manager	Chyi- ShyangChio	`-`	`-`	`-`	`-`
Senior Manager	Jonathan Tu	`-`	`-`	`-`	`-`
Vice President	Steven Lin	`(35,000)`	`-`	`-`	`-`
Senior Manager	Ming-FangRao	`-`	`-`	`-`	`-`
Senior Manager	Chin-Ho Lin	`-`	`-`	`-`	`-`
Manager	Chun-Chao Chiu(Note 8)	`-`	`-`	`-`	`-`
Manager	Chiu-Shan Chung	`-`	`-`	`-`	`-`
Manager	Eric Hsu	`-`	`-`	`-`	`-`
Manager	Wun-Bin,Hou	`-`	`-`	`2,000`	`-`
Manager	JudyLiao	`-`	`-`	`1,000`	`-`
Manager	April Wang	`-`	`-`	`-`	`-`
Manager	Nan-Chou Liu	`-`	`-`	`-`	`-`
Manager	Jason Su	`-`	`-`	`-`	`-`
Manager	Ben Yu(Note 9)	`-`	`-`	`-`	`-`
Manager	Shang-Jen Tung (Note 10)	`-`	`-`	`-`	`-`
AccountingManager	Pi-Chen Wang	`-`	`-`	`-`	`-`

Note 1 ： Shareholders who hold more than ten (10) percent of the Company's shares shall be noted as major shareholders and listed separately.
Note 2 ： Appointment on January 1, 2021
Note 3 ： Dismissal on November 11, 2020
Note 4 ： Appointment on November 11, 2020
Note 5 ： Dismissal on January 16, 2020
Note 6 ： Appointment on January 21, 2020
Note 7 ： Appointment on June 12, 2020
Note 8 ： Dismissal on June 5, 2020
Note 9 ： Appointment on September 1, 2020
Note 10 ： Appointment on February 1, 2020

Note 11 ：﹝ - ﹞ in the table means ﹝ 0 ﹞

3.7.2 Information of change in equity

Any transfer of equity interests by a director, supervisor, managers, or shareholder with a stake of more than 10 percent where the counterparty in any such transfer of equity interests is a related party ： None.
3.7.3 Information of change in equity
Any pledge of equity interests by a director, supervisor, managers, or shareholder with a stake of more than 10 percent where the counterparty in any such pledge of equity interests is a related party ： None.
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3.8 Information regarding the top 10 shareholders in terms of number of shares held, who are related parties or each other's spouses and relatives within the second degree of kinship

							Unit:Shares; %	Unit:Shares; %	Unit:Shares; %
Name (Note 1)	Current Shareholding		Spouse’s/minor’s Shareholding		Shareholding by Nominee Arrangement		Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees		Remarks
	Number of Shares	Shareholding Percentage	Number of Shares	Shareholdin g Percentage	Number of Shares	Shareholding Percentage	Name	Relationship
Bank of Taiwan Co., Ltd. Representative: Jye-CherngLyu	64,608,278	17.84%	-	-	-	-	None	None	None
Navigator Investment Co., Ltd. Representative: Mu-Heng Wu	25,168,675	6.95%	-	-	-	-	Steve Lee Jia-Der Investment Co., Ltd. Navigator Real Estate Co., Ltd.	A Director and spouse of the Chairman of Navigator Investment The Chairman is the same person Navigator Investment is a corporate director of Navigator Construction	None
Yong-Shin Development Co., Ltd. Representative: Chain-Cheng Lee	24,158,535	6.67%	-	-	-	-	Tong-Sheng Development Co., Ltd. Navigator Real Estate Co., Ltd.	The Chairman is the same person The Chairman is the same person	None
Qiao-Nong Investment Co., Ltd. Representative: Julie Lee	11,026,843	3.04%	-	-	-	-	Yong-Shin Developme nt Co., Ltd. Steve Lee	Corporate director A family member within the second degree of kinship of the Chairman of Chiao Nung Investment	None
Taichung Commercial Bank Co., Ltd. Representative: Kuei-FongWang	10,662,000	2.94%	-	-	-	-	None	None	None
Navigator Real Estate Co., Ltd. Representative: Chain-Cheng Lee	10,601,122	2.93%	-	-	-	-	Steve Lee Navigator Investment Co., Ltd. Yong-Shin Developme nt Co., Ltd. Tong-Sheng Development Co., Ltd.	A Director and a family member within the second degree of kinship of the Chairman of Navigator Investment Corporate director The Chairman is the same person The Chairman is the same person	None

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Name (Note 1)	Current Shareholding	Current Shareholding	Spouse’s/minor’s Shareholding	Spouse’s/minor’s Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees	Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees	Remarks
	Number of Shares	Shareholding Percentage	Number of Shares	Shareholdin g Percentage	Number of Shares	Shareholding Percentage	Name	Relationship
Land Bank of Taiwan Co., Ltd. Representative: Chuan-Chuan Hsieh	10,237,317	2.83%	-	-	-	-	None	None	None
Jia-Der Investment Co., Ltd. Representative: Mu-Heng Wu	7,966,520	2.20%	-	-	-	-	Navigator Investment Co., Ltd. Navigator Real Estate Co., Ltd. Steve Lee	The Chairman is the same person Corporate director Spouse of the Chairman of Chia Te Investment	None
Steve Lee	7,509,939	2.07%	1,030,229	0.28%	-	-	Navigator Investment Co., Ltd. Navigator Real Estate Co., Ltd. Tong-Sheng Development Co., Ltd.	A Director and spouse of the Chairman of Navigator Investment A Director and a family member within the second degree of kinship of the Chairman of Navigator Investment A Director and a family member within the second degree of kinship of the Chairman of Tong Sheng Investment	None
Tong-Sheng Development Co., Ltd. Representative: Chain-Cheng Lee	6,912,556	1.91%	-	-	-	-	Navigator Real Estate Co., Ltd. Yong-Shin Developme nt Co., Ltd. Steve Lee	The Chairman is the same person The Chairman is the same person A Director and a family member within the second degree of kinship of the Chairman of Tong Sheng Investment	None

Note 1 ： List out the top 10 shareholders. List both the titles of the shareholders and the names of the representatives for institutional shareholders. Note 2 ： The calculation of proportion of shareholding shall be the holding by the person, spouse, and dependents or in the name of a third party separately. Note 3 ： The aforementioned shareholders for disclosure shall include institutional shareholders and natural persons, with the relations between the shareholders as required by the Criteria for the Compilation of Financial Statements by Securities Issuers. Note 4: "-" in the table means "0".

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3.9 Number of shares held by the company, its directors, supervisors, managerial

officers and directly or indirectly controlled undertakings in the same invested companies, and the consolidated shareholding ratio

Comprehensive Shareholding Percentage

	Comprehensive Shareholding Percentage	Comprehensive Shareholding Percentage	Comprehensive Shareholding Percentage	Comprehensive Shareholding Percentage	Comprehensive Shareholding Percentage	Comprehensive Shareholding Percentage
	Unit:Shares; %
Investment	Investments of the Company		Investments of Directors, Supervisors, Managers and directly or indirectly controlled businesses		Total Investments
	Number of shares	Shareholding Percentage	Number of shares	Shareholding Percentage	Number of shares	Shareholding Percentage
`TOP TAIWAN II VENTURE CAPITAL CO., LTD.` `TOP TAIWAN III VENTURE CAPITAL CO., LTD. TOP` `TAIWAN IV VENTURE CAPITAL CO., LTD. TOP TAIWAN` `VI VENTURE CAPITAL CO., LTD.` `TOP TAIWAN VIII VENTURE CAPITAL CO., LTD. TOP` `TAIWAN IX VENTURE CAPITAL CO., LTD.` `TOP TAIWAN X VENTURE CAPITAL CO., LTD.` `TOP TAIWAN XI VENTURE CAPITAL CO., LTD.` `Zlink Venture Capital Corp` `BMB Venture Capital Investment Corporation` `TOP TAIWAN XII VENTURE CAPITAL CO., LTD.`	`695,652` `177,000` `210,000` `441,913` `2,166,666` `6,000,000` `19,800,000` `6,000,000` `1,669,000` `3,000,000` `20,000,000`	`8.70` `3.00` `3.00` `1.74` `3.33` `7.50` `24.75` `7.50` `3.09` `8.22` `14.81`	- - - - - - - - - -	- - - - - - - - - -	`695,652` `177,000` `210,000` `441,913` `2,166,666` `6,000,000` `19,800,000` `6,000,000` `1,669,000` `3,000,000` `20,000,000`	`8.70` `3.00` `3.00` `1.74` `3.33` `7.50` `24.75` `7.50` `3.09` `8.22` `14.81`

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、 IV Capital Overview

4.1 、 Shares and Dividends

4.1.1 Capital Sources

A. Issued Shares

Month/ Year	Par Value (NT$)	Authorized Capital	Authorized Capital	Paid-in Capital	Paid-in Capital	Remark	Remark	Remark
		Shares	Amount (NT$)	Shares	Amount (NT$)	Sources of Capital	Capital Increased by Assets Other than Cash	Other
7/2003	10	353,600,000	3,536,000,000	280,662,800	2,806,628,000	Capital Increase by Earning	0	Note1
8/2004	10	353,600,000	3,536,000,000	304,091,500	3,040,915,000	Capital Increase by Earning	0	Note2
8/2005	10	353,600,000	3,536,000,000	316,857,000	3,168,570,000	Capital Increase by Earning	0	Note3
9/2010	10	600,000,000	6,000,000,000	363,816,400	3,638,164,000	Capital Increase by Earning	0	Note4
12/2015	10	600,000,000	6,000,000,000	362,200,400	3,622,004,000	Treasury Stocks Nullifying 1,616,000	0	Note5

Note 1: Decree No. 0920131648 issued by MOF Note 2: Decree No. 0930135221 issued by FSC Note 3: Decree No. 0940131068 issued by FSC Note 4: Decree No. 0990041289 issued by FSC Note 5: Decree No. 10401263610 issued by MOEA

B. Type of Stock

B. Type of	Stock	Stock	Stock
Share Type	Authorized Capital Issued Shares Un-issued Shares Total Shares			Remarks
	Issued Shares	Un-issued Shares
Common Shares	362,200,400	237,799,600	600,000,000	None

C. Information for Shelf Registration

Securities Type	Preparing to Issue Amount Total Shares Authorized Amount (NT$thousands)	Preparing to Issue Amount Total Shares Authorized Amount (NT$thousands)	Issued Amount	Issued Amount	Purpose and Effect for Issued Shares	Issue Period for Unissued Shares	Remarks
		Authorized Amount (NT$thousands)	Shares	Price (NT$)
None	-	-	-	-	-	-	None

4.1.2 Status of Shareholders

4.1.2 Status of Shareholders	4.1.2 Status of Shareholders	4.1.2 Status of Shareholders	4.1.2 Status of Shareholders	4.1.2 Status of Shareholders	4.1.2 Status of Shareholders	4.1.2 Status of Shareholders
As of4/20/2021
Item	Government Agencies	Financial Institutions	Other Juridical Persons	Domestic Natural Persons	Foreign Institutions & Natural Persons	Total
Number of Shareholders	-	6	238	29,453	96	29,793
Shareholding (shares)	-	89,506,595	99,397,120	162,096,535	11,200,150	362,200,400
Percentage	0.00%	24.71%	27.44%	44.75%	3.10%	100.00%

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4.1.3 Shareholding Distribution Status

A. Common Shares

As of 4/20/2021

4.1.3 Shareholding Distribution Status A. Common Shares			As of4/20/2021
Class of Shareholding (Unit: Share)	Number of Shareholders	Shareholding (Shares)	Percentage
1 ~ 999	19,676	798,673	0.22
1,000 ~ 5,000	6,517	14,757,352	4.08
5,001 ~ 10,000	1,420	11,248,634	3.11
10,001 ~ 15,000	648	8,115,452	2.24
15,001 ~ 20,000	353	6,517,976	1.80
20,001 ~ 30,000	365	9,248,463	2.55
30,001 ~ 50,000	290	11,502,639	3.17
50,001 ~ 100,000	282	20,329,611	5.61
100,001 ~ 200,000	123	17,141,275	4.73
200,001 ~ 400,000	62	17,146,381	4.73
400,001 ~ 600,000	19	9,280,346	2.56
600,001 ~ 800,000	4	2,673,397	0.74
800,001 ~ 1,000,000	6	5,523,583	1.53
1,000,001 or over	28	227,916,618	62.93
Total	29,793	362,200,400	100.00

B. Preferred Shares ： N/A

4.1.4 List of Major Shareholders

4.1.4 List of Major Shareholders
	As of4/20/20221
Shareholder's Name	Shareholding
	Shares	Percentage(%)
Bank of Taiwan	64,608,278	17.84
Navigator Investment Co., Ltd.	25,168,675	6.95
Yong-Shin Development Co., Ltd.	24,158,535	6.67
Qiao-Nong Investment Co., Ltd.	11,026,843	3.04
Taichung Commercial Bank Co., Ltd.	10,662,000	2.94
Navigator Real Estate Co., Ltd.	10,601,122	2.93
Land Bank of Taiwan	10,237,317	2.83
Jia-Der Investment Co., Ltd.	7,966,520	2.20
Steve Lee	7,509,939	2.07
Tong-Sheng Development Co., Ltd.	6,912,556	1.91

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4.1.5 Market Price, Net Worth, Earnings, and Dividends per Share

Unit: NT$

					Unit: NT$
Items	Year		2020	2019	As of March31,2021
Market Price per Share	Highest Market Price		21.00	21.05	22.45
	Lowest Market Price		16.20	19.45	19.80
	Average Market Price		19.86	20.29	20.90
Net Worth per Share	Before Distribution		26.45	25.09	26.13
	After Distribution		25.35	24.09	-
Earnings per Share	AdjustedWeighted Average Shares		362,200,400	362,200,400	362,200,400
	Diluted Earnings Per Share		1.90	1.94	(0.06)
Dividends per Share (Note 4)	Cash Dividends		1.10	1.00	-
	Stock Divide nds	Dividends from Retained Earnings	-	-	-
		Dividends from Capital Surplus	-	-	-
	Accumulated Undistributed Dividends		-	-	-
Return on Investment	Price / Earnings Ratio (Note 1)		10.45	10.46	-
	Price / Dividend Ratio (Note 2)		18.05	20.29	-
	Cash Dividend Yield Rate (Note 3)		5.54	4.93	-

Note 1: Price / Earnings Ratio = Average Market Price / Earnings per Share Note 2: Price / Dividend Ratio = Average Market Price / Cash Dividends per Share Note 3: Cash Dividend Yield Rate = Cash Dividends per Share / Average Market Price

Note 4: Dividends per share in 2019 were based on the resolution proposed by the shareholders' meeting of the following year; dividends per share in 2020 were based on the distribution resolved by the Board of Directors on March 26, 2021.

4.1.6 Dividend policy and implementation status

A. Dividend policy established in the Articles of Incorporation

When allocating the net profits for each fiscal year, the Company shall first offset its losses in previous years and pay for all taxes before setting aside 20% of the profits remaining balance as Legal capital reserve, until the accumulated legal capital reserve equals the Company's paid-in capital. Special capital reserve shall then be appropriated or reversed from the balance pursuant to relevant laws and regulations. The Board of Directors shall, pursuant to the dividend policy specified in Article 37, draft the proposal for appropriation of earnings based on the remaining balance, if any, combined with accumulated unappropriated earnings at the beginning of the period and unappropriated earnings of the current year and submit it to the shareholders' meeting for resolution.

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The Company operates in the nonlife insurance industry which has remained competitive after the opening of the insurance market. To strengthen the Company's undertaking and repayment capacity, future funding requirements, and satisfy shareholders' demand for cash inflow, the Board of Directors has adopted a stable and balanced dividend policy for the earnings distribution for the current year and it adjusted the proportion of stock and cash dividends. Cash dividends shall be no lower than 10% of the total dividends. However, if the cash dividends are lower than NT$0.1 per share, they may be distributed as stock dividends.

B. Specific dividend policy: Distribution of dividends in previous years

Year	Cash dividends	Distribution date
2015	1.2	2016.7.26
2016	0.9	2017.7.31
2017	1.1	2018.7.30
2018	0.9	2019.7.30
2019	1.0	2020.7.10
2019	1.1	To be determined

Although the dividend distribution ratio is not specified in the Company's Articles of Incorporation, the percentage of earnings provided for distribution may be determined for strengthening the Company's undertaking and repayment capacity, future funding requirements, and satisfying shareholders' demand for cash inflow. It shall be processed after it is resolved in the shareholders' meeting.

We estimate that the total dividends for each of the next three years to be no lower than 20% of total distributable earnings and cash dividends shall account for no less than 10% of all dividends for shareholders.

C. Dividend distribution to be proposed to the shareholders' meeting
Each share is assigned NT$1.1 in cash dividends and the proposed shareholder
dividends total NT$398,421,000.
D. Any expected material changes to the dividend policy shall be further explained: None.

4.1.7 The impacts of issuing stock grants in this Shareholder’s Meeting on the Company’s operational performance and dividend per share:

The dividend distribution to be proposed to the shareholders’ meeting does not include stock dividends and this item is therefore inapplicable.

4.1.8 Compensation for employees, Directors, and Supervisors

A.Percentage or range of rewards distributed to employees and Directors as stipulated in the Company's Articles of Incorporation:

In the event the Company makes a profit during the fiscal year, it shall set aside 1% to 5% of its annual profit to employees as profit sharing bonus and no higher than 5% of its annual profit to Directors as compensation (Not includeding Independent Directors). If there are cumulative losses, the Company shall appropriate funds to make up for such losses.

B.Accounting treatment for the basis of estimating the amount of the employees’ remuneration and Director’s remuneration for this fiscal period, the basis of calculating the number of shares to be distributed as employees’ remuneration, and for any discrepancy between the actual amount distributed and the estimated figures.

The Company's remuneration for employees and Directors shall be 1% to 5% and

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under 5% of the earnings before tax of the year and before deducting remuneration for employees and Directors. The proposed employee remuneration of NT$20,340,000 and Director remuneration of NT$20,340,000 for 2020 were appropriated based on the aforementioned 2.5% of the pre-tax profit. The Board of Director approved to distribute employee remuneration of NT$20,340,000 and Director remuneration of NT$20,340,000 in the meeting on March 26, 2021.

If there are changes made to the amount after the issuance of annual financial report, the changes shall be accounted for as changes in accounting estimates and recognized in the financial statements of the following year.

C.Status of compensation distribution as approved by the Board of Directors
(1)The Board of Director resolved to distribute employee bonus of NT$20,340,000 and Director remuneration of NT$20,340,000 in cash in the Board meeting on March 26, 2021.
(2) If there is any discrepancy between the Board of Directors' proposal for the distribution of remuneration for employees and Directors and the estimated amount of recognized expenses for the current fiscal year, the amount, causes and treatment of such discrepancy shall be disclosed: No such occurrences.
D.Actual distribution of remunerations for employees, Directors, and Supervisors (including the number, sum, and price of shares distributed), and where there were discrepancies with the recognized remuneration for employees, Directors, and Supervisors, the difference, cause, and treatment of the discrepancy be described.

			Unit: NT$1,000
Distribution Item	Actual Distribution	Amount Passed in the Original Board Meeting (2020)	Difference
Remuneration of employees	0	21,939	Undistributed
Remuneration to Directors and Supervisors	21,939	21,939	None

4.1.9 Status of company share buyback

The Company did not buy back shares in 2020 and up to April 30, 2021.

4.2 Issuance of Corporate Bonds: None

4.3 Issuance of Preferred Shares: None

4.4 Issuance of Globl Depositary Shares: None

4.5 Issuance of Employee Stock Option Plan: None

4.6 Issuance of Employee Restricted Stock: None

4.7 Issuance of New Share Issuance in Connection with Mergers and Acquisitions: None

4.8 Financing Plans and Implementation: None

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V. Operational Highlights

5.1 Business activities

5.1.1 Business scope

A. Main business: Direct insurance policies and reinsurance business.
(1) Direct written policies
- 1 Fire insurance
- ○2 Marine Cargo Insurance ○ 3 Marine Hull Insurance ○ 4 Fishing Vessel Insurance ○ 5 Aviation Insurance ○ 6 Automobile Insurance ○ 7 Money Insurance ○ 8 Bond and Credit Insurance ○ 9 Liability Insurance
- 10 Engineering Insurance
- 11 Personal Accident Insurance
- 12 Health Insurance
- ○ 13 Other Property Insurance
(2) Reinsurance: Inward business of various lines of domestic and foreign insurance
B. Breakdown of Total Premium in 2020, based on business lines.
(1) Premium of direct policies written was NT$6,512,206,000, 93.80% of total premium.
(2) Reinsurance premiums was NT$430,313,000, 6.20% of the total premium.
C. Breakdown of Total Premium in 2020, based on business line.

(1) Automobile Insurance	42.26%
(2) Residential Fire Insurance	14.37%
(3)Compulsory Automobile Liability Insurance	11.96%
(4) Commercial Fire Insurance	11.01%`
(5) Personal Accident Insurance	6.54%
(6) Liability Insurance	3.67%
(7) Engineering Insurance	3.32%
(8) Other Nonlife Insurance	2.23%
(9) Marine Cargo Insurance	2.14%
(10) Others*	2.50%

Note: Products that account for less than 2% of the total written premiums are collectively indicated under Others.
D. Products and Services Currently Planned

In 2021, the Company continued to develop FinTech, optimizing digital portals, e-operations, online insurance procurement and mobile office mechanisms to improve operational efficiency; adheres to the fair hospitality and customer orientated principles comprehensively improving customer service quality and implementing customers insurance protection. Regarding insurance products, in response to market changes, laws and regulations, and consumer needs, the Company continues to design product portfolio packages with innovative product design, and launch differentiated products to improve product variety. The

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Company has also adopted a market segmentation strategy and makes full use of the advantages of multiple strategic alliances and professional associations to expand the market reach whereby to improve the company's overall operating performance.

5.1.2 State of the Industry

A. Current State and Development of the Industry

In 2020, premium income of nonlife insurance industry as a whole exhibited growth of 6.24%, reached NT$187,390,287 thousand. casualty, personal accident and health lines have deteriorated; whereas all other business lines showed growth momentum, especially for fire, miscellaneous, hull, fishing vessel and aviation insurance lines all have achieved double-digit growth.

Looking ahead, for the domestic nonlife insurance market in 2021, the authorities' emphasis on FinTech applications, deregulation and technological innovation, as well as changes in consumers’ buying patterns will stimulate the dynamic in the development of innovative Internet services and insurance technology, which is expected to increase the volume of the e-commerce insurance businesses. The government will continue to develop offshore wind power plants and infrastructure, which can increase both the engineering and liability insurance lines. The COVID-19 pandemic has impacted overseas travel and affected the travel comprehensive insurance business. Due to the government's appropriate control of the epidemic, the increase in the domestic self-driving tourism has brought about the increase in the loss frequency of auto insurance. The expansion of insurance coverage for residential fires may also increase loss trend; and at the same time, prevailing consumer protection trends will increase the amount of claims and erode potential earning level. The introduction of the second phase of IFRS 17 will increase the company expenses. The decrease in interest income brought about by the low interest rate environment will continue to impact the operation of the nonlife insurance market.

B. Development Trends and Competition for Various Products
(1) Fire Insurance

The total fire insurance written premiums (including natural perils coverage) in 2020 was NT$28,292,391 thousand, a YOY growth rate of 12.8%. The total premiums for commercial fire line was NT$21,798,844 thousand, YOY growth rate of 14.99%. The main reason behind the double digit growth was due to increasing sum insured. For the residential fire, it continues to maintain steady growth, where the total residential fire insurance grew by 9.03%, premiums NT$6,493,547 thousand. The 2020 take-up rate of residential earthquake insurance was 36.04%, a slight increase from 35.01% of 2019.

For the commercial fire insurance market in 2021, although the COVID-19 pandemic has slowed down and the expected economic growth rate is higher than the previous year, it will still be affected by the market competition. The market premium for commercial fire insurance contracts is expected to show a decline. Residential fire insurance, the expanded coverage of residential fire insurance, and the increased the construction cost reference table for residential buildings, it is expected to increase the public's willingness to take out

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residential fire insurance. It is estimated that the income in premiums from residential fire insurance policies will continue to show steady growth in 2021.

(2) Automobile Insurance

In 2020, the overall automobile insurance market continued to register a 7.31% growth, the total automobile insurance premium reached NT$100,824,848 thousand. The noncompulsory automobile insurance premium was NT$82,507,185 thousand, a growth rate of 8.78%; the total compulsory automobile liability insurance premium was NT$18,317,663 thousand, growth rate of 1.13%. The sale of new cars has reached all time high, reaching 457,435 units, growth rate of 4%. The rate increase for third-party liability line have also contributed to the growth of the premium level.

Looking ahead, as the Ministry of Finance's tax exemption policy is confirmed to be extended for another five years, which will benefit the sales of new cars and electric motorcycles, the auto insurance market will be benefited. Together with the response to the frequent occurrence of car accidents involving high-value vehicles and rising claim amounts, insurance companies will strongly promote the need for car owners to take out third party liability insurance and excess liability insurance, so the overall auto insurance contract premium income is expected to maintain growth in 2021.

(3) Marine Cargo Insurance

In 2020, the overall market written premiums of marine cargo insurance line was NT$4,846,393 thousand, YOY growth rate of 0.06%.

For 2021, even the cargo insurance rate may increase, as global reinsurance market for the subject line has hardened, the premium growth will be somewhat offset by the demand-supply chains blockage due to coronavirus.

(4) Marine Hull Insurance

In 2020, the overall market written premiums of marine hull insurance line was NT$1,804,404 thousand, YOY growth rate of 34.41%. For the fishing vessel insurance line, market written premiums was NT$1,133,333 thousand, YOY growth rate of 12.59%.

The hull insurance market in 2021 will continue to increase due to the strict underwriting and hardened reinsurance market. The overall written premiums from hull insurance business will have an overall 10% to 15% growth.

(5) Aviation insurance

In 2020, the overall market written premiums of aviation insurance line was NT$808,194 thousand, YOY growth rate of 14.16%. For 2021, the total written premiums is expected to drop due to the global coronavirus effect, even though the premium rate for the line is on the rise.

(6) Liability and Engineering Insurance

In 2020, the overall market written premiums of casualty insurance line was NT$20,949,353 thousand, YOY growth rate of 3.68%. Within this category, the total credit guarantee insurance written premiums was NT$1,657,068 thousand, a YOY growth rate of 1.84%; the total liability insurance written premiums was NT$11,699,462 thousand, a negative YOY growth rate of 1.17%;

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and, the total other property insurance premiums was NT$7,592,822 thousand, a YOY growth rate of 12.62%.

Looking forward to 2021, new product launches will bring growth momentum in the casualty line of business as many of communicable disease or vaccine related compensation insurance products will be developed, to name a few.

(7) Engineering insurance

In 2020, the overall engineering insurance market recorded a total of NT$7,140,322 thousands in insurance premiums, a growth of approximately 6.20%. This is mainly attributed to the government's active promotion of offshore wind power-related projects and solar power-related equipment, which has led to an increase in the insurance demand.

In terms of outlook for 2021, the government continue to actively promote solar power generation, offshore wind power generation, and the government's expansion of public construction investment due to the COVID-19 pandemic. Therefore, it is expected that the Company's performance in the engineering insurance market will continue to grow this year.

(8) Accident and Health Insurance

In 2020, the market accident insurance written premiums reached NT$18,821,100 thousand, a negative YOY growth rate of 3.75%; and the market health insurance written premiums was NT$2,769,950 thousand, a negative YOY growth rate of 6.52%.

With regards to the accident and health insurance market in 2021, due to the continuing impact of the COVID-19 pandemic on tourism activities, it is expected that the growth rate of online insurance will be lowered. For insurance products, due to the impact from the COVID-19 pandemic. The industry will focus on the product packaging of health insurance with COVID coverage. We expect the A&H insurance market in 2021 to show a slight decline.

C. Overview of technology and R&D
A total of 63 New Insurance Products Submitted in 2020 ：
TFMI CEAR – Construction and Erection All Risk
TFMI 044B Irrigation Agency Endorsement (C)
TFMI 045H Water Resources Agency Endorsement (I)
TFMI E55 Insurance Premium Instalment arrangement (Mingjian Hydroelectric Power Plant only)
TFMI LAUNCH & IN-ORBIT INSURANCE(A)
TFMI M01 Engineering Insurance Consolatory Fee Endorsement
TFMI M02 Agricultural Machinery Insurance Consolatory Fee Endorsement
TFMI Construction Worker Group Personal Accident Insurance
TFMI Hydroelectric Power Plant Machinery Breakdown Insurance (Mingjian Hydroelectric Power Plant only)
TFMI Corporate Communicable Diseases Compensation Insurance (for SME)
TFMI Residential Housing Gas Comprehensive Insurance
TFMI Depreciation Percentage Rate Endorsement
TFMI Automobile Insurance Car Key Endorsement
TFMI Automobile Insurance Third Party Liability (self-owned) – Single Sum Insured
TFMI Commutable Disease Compensation Insurance
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TFMI Bank Safe Deposit Box Liability Insurance Endorsement (Taiwan Business Bank only)
TFMI Event Ticket Compensation Insurance
TFMI Health Insurance – Communicable Disease Endorsement
TFMI Travel Expense Insurance
TFMI Passenger Liability Insurance
TFMI Aviation Insurance AIRCRAFT HULL AND THIRD PARTY LIABILITY & AIRCRAFT SPARES INSURANCE
TFMI Commercial Fire Insurance Renewal Endorsement
TFMI Sanction and Limitation Exclusion Endorsement
TFMI Money Insurance Teller's Shortage Endorsement
TFMI Money Insurance Petty Cash Sepecial Endorsement
TFMI Product Liability Insurance Other Spare Parts Endorsement
TFMI Marine Hull Passenger Liability Insurance
TFMI Marine Hull Operator Liability Insurance Protection & Indemnity Insurance (GAIC)
TFMI Marine Hull Insurance Communicable Disease Exclusion Clause
TFMI Marine Hull Insurance Coronavirus Exclusion Clause
TFMI Marine Hull Insurance Lloyd’s K(A) NMA 2989
TFMI Marine Cargo Insurance (G)
TFMI Employer Liability Insurance
TFMI Employer Liability Insurance Maximum Headcount Endorsement
TFMI Employer Liability Insurance Communting and Business Visits Endorsement 36. TFMI Employer Liability Insurance Natural Hazards Liability Endorsement
TFMI Employer Liability Insurance Sanction and Limitation Exclusion Endorsement
TFMI Employer Liability Insurance Ordering Party Endorsement
TFMI Employer Liability Insurance Waiver of Subrogation Right towards the Ordering Party and/or its employees Endorsement
TFMI Employer Liability Insurance Adjustor Appointment Endorsement
TFMI Employer Liability Insurance Overseas Liability Endorsement
TFMI Employer Liability Insurance Excess Coverage Endorsement
TFMI Employer Liability Insurance Consolatory Fee Endorsement
TFMI Employer Liability Insurance Priority Settlement Endorsement
TFMI Employer Liability Insurance Occupational Disaster Compensation Endorsement (A)
TFMI Employer Liability Insurance Occupational Disaster Compensation Endorsement (B)
TFMI Micro Personal Accident Insurance (Not for Group)
TFMI Information Security Protection Insurance
TFMI Electronic Equipment Insurance (for Taiwan Business Bank only)
TFMI Electronic Equipment Insurance F06A Flood coverage for Basement or below ground floor Endorsement (A)
TFMI Group Travel Comprehensive Insurance
TFMI Group Travel Comprehensive Insurance Travel Accident Endorsement
TFMI Group Travel Comprehensive Insurance Travel Accident - Overseas Disease Medical Health Insurance Endorsement
TFMI Group Travel Comprehensive Insurance Travel Accident Medical Insurance Endorsement
TFMI Group Travel Comprehensive Insurance Travel Duration Home Property Security Endorsement
TFMI Group Travel Comprehensive Insurance Travel Duration Home Third Party
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Liability Endorsement

TFMI Fishing Vessel Insurance Communicable Disease Exclusion Clause
TFMI Fishing Vessel Insurance Coronavirus Exclusion Clause
TFMI Fishing Vessel Operator Liability Insurance Protection & Indemnity Insurance (GAIC)
TFMI Bankers Blanket Bond Insurance Special Endorsement (for Taiwan Business Bank only)
TFMI Bankers Blanket Bond Insurance Automatic Tellers Machine Endorsement (for Taiwan Business Bank only)
TFMI Bankers Blanket Bond Insurance Property Transit via Foot Endorsement (for Taiwan Business Bank only)
TFMI Compensation Adjustment Endorsement
5.1.3 Long- and Short-term Business Development Plans
A. Short-term Business Plans
(1) Strengthen customer loss prevention services and prudent underwriting, enhance quality business portfolio and screen sales channels for quality risks to mitigate customer and Company risks, while expanding retained premiums and insurance surplus to maintain stable profits.
(2) Intensify strategic alliances with sales channels and makes use of advantages in rates and diversified channels to expand the targets market.
(3) Continue to develop FinTech, strengthen e-commerce technology and mobile insurance platform, optimize operating procedures, and promote electronic insurance policy issuance to expand business scale, improve efficiency, and increase convenience levels for customers to purchase insurance.
(4) Implement the principle of fair hospitality together with emphasis on customer rights. Provide new products and differentiated services that meet customer needs and improve customer service quality.
(5) Provide new products and differentiated services that meet customer requirements while enhancing the level of services and valuing customer interests.
(6) Develop business opportunities with quality small and medium-sized enterprise and increase market share in all regions.
(7) Adapt various reward and promotion projects to increase competitiveness.
(8) Diversify investments to lower risks and increase its yield rate. It shall also evaluate real estate investments to stabilize income from rent.
B. Long-term Business Development Plans
(1) Business Policy: TFMI adheres to the policy of "stable and customer-oriented operations" to maximize company earnings and shareholder interests and increase customer service quality and satisfaction.
(2) Business Strategy: TFMI shall maintain its core value of stability and pragmatism and seek to achieve our short-, mid- and long-term goals through systematic and strategic management, establishment of scientific goals and implementation of action plans.
- Externally, we shall further the ideals of giving back to society and continue to participate in charity events, fulfill corporate social responsibilities, whereby installing our brand deep into public minds.

On the operation side, through efficiency increase on the insurance purchases,

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policy renewal rates, integrated marketing and sales strategic alliances providing more quality businesses. Also, through various reward programs and development of e-commerce and online insurance purchase platforms to increase our competitive edge. With regard to business product offerings, we actively develops niche quality insurance business lines to increase retained premiums and stabilize earnings. In addition, developing innovative products, and with potential and diversified product packages and increased quality of services for the wellbeing of our Clients. Internally, with a well-structured employee compensation scheme and self-training programs, we cultivate professionals and facilitate quality employee relations. TFMI also fully implements the digitalization of the business operations and continues to optimize work procedures to increase efficiency; place emphasis on premium collection and maintain control of expenses. As for the asset management, we have a fully diversified investment portfolio to reduce risks and increase yield rate. Overall, a legal compliance office and risk management office are established to ensure all risk control and corporate governance monitoring mechanism are in place.

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5.2 Market and Sales Overview

5.2.1 Market Analysis

A. Areas of distribution for principal products of the Company and market shares

Unit: NT$thousands

				Unit: NT$thousands
Insurance Category	Direct Premium Written ($)	Income Premiums of the Domestic Nonlife Insurance Market($)	Market Share (%)	Sales Region
Residential Fire Insurance	`935,591`	`6,493,547`	`14.41`	Taiwan, Penghu, Kinmen and Matsu
Aviation Insurance	`42,548`	`808,194`	`5.26`	Taiwan, Penghu, Kinmen and Matsu
Fishing Vessel Insurance	`56,109`	`1,133,333`	`4.95`	Taiwan, Penghu, Kinmen and Matsu
Compulsory Automobile Liability Insurance	`779,167`	`18,317,663`	`4.25`	Taiwan, Penghu, Kinmen and Matsu
Automobile Insurance	`2,752,164`	`82,507,185`	`3.34`	Taiwan, Penghu, Kinmen and Matsu
Commercial Fire Insurance	`716,711`	`21,798,844`	`3.29`	Taiwan, Penghu, Kinmen and Matsu
Engineering Insurance	`216,483`	`7,140,322`	`3.03`	Taiwan, Penghu, Kinmen and Matsu
Marine Cargo Insurance	`139,566`	`4,846,393`	`2.88`	Taiwan, Penghu, Kinmen and Matsu
Marine Hull Insurance	`45,871`	`1,804,404`	`2.54`	Taiwan, Penghu, Kinmen and Matsu
Personal Accident Insurance	`426,076`	`18,821,100`	`2.26`	Taiwan, Penghu, Kinmen and Matsu
Liability Insurance	`238,774`	`11,699,462`	`2.04`	Taiwan, Penghu, Kinmen and Matsu
Other Insurance	`145,404`	`7,592,822`	`1.92`	Taiwan, Penghu, Kinmen and Matsu
Bond and Credit Insurance	`13,558`	`1,657,068`	`0.82`	Taiwan, Penghu, Kinmen and Matsu
Health Insurance	`4,184`	`6,493,547`	`0.15`	Taiwan, Penghu, Kinmen and Matsu
Total	`6,512,206`	`187,390,287`	`3.48`	Taiwan, Penghu, Kinmen and Matsu

Source: Insurance Premiums of Member Companies from January to December 2020 Compiled by the Nonlife Insurance Association of the Republic of China.

B. State and Growth of Market - A view on the Supply and Demand
(1) Supply
- 1 As of the end of 2020, there are 20 non-life insurance companies in Taiwan and seven of them are foreign operators. The top three accounted for 47.05% of total revenue and each with a market share of over 10%.
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2 Investment growth momentum increased due to increasing semi-conductor production and 5G infrastructure internally.
3 The Authorities focus on finTech development, stimulating the creation of multi-purpose new technology application on web servicing and insurTech.
(2) Demand
1 Local governments are reviewing their rules and regulations or related laws to increas public liability insurance coverage.
○2 The government has continued to promote economic revitalization measures, which is conducive to public infrastructure construction and other investment plans.
3 The housing market is expected to recover, thereby increasing the demand for residential fire insurance.
4 After the relaxation of the fifth phase of online insurance policy, not only the premium limit and insurance cap have been raised, but the convenience for consumers to purchase insurance has also been enhanced to meet the timely needs of travel insurance.
5 The development of the new 5G application market, high-performance computing and other emerging applications and strong demand for remote business opportunities derived from the ongoing pandemic are driving the growth momentum of Taiwan’s exports.
(3) Growth

The frequent occurrence of natural disasters have prompted business owners and the general public to gradually pay more attention to risk managing and safeguarding their own properties. Strong sales momentum in new vehicles, especially the sales growth of high-priced imported vehicles, will drive the growth of automobile insurance. In addition, government agencies are reviewing their self-governance provisions or related laws and increasing public liability insurance coverage, as well as actively assisting insurance companies in developing new insurance products associated with green energy and agriculture. All these factors are expected to positively influence the total income from insurance premiums in the non-life insurance market in 2018.

C. Positive and Negative Factors Affecting our Competitiveness, our Long-term Development, and our Response Strategies
(1) Favorable Factors
- 1 There are still risks in the global trade and business environment. The International Monetary Fund (IMF) predicted on January 26, 2021, that the global economic growth rate will be 5.5% for the whole year. The continued spread of the COVID-19 pandemic will drive demand for business opportunities in remote work and lifestyles as well as the domestic tourism industry. The adoption of emerging technologies will drive and accelerate the domestic semiconductor manufacturing industry due to buildup of 5G infrastructure, and it is expected that investment growth momentum will continue to increase. The Directorate General of Budget, Accounting and Statistics estimates that the domestic economic growth rate in 2021 will be 4.64%.
- 2 The supervision policies of the competent authorities will help maintain market order and ensure that insurance rates return to reasonable risk adequacy level.
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3 Insurance business opportunity increases as Government promoting return of overseas Taiwanese capital, business loans provision and youth entrepreneur programs.
(2) Unfavorable Factors
1 Changes in the automobile insurance business landscape have aggravated market competition and talent poaching.
2 Coverage under Residential Fire line of business expands, loss experience may rise.
3 Rise of consumer protection ideology, claim amount may increase.
4 IFRS 17 enters Phase 2 with increased expenses for the Company.
5 Strict motor vehicle inspection will increase operating costs. Furthermore, a growing awareness and guidelines of anti-money laundering (AML) and counter-financing of terrorism to be stipulated in each insurance company internal controls will also result in cost increase, and furthermore, new forms of competition will rise after the Financial Regulatory Sandbox is passed.
6 Premium level may decrease due to the effect of coronavirus.
(3) Response Strategies
1 Promote niche product and use cross-marketing to expand sales.
2 Make full use of advantages in strategic alliances to expand business relationship with high-quality small and medium-scale businesses.
3 Implement comprehensive risk management and damage control services for Clients, to increase service quality and customer satisfaction and to create competitive advantages for the Company.
4 Establish a comprehensive and easy-to-use information system to increase overall work efficiency and ease for customer usage.
5 Strengthen training for various types of insurance and increase employees' professional knowledge and sales techniques.
6 Comprehensive risk management and damage prevention services to improve customer service quality, enhance customer satisfaction, and create the Company's competitive advantage and value.

5.2.2 Usage and processes for the Company's Main Products

A. Major Uses of the Primary Products
(1) Fire Insurance
- 1 Basic Residential Fire and Earthquake Insurances

Residential Fire Insurance provides coverage for fires, lightning strikes, explosions, aircraft crash and fall of related parts, motor vehicle collisions, damages from smoke, strikes, riots, harassment, malicious destructive behavior, burglary and other dangerous incidents, and offers compensation for such incidents. This insurance also provides compensation for debris removal expenses or temporary housing expenses. In addition, "personal properties in buildings" are also automatically included in the scope of coverage of the Residential Fire Insurance. The personal property insured amount is 30% of the insured value of the building, and is capped at NT$600,000.

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Basic Residential Earthquake Insurance provides coverage for full damages sustained by residential buildings due to earthquakes, as well as fires, explosions, landslides, land subsidence, sliding, cracking, bursts, tsunami, rising tides, floods and other dangerous accidents caused by earthquake.

Basic Residential Third-party Liability Insurance covers injuries, deaths or property damages caused to third parties due to fires, lightning strikes, explosions, fire smoke damage, or other accidents during the insurance period for which the insured person is liable for compensation in accordance with the law and is requested by third parties to provide compensation in accordance the provisions of the insurance contract. The compensation amount in the insurance period is capped at NT$20 million.

The Typhoon and Flood Insurance of Residential Owners is to include the losses due to typhoon and flood affecting the area, based on the limit set in the Table of Limit for the subject coverage.

Residential Glass Insurance covers losses arising from broken glass windows and glass curtains that are installed in exterior walls or broken glass doors that serve as exclusive parts or agreed-upon exclusive parts of exterior access to the covered residential building due to accidents, and offers compensation for such losses.

2 Commercial Fire Insurance

Whether it is an office building, shop, factory, or warehouse, damage or loss of the subject insured is caused by fire, explosions or lightning strikes shall be compensated.

3 Fire Allied Perils Insurance

To meet the needs of any insured, the following coverage can be included in the fire insurance policy as an attachment: A. Explosion B. Earthquake C. Typhoon and flood D. Aircraft crash, motor vehicle collision E. Strike, riot, public harassment, malicious damage behavior F. Automatic fire device seepage G. Burglary H. Rent loss I. Business interruption J. Water stain K. Smoke L. Terrorism M. Third person accident liability.

(2) Marine Cargo Insurance

The Marine Cargo Insurance provides coverage for the damage or loss to the cargo during their transportation process. The marine cargo insurance covers cargo at sea, on land, and in air, via all means of transportation, i.e. automobiles, trains, airplanes.

(3) Marine Hull Insurance

The Marine Hull Insurance covers damage and loss of the hull and machinery due to accidents. The collision liability and insurance for the transportation fee are also included. All ships in transition, in tow, in construction, undergoing repairs or in berth may be insured. Insurance for containers and shipowners’ liability are also included in the coverage.

(4) Fishing Vessel Insurance

The fishing vessel insurance provides compensation for damage or loss of the fishing vessels, machinery equipment, or fishing equipment due to accidents.

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(5) Aviation Insurance

The aviation insurance provides coverage for damage or loss of the aircraft due to accidents as well as the legal liabilities of the owner and user of the aircraft for compensation arising from damage or loss of the aircraft or accidents.

(6) Automobile Insurance

Automobile insurance provides coverage for liabilities of damage or loss of vehicles, and injuries, death, and damage to the properties of third parties caused by accidents. The main insurance categories include compulsory automobile liability, optional third party automobile liability, vehicle damage, and theft. The insured person may choose additional coverages including insurance for typhoons, floods, earthquakes, compensation for victims of automobile accidents involving alcohol, driver liability, passenger liability, and third party relief funds.

(7) Money Insurance

Money insurance provides coverage for the insured person's loss of cash caused by thefts, robberies, fires, explosions, or accidents of the transportation vehicle in delivery, storage, or at the counter.

(8) Bond and Credit Insurance

The bond and credit insurance provides coverage for the insured's loss associated with unethical behavior of employees or the debtors' failure to fulfill debt obligations. The insurance categories include fidelity bond, travel agent performance bond, construction performance bond, and construction advance payment bond, etc.

(9) Liability Insurance

Liability insurance provides the insureds with compensation liability coverage for accidents that cause damage to third parties for which the insured person is liable for compensation in accordance with laws and is requested to pay compensation. The Company provides public liability, contractor liability for construction and maintenance, employers’ liability, product liability, financial institutions professional indemnity, elevator accident liability, golfers’ liability, etc.

(10) Engineering Insurance

Engineering insurance includes construction all risk, erection all risk, electronic equipment, construction plant and machinery, machinery breakdown, and broiler pressure vessel.

(11) Miscellance Insurance

Fine art comprehensive insurance, burglary insurance, glass insurance, and others.

(12) Personal Accident Insurance

Personal Accident Insurance provides coverage for disabilities or death of the insured person caused by accidents for which the Company provides compensation based on the insurance policy. Such products include personal accident insurance and group accident insurance.

(13) Health Insurance
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Health insurance provides compensation to the insured person for hospitalization due to illnesses or injury as well as contraction of major diseases or cancer. Products include hospitalization insurance, major diseases insurance, and cancer insurance.

(14) Comprehensive Travel Insurance

Comprehensive travel insurance provides coverage for disabilities or death of the insured person caused by accidents while travelling. Insurance items include disabilities or death as well as payment for medical expenses for injuries, treatment for sudden illness overseas, emergency expenses, travel inconvenience insurance, third party liabilities for residences, and residential property loss.

(15) Travel Accident Insurance

Travel Accident Insurance provides short-term coverage (with a maximum period of 180 days) to the insured person when he/she is involved in a travel accident that causes disability or death within the insurance period, and pays the insured amount in accordance with the insurance policy. Other than disability or death, this insurance also provides additional coverages such as medical, severe burn and food poisoning consolation expenses.

(16) Commutable Disease Compensation Insurance (Personal)

When the insured is been required to quaranteed due to CDC requirement during the insurance period, a fixed amount of insurance benefits shall be paid in accordance with the insurance contract.

B. Production process

The insurance products designed and developed by non-life insurance companies shall factor in actual past loss experience and expenses for setting insurance premium rates and all insurance products shall be submitted to the authority for approval or registration before issuance.

5.2.3 State of supply of chief raw materials: Not applicable.
5.2.4 The names of customers who accounted for more than 10% of sales for any given year within the last two years, their purchase amount and proportion, and reasons for changes (increase or decrease) in sales:
A. Names of the top ten customers in the two most recent years, the amount, ratio, and reasons for increase and reduction of such sales:

The Company is an insurance company and does not have important customers who account for over 10% of operating revenue. There fore this requirement is not applicable.

B. Names of the top ten suppliers in the two most recent years, the amount, ratio, and reasons for increase and reduction of such sales: Not applicable.

5.2.5 Table of production volume in the 2 most recent years: Not applicable.

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5.2.6 Sales volume/value of the last two years

Unit: NT$thousands

Year Underwriting volume and value Main Product	`2020`	`2020`	`2019`	`2019`
	Net Premium Income	Policy Count	Net Premium Income	Policy Count
Automobile Insurance	`3,531,331`	`1,327,395`	`3,323,928`	`1,271,017`
Fire Insurance	`1,652,302`	`519,827`	`1,584,294`	`490,030`
Marine Insurance	`241,546`	`35,449`	`247,681`	`37,793`
LiabilityInsurance	`1,087,027`	`162,615`	`1,070,758`	`253,598`
Total	`6,512,206`	`2,045,286`	`6,226,661`	`2,052,438`

5.3. Employee Information

Employee information in the last two years up to the printing of this Report

Year	Year	`2020`	`2019`	Current Year as of March 31,2021
Number of Employees (Note)	Full-time employees	901	912	905
	Contractual personnel	0	0	0
	Workmen	0	0	0
	Total	901	912	905
Average Age		42.3	41.5	42.3
Average Years of Service		9.6	9.0	9.6
Education Background Distribution Percentage	Ph.D.	0.1%	0.2%	0.1%
	Master's	11.0%	10.3%	10.6%
	Bachelor's and other Higher Education	80.4%	80.6%	80.9%
	High School	8.2%	8.6%	8.1%
	Below High School	0.3%	0.3%	0.3%

Note: For the past two years, the number of Directors who did not serve as employees was 9. The number of Directors who do not serve as employees in 2021 is 11.

5.4. Spending on environmental protections

The Company is an insurance company and does not cause major pollutions.

5.5. Labor relations

5.5.1 Employee welfare

A. The Company has established the Employee Welfare Committee in accordance with the Employee Welfare Fund Act. We regularly organize meetings to promote employee welfare and we plan various employee welfare measures to improve
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employees' quality of life.

B. The welfare measures organized by the Company's Employee Welfare Committee and Human Resources Department include:
(1) Benefits and subsidies: Gift money for three Chinese festivals, birthday gift money, wedding gift money, funerary subsidies, etc.
(2) Cultural and leisure activities: Monthly birthday parties, year-end party and lucky draw events, club activities, and tourism activities.
(3) Other subsidies: Emergency relief, group insurance, family member group insurance, employee health examination, etc.
C. In addition to the gift money for the three Chinese festivals and wedding gift money for employees, the Company also subsidized and established clubs in 2019 in accordance with the Club Subsidies Regulations to encourage employee participation in leisure activities and promote connections between employees. In addition, the Company provides all employees with health examination and employee group insurance to reward their hard work and promote their welfare. Life insurance, accident insurance, medical insurance, and cancer insurance are included to provide employees with extensive coverage.

5.5.2 Studies and training

A. The Company has established the Professional Insurance License Examination Incentives to encourage employees to study insurance management and gain related professional skills. We provide rewards and assistance measures to encourage employees to obtain various professional licenses and actively cultivate professional insurance talents.
B. To help build employees’ professional insurance skills, we also regularly organize education and training given by employees who serve as internal lecturers for professional roles required for insurance operations so that employees may exchange and share their experience. We also organize employees’ participation in external professional courses based on business and employee development requirements to gain professional knowledge.
C. The Company's annual training include internal training and training courses provided by external institutions which target the four major roles for "management, core businesses, marketing, and administrative resources". We adopt performance and task-oriented training suitable for different roles and different levels. The internal and external training in 2020 amounted to an average of 38.33 hours per person per month with a total of 34,539 training hours in 405 courses with more than 20,798 participants and NT$3,921 thousand in training expenditures.

The top ten internal and external trainings in 2020 were as follows:

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Category	Category	Course Title	Date	Number of Participants	Total Hours
Internal training	1	Fair Dealing Principle in financial service industry	January~ December	896	2,688
	2	Information Security Courses	January~ December	896	2,688
	3	Anti-Money Laundering and Combat Financing of Terrorism	January~ December	896	1,972
	4	Education and Training on Friendly Financial Service Standards	January~ December	896	448
	5	Corporate Ethical Management Education and Training	January~ December	896	1,792
	6	Education and Training on Procedures for Handling Material Inside Information	January~ December	896	448
	7	Personal Information Protection Act	January~ December	895	1,790
	8	Occupational Safety and Health Education and Training	January~ December	895	895
	9	Rules of Insurance Salesperson Management - Regulations of Reward and Punishment for Soliciting	January~ December	895	447.5
	10	Workplace Sexual Harassment Prevention Education and Training	January~ December	895	447.5

Category		Course Title	Date	Number of Participants	Total Hours
External training	1	Compliance Officers OJT - "The Importance of Risk Management in the Insurance Industry in light of International Anti-corruption Trends" -via video conference	July	29	87
	2	Compliance Officers OJT - "Sales of New Insurance Products and Related Regulations" -via video conference	July	29	87
	3	Compliance Officers OJT - "Learn about Corporate Information Security Threats from Information Security Case Studies" -via video conference	July	29	87
	4	Compliance Officers OJT - "Newly Revised Laws and Regulations (including Solicitation, AML, Underwriting, and Claims Settlement)" -via video conference	July	29	87
	5	Compliance Officers OJT - "Fair Hospitality Principle Assessment Focus and Supervision Trends" - via video conference	July	29	87
	6	Anti-Money Laundering Supervisor OJT - "Suggestions for Improvement of APG Evaluation Results on Taiwan" - via video conference	August	27	81
	7	Anti-Money Laundering Supervisor OJT - “New Amendment Acts on Prevention of Money Laundering and Countering Terrorism Financing at Home and Abroad" - via video conference	August	27	81
	8	Anti-Money Laundering Supervisor OJT - “Assessment of Eight Major Money Laundering Specific Crimes and Insurance Product Money Laundering Risks” -via video conference	August	27	81
	9	Anti-Money Laundering Supervisor OJT - "Money Laundering and Terrorism Financing Risk Trends and Attitudes"- via video conference	August	27	81
	10	Risk Control and Development Trend of Nonlife Insurance-Operations Continuity, Emergency Response and Crisis Management	August	14	42

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5.5.3 Retirement system

A. The Company established the Labor Retirement Regulations to take care of employees after retirement, foster cooperation between employees and the management, and improve work efficiency.
B. To comply with the Labor Pension Act released on July 1st 2005, the Company appropriates pension funds for employees who opt for the new system to their personal pension accounts. The Company also appoints actuaries to evaluate and calculate labor pension preparatory fund and file actuary reports in accordance with IAS 19 as an important basis for the adjustment of the Company's appropriation of pension preparatory funds to fully protect employees' retirement benefits.
C. The Company appropriated a total of NT$7,224,000 to the Department of Trusts of the Bank of Taiwan in 2020 as labor pension preparatory fund under the old system. The cumulative account balance of the labor pension preparatory fund at the end of the year was NT$58,197,000. The Company also regularly appropriates 6% of the employees' monthly salaries to the personal pension account of employees under the new labor pension system. We appropriated NT$27,787,000 in labor pension under the new system in 2020 to fully protect employees' rights and interest after retirement.

5.5.4 Protection measures for work environment and employee safety

To ensure the safety of employees in all business and office areas, the Company purchases public accident liability insurance each year and conducts fire safety inspections in accordance with fire safety regulations.

In terms of the protection of physical health, the Company organizes physical examinations for new employees and organizes on-the-job health examinations for employees each year to track and protect the physical health of employees. In addition, the Company provides all employees with employee group insurance to prevent accidents from affecting the physical health of employees. Life insurance, accident insurance, and medical insurance are included to provide employees with extensive coverage.

The Company has been applicable to the Occupational Safety and Health Act and related regulations since August 2005. It has assigned 11 employees from various units to take part in Class A, B, and C supervisor training for occupational safety. The Company's Occupational Health and Safety Work Rules and various occupational health and safety supervisors have been registered with local Labor Bureaus and announced on the "Employee Safety and Health" section on the webpage for reference by all employees. The occupational safety and health supervisor of each unit implements various automatic inspection systems and education and training programs to achieve the goal of "zero-incident".

5.5.5 Establishment of the Employee Code of Conduct or Ethics

The Company had a "Code of Ethical Conduct" and "Working Rules," which clearly stipulated the behavior and ethics for the employees, and was disclosed on the official website of the Company (https://www.tfmi.com.tw) and internal webpage.

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5.5.6 Related certifications obtained from the relevant competent authorities by personnel associated with the transparency of financial information as of the publication date of the Annual Report

are as follows:

are as follows:
Certification Type	Organizer	Number of Employees
Basic Proficiency Test on Enterprise Internal Control	Securities and Futures Institute	4
Official Member of the Actuarial Institute of Chinese Taipei	Actuarial Institute of Chinese Taipei	1
Nonlife Insurance Sales RepresentativeQualifications	Nonlife Insurance Association of the Republic of China	861
Nonlife Insurance Underwriting and Claims OfficerQualifications	Nonlife Underwriters Society of the Republic of China	71
Personal Insurance Sales RepresentativeQualifications	Life Insurance Association of the Republic of China	262
Corporate Risk Management Officer	Risk Management Society of Taiwan	1
Personal Risk Management Officer	Risk Management Society of Taiwan	6
Nonlife Insurance Broker	Examination Yuan	5
Nonlife Insurance Agent	Examination Yuan	2
Personal Insurance Broker	Examination Yuan	4
Personal Insurance Agent	Examination Yuan	1

5.5.7 The Company invites representatives from staff and management levels to regular employee-management meetings each quarter and publishes various meeting minutes and implementation status to develop employee-management relationships, foster cooperation, and improve work performance.
5.5.8 List the losses suffered due to labor disputes in the most recent fiscal year up to the publication date of this annual report, and disclose the estimated amount arising both at present and in the future and the corresponding countermeasures. If the amount cannot be reasonably estimated, facts of which estimation cannot be made shall be explained: None.
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5.6 Main Reinsurance Contract

Contract	Reinsurer	Contract Period	Contents/Coverage	Restriction Clause
Reinsurance Contract	Central Reinsurance Corporation	Jan. 01, 2020 Dec. 31, 2020	Reinsurance contracts for fire, marine, engineering, liability, agriculture, motor, personal accident, and health insurance policies.	Contract Exclusions Clause.
	Munich Reinsurance Company	Jan. 01, 2020 Dec. 31, 2020	Reinsurance contracts for marine, liability, and motor insurance policies.	Contract Exclusions Clause.
	Partner Reinsurance Europe SE	Jan. 01, 2020 Dec. 31, 2020	Reinsurance contracts for fire, marine, engineering, liability, and motor insurancepolicies.	Contract Exclusions Clause.
	The Toa Reinsurance Company, Limited	Jan. 01, 2020 Dec. 31, 2020	Reinsurance contracts for fire, catastrophe, marine, and liability insurancepolicies.	Contract Exclusions Clause.
	Transatlantic Reinsurance Company	Jan. 01, 2020 Dec. 31, 2020	Reinsurance contracts for fire, catastrophe, marine, engineering, and liabilityinsurancepolicies.	Contract Exclusions Clause.

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、 VI Financial Information

6.1. Five-Year Financial Summary

6.1.1 Condensed Balance Sheet–Based on IFRS

A. Summary balance sheet

Unit: NT$thousands

Year Item	Year Item	Financial for The Last Five Years (Note1)	Financial for The Last Five Years (Note1)	Financial for The Last Five Years (Note1)	Financial for The Last Five Years (Note1)	Financial for The Last Five Years (Note1)	As of March 31,2021 （Note 2）
		`2020`	`2019`	`2018`	`2017`	`2016`
Cash and cash equivalents		`3,684,530`	`3,415,293`	`3,237,541`	`3,338,629`	`3,080,891`	`4,711,142`
Receivables		`665,460`	`612,947`	`675,614`	`710,462`	`631,102`	`1,432,050`
Available-for-sale assets		`-`	`-`	`-`	`-`	`-`	`-`
Other Financial assets and Loans(Note 3)		`12,096,213`	`11,741,232`	`11,064,690`	`10,690,130`	`10,620,842`	`12,343,378`
Reinsurance assets		`1,919,371`	`1,919,723`	`1,888,798`	`2,127,414`	`2,223,841`	`2,015,629`
Property,Plant and Equipment		`356,406`	`360,389`	`376,485`	`379,724`	`371,611`	`462,909`
Right-of-use asset		`45,751`	`34,132`	`-`	`-`	`-`	`42,815`
Intangible assets		`9,957`	`4,708`	`2,664`	`4,718`	`3,400`	`10,537`
Other assets(Note 3)		`802,948`	`798,491`	`732,689`	`720,543`	`717,928`	`826,632`
Total assets		`19,580,636`	`18,886,915`	`17,978,481`	`17,971,620`	`17,649,615`	`21,845,092`
Payables		`994,378`	`984,681`	`923,186`	`867,408`	`865,597`	`1,757,336`
Liabilities directly related to assets held for sales		`-`	`-`	`-`	`-`	`-`	`-`
Other Financial liabilities		`-`	`-`	`-`	`-`	`-`	`-`
Lease Liabilities		`71,498`	`66,645`	`-`	`-`	`-`	`67,025`
Insurance liabilities and Reserve for the Insurance Contract with the Nature of Financial Products		`8,468,433`	`8,253,100`	`8,097,638`	`8,082,318`	`8,292,437`	`10,102,000`
Provisions		`82,378`	`84,127`	`84,848`	`83,571`	`79,318`	`81,286`
Other liabilities(Note 3)		`383,416`	`410,488`	`453,752`	`422,401`	`560,375`	`373,435`
Total liabilities	Before distribution	`10,000,103`	`9,799,041`	`9,559,424`	`9,455,698`	`9,797,727`	`12,381,082`
	After distribution	`10,398,524`	`10,161,242`	`9,885,405`	`9,854,119`	`10,123,708`	`(`註`4)`
Capital Stock		`3,622,004`	`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`	`98,962`
Retained earnings	Before distribution	`5,750,823`	`5,413,849`	`5,043,571`	`4,807,126`	`4,285,173`	`5,416,914`
	Before distribution	`5,352,402`	`5,051,648`	`4,717,590`	`4,408,705`	`3,959,192`	`(`註`4)`
Other equity		`180,744`	`(46,941)`	`(345,480)`	`(12,170)`	`(154,251)`	`326,130`
Total equity	Before distribution	`9,580,533`	`9,087,874`	`8,419,057`	`8,515,922`	`7,851,888`	`9,464,010`
	Before distribution	`9,182,112`	`8,725,673`	`8,093,076`	`8,117,501`	`7,525,907`	`(`註`4)`

Note 1: The Company's financial information audited and certified by CPAs for the last five years.

Note 2: The Company's financial data in the current year as of March 31, 2021 have been audited by the CPA.

Note 3: (1) The financial assets and loans include financial assets at fair value through profit or loss, available-for-sale

financial assets, financial assets measured at cost, investment accounted for using equity method, other financial assets, financial assets measured at fair value through other comprehensive profits and losses, and real estate investment.

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(2) Other assets include deferred income tax assets and other assets.
(3) Other liabilities include income tax liabilities, deferred income tax liabilities, and other liabilities in the current period.
Note 4: The numbers after distribution above are based on the resolutions of the shareholders' meeting in the following year. The numbers for the period after March 31, 2021 are not filled because the 2022 shareholders' meeting is not yet convened.

Note : ﹝ - ﹞ in the table means ﹝ 0 ﹞ .

B. Condensed statement of comprehensive income

Unit: NT$thousands

Year Item	Financial for The Last Five Years (Note1)	Financial for The Last Five Years (Note1)	Financial for The Last Five Years (Note1)	Financial for The Last Five Years (Note1)	Financial for The Last Five Years (Note1)	As of March 31,202 （Note 2）
	`2020`	`2019`	`2018`	`2017`	`2016`
Operatingrevenue	`5,396,686`	`5,200,892`	`4,942,674`	`5,058,168`	`4,568,938`	`1,739,788`
Grossprofit	`2,034,170`	`2,049,515`	`1,847,223`	`2,154,204`	`1,616,745`	`368,201`
Operatingincome/loss	`770,399`	`839,851`	`666,407`	`959,950`	`596,590`	`(46,479)`
Non-operating income and expenses	`2,540`	`(6,199)`	`6,998`	`(24,408)`	`(2,463)`	`(867)`
Pretaxprofit	`772,939`	`833,652`	`673,405`	`935,542`	`594,127`	`(47,346)`
Continuing operations Net income	`687,595`	`703,129`	`560,299`	`851,701`	`490,130`	`(21,160)`
Losses from discontinued operations	`-`	`-`	`-`	`-`	`-`	`-`
Net income	`687,595`	`703,129`	`560,299`	`851,701`	`490,130`	`(21,160)`
Other consolidated income in current period (Net income after tax)	`167,265`	`297,722`	`(183,077)`	`138,314`	`80,603`	`303,058`
Total comprehensive income in the current period	`854,860`	`1,000,851`	`377,222`	`990,015`	`570,733`	`281,898`
Earnings per Share (NTD)	`1.90`	`1.94`	`1.55`	`2.35`	`1.35`	`(0.06)`

Note 1: The Company's financial information audited and certified by CPAs for the last five years. Note 2: The CPA has audited the Company’s financial data in the current year as of March 31, 2021. Note 3: ﹝ - ﹞ in the table means ﹝ 0 ﹞ .

6.1.2 Auditors' Opinions from 2016 to 2020

Names of financial statement auditors in the last 5 years and audit opinions ：

Year	Accounting Firm	CPA	Audit opinion
2016	Deloitte & Touche Tax ConsultingCo.,Ltd	Chen-Hsiu Yang, Shiuh-Ran Cheng	Unqualified opinion
2017	Deloitte & Touche Tax ConsultingCo.,Ltd	Wang-Sheng Lin, Chen-Hsiu Yang	Unqualified opinion
2018	Deloitte & Touche Tax ConsultingCo.,Ltd	Wang-Sheng Lin, Chen-Hsiu Yang	Unqualified opinion
2019	Deloitte & Touche Tax ConsultingCo.,Ltd	Wang-Sheng Lin, Wen-Yea Shyu	Unqualified opinion
2020	Deloitte & Touche Tax ConsultingCo.,Ltd	Wang-Sheng Lin, Wen-Yea Shyu	Unqualified opinion

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6.1.3 Key Performance Indicators (KPIs)

Unit: %

		Unit:`%`	Unit:`%`	Unit:`%`	Unit:`%`	Unit:`%`
analyzed	Year Item	Most Recent 5-Year Financial Information
		`2020`	`2019`	`2018`	`2017`	`2016`
Operating performance	Retained premiums to equity ratio	`50.92`	`50.91`	`51.71`	`49.67`	`50.74`
	Gross premiums to equity ratio	`72.46`	`73.18`	`76.06`	`73.71`	`75.92`
Profitability	Retained combined ratio	`91.43`	`90.51`	`91.73`	`91.16`	`92.84`
	Retained expense ratio	`38.79`	`38.88`	`39.90`	`40.71`	`38.46`
	Retained endowment loss ratio	`52.64`	`51.63`	`51.83`	`50.45`	`54.38`

1. Operating ability

(1) Retained premiums to equity ratio = retained premiums/equity.
(Retained written policy premiums = direct premium income + reinsurance premium income - reinsurance premium expenditures)
(2) Gross premiums to equity ratio = (direct premium income + reinsurance premium income)/equity.

2. Profitability

(1) Retained combined ratio = retained expense ratio + retained endowment loss ratio
(2) Retained expense ratio = retained expense/retained premiums
(Retained premiums = direct premium income + reinsurance premium income - reinsurance premium expenditures)
(Retained expenses = commission and undertaking fee expenditures + reinsurance commission expenditures - reinsurance commission income + business expenses + management expenses + real property depreciation bad debts and amortization)
(3) Retained endowment loss ratio = retained insurance claims/retained endowment premiums.
(Retained insurance claims = insurance claims and payment - recovery to reinsurance and payment + net variation in claim reserve)
(Retained endowment premiums = written policy premium income + reinsurance premium income - reinsurance premium expenditures - net variation in immature insurance premiums)
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6.2. Five-Year Financial Analysis

Financial Analysis

		Financial Analysis	Financial Analysis	Financial Analysis	Financial Analysis	Financial Analysis
Year（Note 1） Item（Note 4）		Financial Analysis for the Last Five Years					As of March 31,2021 （Note2）
		`2020`	`2019`	`2018`	`2017`	`2016`
FinancialRatio （％）	Total liabilities to total assets	`51.07`	`51.88`	`53.17`	`52.61`	`55.51`	`56.68`
	Long-term capital to PP&E	(Note 3)	(Note 3)	(Note 3)	(Note 3)	(Note 3)	(Note 3)
Ability to payoff debt％	Current ratio	(Note 3)	(Note 3)	(Note 3)	(Note 3)	(Note 3)	(Note 3)
	Quick ratio	(Note 3)	(Note 3)	(Note 3)	(Note 3)	(Note 3)	(Note 3)
	Interestprotection	`-`	`-`	`-`	`-`	`-`	`-`
Ability to operate	A/R turnover(times)	`11.82`	`10.99`	`9.56`	`9.60`	`8.98`	`3.59`
	A/R turnover days	`31`	`33`	`38`	`38`	`41`	`102`
	Inventoryturnover(times)	`-`	`-`	`-`	`-`	`-`	`-`
	Account payable turnover (times)	`-`	`-`	`-`	`-`	`-`	`-`
	Days sales outstanding	`-`	`-`	`-`	`-`	`-`	`-`
	Fixed assets turnover (times)	`15.06`	`14.12`	`13.07`	`13.46`	`12.40`	`4.25`
	Total assets turnover (times)	`0.28`	`0.28`	`0.27`	`0.28`	`0.26`	`0.08`
Earning ability	Return on assets(%)	`3.57`	`3.81`	`3.12`	`4.78`	`2.82`	`(0.10)`
	Return on equity (%)	`7.37`	`8.03`	`6.62`	`10.41`	`6.30`	`(0.22)`
	PBT to pay-in capital (%) (Note8)	`21.34`	`23.02`	`18.59`	`25.83`	`16.40`	`(1.31)`
	Net margin(%)	`12.74`	`13.52`	`11.34`	`16.84`	`10.73`	`(1.22)`
	EPS(NT$)	`1.90`	`1.94`	`1.55`	`2.35`	`1.35`	`(0.06)`
Cash flow	Cash flow ratio (%)	(Note 3)	(Note 3)	(Note 3)	(Note 3)	(Note 3)	(Note 3)
	Cash flow adequacy ratio (%)	`151.60`	`88.21`	`69.69`	`102.27`	`103.59`	`218.53`
	Cash reinvestment ratio (%)	(Note 3)	(Note 3)	(Note 3)	(Note 3)	(Note 3)	(Note 3)
Leverage	Operating leverage	`270.83`	`249.03`	`282.43`	`229.21`	`277.76`	`(821.70)`
	Financial leverage	`100.00`	`100.00`	`100.00`	`100.00`	`100.00`	`100.00`
1. Explanation to significance changes of 20% or higher in the last two years: The increase in the allowable cash flow ratio is due to the increase in net cash inflow from operating activities in the last five years compared to the previous period.

Note 4: The equations for the calculation of the above financial ratios (under IFRS) are shown below: (1) Financial structure
(A) Liabilities to assets ratio = total liabilities/total assets
(B) Long-term capital to real estate, plants, and equipment ratio = (total equity + non-current liabilities)/net value of real estate, plants, and equipment
(2) Ability to repay debts
(A) Current ratio = current assets/ current liabilities
(B) Quick ratio = (current assets – inventory – prepayments) / current liabilities
(C) Debt services coverage ratio = EBIT/interest expenses in current period
(3) Utility
(A) Receivables (including account receivables and note receivables deriving from business operation)
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turnover = net sales/the average receivable balance in each period (including account receivables and note receivables deriving from business operation)

(B) Average days for cash receipt = 365 days/receivable turnover rate
(C) Inventory turnover = cost of goods sold / average inventory
(D) Payables (including account payables and note payables deriving from business operations) turnover = cost of goods sold/ average payable balance in each period (including account payables and note payables deriving from business operation).
(E) Average days of sales = 365 days/ inventory turnover rate.
(F) Real estate, plants, and equipment turnover = net sales/net value of real estate, plants, and equipment.
(G) Total assets turnover = net sales/ average total assets.
(4) Profitability
(A) ROA = [Corporate earnings + interest expense x (1- tax rate)] / average total assets
(B) ROE = Corporate earnings /average total equity
(C) Net profit rate = Corporate earnings / net sales
(D) EPS = (Earnings attributable to the owners of parent – preferred stock dividend)/ weighted average quantity of outstanding shares
(5) Cash flow
(A) Cash flow ratio = net cash flow from operation / current liabilities
(B) Net cash flow adequacy ratio = net cash flow from operation in the last 5 years/ (capital expenditure + increase in inventory + cash dividend) in the last 5 years
(C) Cash reinvestment ratio = (net cash flow from operation – cash dividend) /gross real estate, plants, and equipment + long-term investment + other non-current assets + working capital)
(6) Leverage:
(A) Operation leverage = (net sales – cost of goods sold and expenses) /operating income
(B) Financial leverage = operating income / (operation income – interest expenses)
Note 5: Attention to the following items is advised in assessing the equation for the calculation of earnings per share:
(1) Based on the weighted average quantity of outstanding common shares in current year.
(2) For new share issue through capitalization of retained earnings and capital surplus, adjustment in proportion of the amount of capital raised shall be made in the calculation of the annual or semi-annual earnings per share of the previous year.
Note 6: ﹝ - ﹞ in the table means ﹝ 0 ﹞ .
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6.3. Audit Committee's Audit Report for the most recent fiscal year

Audit Committee's Audit Report

The Board of Directors has prepared the 2020 Business Report, Financial Statements and the Earnings Distribution Proposal in accordance with Article 228 of the Company Act. The Financial Statements have been audited by CPAs Wangsheng, Lin and Wen-Yea Shyu of Deloitte & Touche who have submitted an Audit Report. The preceding Business Report, Financial Statements and the Earnings Distribution Proposal have been reviewed by the Audit Committee who found no inconsistencies. In accordance with Article 219 of the Company Act and Article 14-4 of the Securities and Exchange Act, this report is submitted for shareholder's examination.

To:

2021 Annual General Shareholders’ Meeting of Taiwan Fire & Marine Insurance Co., Ltd.

Audit Committee

Convener: Cheng Ching Huang

April 29, 2021

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6.4. Financial statements of the most recent year

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 2020 and 2019 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 2020 and 2019, 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 2020 and 2019, and its financial performance and cash flows between January 1 and December 31 of 2020 and 2019.

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

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adequate evidence has been obtained for the audit to serve as the basis for expressing the audit opinions.

Key Matters Being Audited

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 2020 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 2020 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

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.
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:
(1) The actuarial experts of the firm obtained the information from each accident year developed until December 31, 2020 (e.g. the policies with claims and the amounts of
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claims each year), and regenerated the development trend of losses and key assumptions using actuarial methods, in order to assess whether the development trend of losses and key assumptions applied by Taiwan Fire & Marine Insurance Co., Ltd. are reasonable.

(2) Based on the regenerated development trend of losses and key assumptions, the actuarial experts of the firm has estimated the final insurance claims as of December 31, 2020, while considering the paid claims by Taiwan Fire & Marine Insurance Co., Ltd. as of December 31, 2020, 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

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or an overview of 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:

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.
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.
Evaluate the adequacy of accounting policies adopted by the management and the legitimacy of accounting estimates and related disclosures made.
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.
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 2020 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 26, 2021

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

December 31, 2020 and 2019

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 21200 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 Claims payable 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 31,2020 Amount % $ 3,684,530 19 96,108 1 485,363 2 83,989 - 665,460 3 1,938,689 10 242,485 1 2,969,507 15 4,658,775 24 2,286,757 12 12,096,213 62 21,081 - 171,016 1 1,727,274 9 1,919,371 10 356,406 2 45,751 - 9,957 - 36,700 - 727,917 4 38,331 - 766,248 4 $ 19,580,636 100 $ - - 139,163 1 368,995 2 486,220 2 994,378 5 38,823 - 71,498 - 3,447,801 17 2,894,345 15 2,118,699 11 7,588 - 8,468,433 43 82,378 1 266,669 1 34,899 - 43,025 1 77,924 1 10,000,103 51 3,622,004 18 1,915 - 97,047 1 98,962 1 2,381,521 12 2,571,709 13 797,593 4 5,750,823 29 108,744 1 9,580,533 49 $ 19,580,636 100		December 31,2019	December 31,2019
			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		Amount $ 3,415,293 120,617 399,756 92,574 612,947 1,765,352 217,939 2,954,550 4,389,413 2,413,978 11,741,232 32,614 103,073 1,784,036 1,919,723 360,389 34,132 4,708 29,322 730,845 38,324 769,169 $ 18,886,915 $ 4,404 126,025 390,432 463,820 984,681 64,964 66,645 3,215,885 2,888,112 2,141,949 7,154 8,253,100 84,127 274,092 35,262 36,170 71,432 9,799,041 3,622,004 1,915 97,047 98,962 2,242,269 2,415,551 756,029 5,413,849 46,941 ) 9,087,874 $ 18,886,915	%
				(		18 1 2 1 4 9 1 16 23 13 62 - 1 9 10 2 - - - 4 - 4 100 - 1 2 2 5 - - 17 15 12 - 44 1 2 - - - 52 19 - - - 12 13 4 29 - 48 100

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 2020 and 2019

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		2020	% 121 8 129 38 4 87 4 1 2 1 3 1 ( 1 ) 2 - - 100		2019	% 120 8 128 39 3 86 5 1 2 1 2 1 - 2 - - 100	% (%)
		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			Amount $ 6,226,661 423,433 6,650,094 2,023,010 149,856 4,477,228 238,569 56,785 119,763 65,772 120,057 41,438 25,856 ) 107,150 335 ) 321 5,200,892
	(			( (			5 2 4 2 21 5 ( 12 ) 7 - ( 2 ) 19 ( 38 ) 36 2 213 ( 99 ) 4

(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 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		2020	% 58 15 43 2 - - 2 16 1 62 16 8 - - 24 14 - 14 1 13 - -		2019	% 57 11 46 ( 1 ) ( 1 ) - ( 2 ) 16 1 61 16 8 - ( 1 ) 23 16 - 16 3 13 - -	% (%)
		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 1,214 243			Amount $ 2,942,583 580,246 2,362,337 50,926 ) 46,276 ) 1,506 ) 98,708 ) 845,748 42,000 3,151,377 849,133 388,172 3,596 31,237 ) 1,209,664 839,851 6,199 ) 833,652 130,523 703,129 4,061 ) 812 )
	(			( ( ( ( ( ( ( (			6 33 - 331 ( 50 ) 129 196 2 25 7 1 1 9 129 4 ( 8 ) 141 ( 7 ) ( 35 ) ( 2 ) 130 130

(To be continued)

152 -

(Continued)

Code 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		2020	% 2 1 3 16		2019	% 5 1 6 19	% (%)
		Amount $ 131,256 35,038 167,265 $ 854,860 $ 1.90 $ 1.89			Amount $ 279,688 21,283 297,722 $ 1,000,851 $ 1.94 $ 1.93
							( 53 ) 65 ( 44 ) ( 15 )

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

Chairman: Steve Lee

President: Chao-Feng Chen Chief Accountant: Pi-Chen Wang

153 -

Taiwan Fire & Marine Insurance Co., Ltd.

STATEMENTS OF CHANGES IN EQUITY

From January 1 to December 31 of 2020 and 2019

Unit: NT$ Thousand

Code A1 Balance at January 1, 2019 A3 Impact from retrospective application and restatement A5 Balance after restatement on January 1, 2019 Appropriation of 2018 earnings B1 Appropriation of Legal reserve B3 Appropriation of special reserves B5 Cash dividends distributed by the Company B3 Appropriation of special reserves D1 Net profit for 2019 D3 Other comprehensive loss for 2019 D5 Total Comprehensive Income for 2019 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, 2019 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		Capital $ 3,622,004 - 3,622,004 - - - - - - - - 3,622,004 - - - - - - - $ 3,622,004		Capital surplus $ 98,962 - 98,962 - - - - - - - - 98,962 - - - - - - - $ 98,962			Retained earnings	Retained earnings	Unappropriated earnings $ 698,233 ( 6,053 ) 692,180 ( 112,060 ) ( 2,801 ) ( 325,981 ) ( 197,621 ) 703,129 ( 3,249 ) 699,880 2,432 756,029 ( 139,252 ) ( 362,201 ) ( 156,158 ) 687,595 971 688,566 10,609 $ 797,593	Other Equity (Note 19) Unrealized Gain and Losses on Financial Assets at Fair Value Through Other Comprehensive Income ( $ 345,480 ) - ( 345,480 ) - - - - - 300,971 300,971 ( 2,432 ) ( 46,941 ) - - - - 166,294 166,294 ( 10,609 ) $ 108,744	Stockholders’ Equity	Stockholders’ Equity
						Legal reserve $ 2,130,209 - 2,130,209 112,060 - - - - - - - 2,242,269 139,252 - - - - - - $ 2,381,521		Special reserve $ 2,215,129 - 2,215,129 - 2,801 - 197,621 - - - - 2,415,551 - - 156,158 - - - - $ 2,571,709
									( ( ( ( ( ( ( ( (	( ( ( ( (	( ( (	$ 8,419,057 6,053 ) 8,413,004 - - 325,981 ) - 703,129 297,722 1,000,851 - 9,087,874 - 362,201 ) - 687,595 167,265 854,860 - $ 9,580,533

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

Chairman: Steve Lee

President: Chao-Feng Chen

Chief Accountant: Pi-Chen Wang

154 -

Taiwan Fire & Marine Insurance Co., Ltd.

STATEMENTS OF CASH FLOWS

From January 1 to December 31 of 2020 and 2019

Unit: NT$ Thousand

Code
CASH FLOWS FROM OPERATING
ACTIVITIES
A00010
Net Income before income tax from
continuing operation
A20010
Income Charges (Credits)
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
Impairment loss (reversal gain) on
expected credit - investment
A21850
Impairment loss (reversal gain) on
expected credit - non- investment
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

A50000
Changes in Operating Assets and Liabilities
A51110
Notes receivable decrease
A51120
Decrease (increase) premiums
receivable
A51130
(Increase) decrease in other receivable
A51140
Decrease (increase) in financial assets
at fair value through profit or loss
A51141
Increase of financial assets at fair
value through other comprehensive
income

2020
2019
$ 772,939
$ 833,652
58,854
61,177
3,226
2,438
(
149,480 )
(
131,834 )
(
54,205 )
(
53,995 )
(
4,054 )
-
1,661
2,020
(
119,700 )
(
119,763 )
276,068
51,148
(
378 )
335
8,968
(
31,237 )
(
25,596 )
(
41,438 )
157
-
(
32,206 )
-
(
3,973 )
(
246 )
31,331
24,493
(
32 )
(
2 )

24,929
27,551
(
87,304 )
74,829

5,985
(
19,666 )
(
119,132 )
535,117
(
136,205 )
(
749,639 )

(To be continued)

155 -

(Continued)

Code A51160 Increase in other financial assets A51170 Decrease (increase) in reinsurance contract asset A51990 Increase in other assets A52120 Increase (decrease) in claims payable A52140 Increase (decrease) in commissions payable A52150 Increase (decrease) in due to reinsurers and ceding companies A52160 Increase in Other Payables A52200 Decrease in employees’ benefit liability A52990 Increase 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 B09900 Decrease in advance receipts BBBB Net cash inflow (outflow) 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		2020 $ 12,157 ) ( 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	2019
	( ( ( ( ( ( ( ( ( ( ( ( ( (		$ 130,620 ) 92,559 9,575 ) 4,202 1,674 ) 5,856 53,377 4,782 ) 2,521 476,804 109,305 132,982 134,307 ) 584,784 8,728 ) 8,595 4,482 ) 1,353 ) - 36,477 ) 42,445 ) 3,746 ) 34,860 ) 325,981 ) 364,587 ) 177,752 3,237,541 $ 3,415,293

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

Chairman: Steve Lee

Chief Accountant: Pi-Chen Wang

President: Chao-Feng Chen

156 -

Taiwan Fire & Marine Insurance Co., Ltd.

Notes to Financial Statement

From January 1 to December 31 of 2020 and 2019

(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, 2020, 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 26, 2021.

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.
157 -
(II) IFRSs recognized by the Financial Supervisory Commission (hereinafter referred to

as the “FSC”) applicable in 2021

as the “FSC”) applicable in 2021
Newly Issued/ Amended/ Revised Standards and Interpretations Amendments to IFRS 4, “Deferral of Effective Date of IFRS 9” “Interest Rate Benchmark Reform - Phase 2”, amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16	The effective date promulgated byIASB
	Effective from the date of promulgation Effective during the annual reporting period as of January 1, 2021.

(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 issued

to be effective by FSC

Newly Issued/ Amended/ Revised Standards and
Interpretations
“Annual Improvement for the Period of 2018-2020”
Amendments to IFRS 3, “The changes in Reference
to the Conceptual Framework”
“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 IAS 1, “Classification of Liabilities
as Current or Non-Current”
Amendments to IAS 16, “Property, Plant and
Equipment: Proceeds before Intended Use”
Amendments to IAS 37, “Onerous Contracts - Cost
of Fulfilling a Contract”
Amendments to IAS 1, “Disclosure of Accounting
Polices”
Amendments to IAS 8, “Definition of Accounting
Estimates”

The effective date
promulgated by IASB
(Note 1)

January 1, 2022 (Note 2)
January 1, 2022 (Note 3)
To be determined
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2022 (Note 4)
January 1, 2022 (Note 5)
January 1, 2023 (Note 6)
January 1, 2023 (Note 7)

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 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
158 -

“First-time Adoption of International Financial Reporting Standards (IFRSs)” are applicable retroactively during the annual reporting period as of January 1, 2022.

Note 3: The amendments are applicable to the merges of enterprises whose annual reporting periods commence as of January 1, 2022.
Note 4: 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 5: The amendments are applicable to the contracts which have not yet fulfilled all obligations therein by January 1, 2022.
Note 6: The annual reporting period beginning after January 1, 2023 is prospectively applicable to this amendment.
Note 7: The changes in accounting estimates and accounting policies arising during the annual period beginning after January 1, 2023 are retrospectively applicable to this amendment.

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 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:

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

159 -

Recognition

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

The beginning of the coverage period of the group of contracts;
The date when the first payment from a policyholder in the group becomes due; and
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.

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.

160 -

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:

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
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:

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,

161 -

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.

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.

162 -

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:

Level 1 inputs: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
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).
Level 3 inputs: Unobservable inputs for the asset or liability.
(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 non-current 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

163 -

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.

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.

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.

(VI)

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.

164 -

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 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 straight-line 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

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

165 -

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.

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, 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, right-of-use assets, 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 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 book amount of the units that yielded cash was adjusted upward to the post-amendment recoverable amount. The book amount after increase, nevertheless, should not exceed such assets or the book 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.

166 -

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.

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.

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:

167 -
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.

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

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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 Non-performing/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 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 value 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 value.

(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

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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.

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.

Financial liabilities
(1) Subsequent measuring

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

(2) Derecognition of financial liabilities

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

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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 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 on Provision of Various Reserves for Insurance Enterprises”, “Regulations Governing Various Reserves of 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 “Notes to Enhancing the Reserves for Disaster Insurance Provided by Non-Life Insurance Enterprises (Commercial Earthquake

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Insurance and Typhoon and Flood Insurance)”, 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:

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.

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

Special reserves

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.

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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 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

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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 eight 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.

(3) Special reserves for other special needs

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

The special reserves for nuclear energy insurance are based on the “Directions for Reserving Nuclear Energy Insurance Reserve 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

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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.

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.

Liability adequacy reserves

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.

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.

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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 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.

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

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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.

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 book value 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

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adjustment of the right-of-use assets. The lease liabilities are individually expressed in the balance sheets.

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

(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.

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.

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.

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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.

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 book 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 book 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 book 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 book amounts of the assets and liabilities anticipated to be recovered or reimbursed as of the balance sheet date.

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.”

The unearned premium reserves for nuclear energy insurance are provided based on the “Directions for Reserving Nuclear Energy Insurance Reserve by

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Non-Life Insurance Enterprises Directions for Reserving Nuclear Energy Insurance Reserve 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 Governing Various Reserves of 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
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.

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

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the competent authorities to operate residential fire insurance business, after the application to join Taiwan Residential Earthquake Insurance Fund (“Residential 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 co-insurance 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

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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.

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 31,2020 $ 31,015 2,352,720 1,048,190 340,190 ( 87,585 ) $ 3,684,530	December 31,2019
		$ 31,273 2,560,944 648,898 258,590 ( 84,412 ) $ 3,415,293

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 Receivables Notes receivable Notes receivable - Non-accrual loan Less: allowance loss Premiums receivable Premiums receivable - Non-accrual loan Less: allowance loss	December 31,2020 0.06% ~ 0.41% 0.18% ~ 0.23% December 31,2020 $ 97,079 - ( 971 ) $ 96,108 $ 469,941 25,653 ( 10,231 ) $ 485,363	December 31,2019
		0.09% ~ 0.66% 0.52% ~ 0.56% December 31,2019
	( (	( (	$ 121,835 173 1,391 ) $ 120,617 $ 374,954 34,775 9,973 ) $ 399,756

VII. Receivables

(To be continued)

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(Continued)

Interest receivable Other receivable Other receivable - Non-accrual loan Less: allowance loss Other receivables	December 31,2020 $ 58,323 13,133 19,366 ( 6,833 ) $ 83,989	December 31,2019	December 31,2019
	(	(	$ 54,961 34,965 3,519 871 ) $ 92,574

(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 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.

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December 31, 2020
12-month expected credit loss I Balance - beginning $ 3,195 Add: Provision (reversal) in the period ( 2,342 ) Balance - ending $ 853 December 31, 2019	Lifetime expected credit loss II $ 2,735 ( 1,521 ) $ 1,214	Lifetime expected credit loss III $ 825 ( 305 ) $ 520	Impairment provided based in IFRS 9 $ 6,755 ( 4,168 ) $ 2,587	Impairment based on the “Regulations Governing the Procedures for Insurance Enterprises to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans” $ 5,480 9,968 $ 15,448		Total
	(	(	(			$ 12,235 5,800 $ 18,035

Balance - beginning Add: Provision (reversal) in the period Balance - ending	12-month expected credit loss I $ 2,396 799 $ 3,195	Lifetime expected credit loss II $ 9,119 ( 6,384 ) $ 2,735	Lifetime expected credit loss III $ 2,153 ( 1,328 ) $ 825	Impairment provided based in IFRS 9 $ 13,668 ( 6,913 ) $ 6,755	Impairment based on the “Regulations Governing the Procedures for Insurance Enterprises to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans” $ 10,956 ( 5,476 ) $ 5,480		Total
		(	(	(	(	(	$ 24,624 12,389 ) $ 12,235

The allowance loss as of December 31, 2020 and 2019 increased by NT$5,800 thousand and decreased by NT$12,389 thousand, respectively, mainly as a result of the net increase of NT$6,552 thousand and net decrease of NT$34,645 thousand to the gross carrying value 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$6,215 thousand, and NT$6,693 thousand, respectively, as of December 31, 2020.

For the notes receivable, premium receivable, and non-accrual loans in other receivables, the allowances have been provided as NT$173 thousand, NT$6,077 thousand, and NT$723 thousand, respectively, as of December 31, 2019.

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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 31,2020 $ 639,660 19,574 7,283 7,717 9,261 $ 683,495	December 31,2019
		$ 489,692 97,206 31,894 5,565 825 $ 625,182

The aging analysis is conducted based on the accounted dates.

Financial instruments measured at fair values through profit and/or	loss December 31,2019	loss December 31,2019
December 31,2020 Held for transaction purposes - TSEC/GTSM listed shares $ 204,920 - Beneficiary certificates of funds 156,780 Compulsory measurement at fair value through profit and loss - Domestic financial bonds 1,054,592 - Domestic corporate bonds 522,397 $ 1,938,689 Financial assets at fair value through other comprehensive income December 31,2020 Equity instruments at fair value through other comprehensive income $ 3,668,717 Bond instruments measured at fair value through other comprehensive income 1,612,245 Deductible of refundable deposits ( 622,187 ) $ 4,658,775 Investments in equity instruments December 31,2020 Domestic investment TWSE/TPEx-listed shares and emerging shares $ 3,310,661 Unlisted Shares 358,056 $ 3,668,717
	$ 255,708 101,131 886,425 522,088 $ 1,765,352 December 31,2019
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
	$ 3,229,435 1,775,766 ( 615,788 ) $ 4,389,413 December 31,2019
		$ 2,863,573 365,862 $ 3,229,435

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

In 2020 and 2019, the Company adjusted the investment positions to diversify risks, and the sold part of common shares at fair value for NT$91,815 thousand and NT$19,959 thousand; the related other equity - unrealized gains and losses on financial assets at fair value through profit or loss, NT$10,609 thousand and NT$2,432 thousand have been transferred to the retained earnings.

The Company recognized the dividend revenues, NT$139,225 thousand and NT$120,057 thousand, respectively, in 2020 and 2019, including the amounts related to investments derecognized at the end of the period, NT$0 thousand and NT$1,024 thousand. The amounts related to the holders were NT$139,225 thousand and NT$119,033 thousand on December 31, 2020 and 2019.

(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 31,2020 $ 622,187 49,998 104,110 ( 622,187 ) 154,108 142,258 693,692 835,950 $ 990,058	December 31,2019
	(	(	$ 615,788 150,240 104,697 615,788 ) 254,937 150,000 755,041 905,041 $ 1,159,978

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, 2020

December 31, 2020
Total of Carrying Amount Allowance loss Amortized cost Adjustment to fair value Deductible of refundable deposits December 31, 2019	At fair value through other comprehensive income
	( (	$ 1,517,360 884 ) 1,516,476 95,769 1,612,245 622,187 ) $ 990,058

December 31, 2019
Total of Carrying Amount Allowance loss Amortized cost Adjustment to fair value Deductible of refundable deposits	At fair value through other comprehensive income
	( (	$ 1,716,298 1,262 ) 1,715,036 60,730 1,775,766 615,788 ) $ 1,159,978

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.

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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:

Creditrating 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 book values of the debt instrument investments of each credit rating, and the applicable ECL rates are as the following:

December 31, 2020

December 31, 2020
Creditrating Normal Abnormal Default Write Off	Expected CreditLoss (ECL) 0.002% ~ 0.519% (note) (note) (note)	December 31, 2020 Total of Carrying Amount
		$ 1,517,360 - - -

December 31, 2019

		December 31, 2019
Creditrating Normal Abnormal Default Write Off	Expected CreditLoss (ECL) 0.00% ~ 1.04% (note) (note) (note)	Total of Carrying Amount
		$ 1,716,298 - - -

(Note): The credit level of the bond investments as of December 31, 2020 and 2019 were all normal and thus not applicable.

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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:

	the following:
XI.	Creditrating 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, 2020 $ 1,262 $ - $ - Purchase of New Liability Instruments 15 - - Derecognition ( 145 ) - - Exchange rate and other movement ( 248 ) - - Allowance loss on December 31, 2020 $ 884 $ - $ - Balance at January 1, 2019 $ 927 $ - $ - Purchase of New Liability Instruments 428 - - Derecognition ( 137 ) - - Exchange rate and other movement 44 - - Allowance loss on December 31, 2019 $ 1,262 $ - $ - Investment under equity method December 31,2020 December 31,2019 Investments in associates $ 242,485 $ 217,939 Summarization About Associates With Immateriality Information Percentage of the shareholding and voting rights Company Name December 31,2020 December 31,2019 Top Taiwan X Venture Capital Co., Ltd. 24.75% 24.75%		Creditrating
					Default (Lifetime expected credit loss exists and the credit is impaired)
	Company Name Top Taiwan X Venture Capital Co., Ltd.
		December 31,2020 24.75%		December 31,2019
				24.75%

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Shares Vested in the Company Net profit for the period from continuing operations Other comprehensive income Total comprehensive income		2020 $ 25,596 - $ 25,596		2019
				$ 41,438 - $ 41,438

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 31,2020 $ 2,987,652 ( 18,145 ) $ 2,969,507	December 31,2019
	(	(	$ 2,985,195 30,645 ) $ 2,954,550

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

	follows:
XIII.	Time deposits Investment Properties Investment Properties Completed Right-of-use assets	December 31,2020 0.06% ~ 2.70% December 31,2020 $ 2,265,866 20,891 $ 2,286,757	December 31,2019
			0.12% ~ 2.85% December 31,2019
				$ 2,387,102 26,876 $ 2,413,978

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					House and	Right-of-use	Right-of-use
			Land		building		assets			Total
Cost
Balance at January 1,
2019		$	2,110,928	$	507,735	$	-		$	2,618,663
Increase			-		1,353		-			1,353
Transferred from
right-of-use assets			-		-		32,861			32,861
Transferred from property
and equipment			9,802		529		-			10,331
Balance at December 31,
2019		$	2,120,730	$	509,617	$	32,861		$	2,663,208
Accumulated
Depreciation
Balance at January 1,
2019		$	-	$	228,987	$	-		$	228,987
Depreciation expense			-		13,750		2,992			16,742
Transferred from
right-of-use assets			-		-		2,993			2,993
Transferred from property
and equipment			-		508		-			508
Balance at December 31,
2019		$	-	$	243,245	$	5,985		$	249,230
Net at December 31,
2019		$	2,120,730	$	266,372	$	26,876		$	2,413,978
					House and	Right-of-use
			Land		building		assets			Total
Cost
Balance at January 1,
2020		$	2,120,730	$	509,617	$	32,861		$	2,663,208
Increase			-		424		-			424
Disposition	(		59,080 ) (		54,289 )		-	(		113,369 )
Transferred to Property
and equipment	(		28,735 ) (		10,599 )		-	(		39,334 )
Transferred from property
and equipment			28,735		10,599		-			39,334
Balance at December 31,
2020		$	2,061,650	$	455,752	$	32,861		$	2,550,263
Accumulated
Depreciation
Balance at January 1,
2020		$	-	$	243,245	$	5,985		$	249,230
Depreciation expense			-		13,470		5,985			19,455
Disposition			- (		5,236 )		-	(		5,236 )
Transferred to Property
and equipment			- (		6,886 )		-	(		6,886 )
Transferred from property
and equipment			-		6,943		-			6,943
Balance at December 31,
2020		$	-	$	251,536	$	11,970		$	263,506
Net at December 31,
2020		$	2,061,650	$	204,216	$	20,891		$	2,286,757

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

House and building 55-60 years Right-of-use assets 5-15 years

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, 2020 and 2019 was appraised by the independent appraisers, Affluence Real Estate Appraiser Firm and Y.C.R.E., based on the inputs for Level 3 fair value measurement on the balance sheet date. The appraisal was 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:

follows:
Fair Value Discount rate	December 31,2020 $ 4,586,157 0.82%~5.00%	December 31,2019
		$ 4,597,915 0.83%~6.00%

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 one small section, 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

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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, 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.

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:

1styear 2ndyear 3rdyear 4thyear 5thyear More than 5 years	December 31,2020 $ 109,829 87,388 56,701 42,640 10,460 2,659 $ 309,677	December 31,2019	December 31,2019
			$ 111,209 95,946 73,142 43,170 32,626 9,624 $ 365,717

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XIV. Property and equipment

Cost Balance at January 1, 2019 Increase Disposition Transferred to Investment Properties Balance at December 31, 2019 Accumulated Depreciation Balance at January 1, 2019 Depreciation expense Disposition Transferred to Investment Properties Balance at December 31, 2019 Net at December 31, 2019 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
	( (	$ 271,576 - - 9,802 ) $ 261,774 $ - - - - $ - $ 261,774 $ 261,774 - - 28,735 28,735 ) $ 261,774 $ - - - - - $ - $ 261,774	( ( ( (	$ 165,259 - - 529 ) $ 164,730 $ 91,127 3,437 - 508 ) $ 94,056 $ 70,674 $ 164,730 2,212 - 10,599 10,599 ) $ 166,942 $ 94,056 3,355 - 6,886 6,943 ) $ 97,354 $ 69,588	( ( ( (	$ 30,005 4,100 3,417 ) - $ 30,688 $ 13,087 6,068 3,417 ) - $ 15,738 $ 14,950 $ 30,688 6,320 7,134 ) - - $ 29,874 $ 15,738 6,177 6,977 ) - - $ 14,938 $ 14,936	$ 9,044 116 ( 211 ) - $ 8,949 $ 4,355 1,163 ( 211 ) - $ 5,307 $ 3,642 $ 8,949 143 ( 555 ) - - $ 8,537 $ 5,307 1,139 ( 555 ) - - $ 5,891 $ 2,646	$ 11,929 1,017 ( 2,107 ) - $ 10,839 $ 6,393 1,856 ( 2,107 ) - $ 6,142 $ 4,697 $ 10,839 1,119 ( 2,988 ) - - $ 8,970 $ 6,142 1,546 ( 2,988 ) - - $ 4,700 $ 4,270	( (	$ 7,394 3,495 - - $ 10,889 $ 3,760 2,477 - - $ 6,237 $ 4,652 $ 10,889 929 4,092 ) - - $ 7,726 $ 6,237 2,389 4,092 ) - - $ 4,534 $ 3,192	$ 495,207 8,728 ( 5,735 ) ( 10,331 ) $ 487,869 $ 118,722 15,001 ( 5,735 ) ( 508 ) $ 127,480 $ 360,389 $ 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

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

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

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XV. Lease Agreement

(I) Right-of-use assets

Right-of-use assets
Cost Balance at January 1, 2019 Effects of retrospective application of IFRS 16 Balance at January 1, 2019 (after restatement) Increase Decrease in the period Transferred to Investment Properties Balance at December 31, 2019 Accumulated depreciation and impairment Balance at January 1, 2019 Effects of retrospective application of IFRS 16 Balance at January 1, 2019 (after restatement) Depreciation expense Decrease in the period Transferred to Investment Properties Balance at December 31, 2019 Net at December 31, 2019 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		Land $ - 32,861 32,861 - - 32,861 ) $ - $ - - - 2,993 - 2,993 ) $ - $ - $ - - - $ - $ - - - $ - $ -		Building $ - 36,144 36,144 16,998 2,380 ) - $ 50,762 $ - - - 22,287 1,737 ) - $ 20,550 $ 30,212 $ 50,762 34,850 15,792 ) $ 69,820 $ 20,550 22,206 15,585 ) $ 27,171 $ 42,649	Transport equipment $ - 8,074 8,074 - - - $ 8,074 $ - - - 4,154 - - $ 4,154 $ 3,920 $ 8,074 1,983 ( 3,005 ) $ 7,052 $ 4,154 2,587 ( 2,791 ) $ 3,950 $ 3,102		Total
	( (		( ( ( (		( (	$ - 77,079 77,079 16,998 ( 2,380 ) ( 32,861 ) $ 58,836 $ - - - 29,434 ( 1,737 ) ( 2,993 ) $ 24,704 $ 34,132 $ 58,836 36,833 ( 18,797 ) $ 76,872 $ 24,704 24,793 ( 18,376 ) $ 31,121 $ 45,751

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

Lease liabilities
Face values of lease liabilities Interest expense of lease liabilities	December 31,2020 $ 71,498 December 31,2020 $ 1,661	December 31,2019
		$ 66,645 December 31,2019
			$ 2,020

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Discount rates for the lease liabilities are as the following:

Land Building Transport equipment	December 31,2020 2.616% 2.366%~2.616% 2.366%~2.616%	December 31,2019
		2.616% 2.616% 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.

(IV) Other information of Leases

Other information of Leases
Short-term lease expenses Low-valued asset lease expenses Total amount of cash (outflow) of lease Refundable deposit Refundable deposit Bond of Insurance Enterprises Bond of Litigation Others	December 31,2020 $ 132 $ 123 ($ 33,188 ) December 31,2020 $ 622,187 18,377 87,353 $ 727,917	December 31,2019
		$ 118 $ 13 ($ 34,860 ) December 31,2019
			$ 615,788 3,337 111,720 $ 730,845

XVI. Refundable deposit

(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 paid-in 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, 2020 and 2019.

December 31, 2020 and 2019.
Other financial assets - Time deposits Cash and cash equivalents	December 31,2020 $ 18,145 87,585 $ 105,730	December 31,2019
			$ 30,645 84,412 $ 115,057

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XVII. Reserve for liabilities

December 31, 2020 December 31, 2019 Net defined benefit liability $ 82,378 $ 84,127

(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.

(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:

plans were as follows:
Present value of defined benefit obligation Fair value of plan asset Net defined benefit liability	December 31,2020 $ 140,575 ( 58,197 ) $ 82,378	December 31,2019
	(	(	$ 141,437 57,310 ) $ 84,127

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Movement of the net defined benefit liability are as following:

January 1, 2019 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, 2019 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 $ 135,551 1,504 1,519 3,023 - 807 5,603 ( 593 ) 5,817 - ( 2,954 ) 141,437 1,548 1,053 2,601 - 751 116 ( 250 ) 617 - ( 4,080 ) $ 140,575	Fair value of planasset ($ 50,703 ) - ( 581 ) ( 581 ) ( 1,756 ) - - - ( 1,756 ) ( 7,224 ) 2,954 ( 57,310 ) - ( 432 ) ( 432 ) ( 1,831 ) - - - ( 1,831 ) ( 2,704 ) 4,080 ($ 58,197 )	Net defined benefit liability (asset)
	( ( ( (		$ 84,848 1,504 938 2,442 ( 1,756 ) 807 5,603 ( 593 ) 4,061 ( 7,224 ) - 84,127 1,548 621 2,169 ( 1,831 ) 751 116 ( 250 ) ( 1,214 ) ( 2,704 ) - $ 82,378

200 -

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

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.
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.
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 31,2020 0.50% 2.00%	December 31,2019
		0.75% 2.25%

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 31,2020 ($ 3,543 ) $ 3,682 $ 3,565 ($ 3,450 )	December 31,2019	December 31,2019
	( (	( (	$ 3,777 ) $ 3,929 $ 3,807 $ 3,680 )

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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.

December 31,2020 Amount expected to be provided within 1 year $ 2,688 Average maturity for the defined benefit obligation 10.1 Years Reinsurance contract asset and Insurance liabilities December 31,2020 Less benefits & claims recovered from reinsurers $ 21,187 Less: allowance loss ( 106 ) $ 21,081 Due from reinsurers and ceding companies $ 174,240 Due from reinsurers and ceding companies - Non-accrual loan 11,734 Less: allowance loss ( 14,958 ) $ 171,016 Reinsurance reserve asset - net Ceding unearned premium reserves $ 802,184 Ceding claims reserves 925,404 Less: Accumulated impairment ( 314 ) $ 1,727,274 Insurance liabilities Unearned premium reserves $ 3,447,801 Claim reserves 2,894,345 Special reserves 2,118,699 Premium deficiency reserves 7,588 $ 8,468,433	December 31,2020 Amount expected to be provided within 1 year $ 2,688 Average maturity for the defined benefit obligation 10.1 Years Reinsurance contract asset and Insurance liabilities December 31,2020 Less benefits & claims recovered from reinsurers $ 21,187 Less: allowance loss ( 106 ) $ 21,081 Due from reinsurers and ceding companies $ 174,240 Due from reinsurers and ceding companies - Non-accrual loan 11,734 Less: allowance loss ( 14,958 ) $ 171,016 Reinsurance reserve asset - net Ceding unearned premium reserves $ 802,184 Ceding claims reserves 925,404 Less: Accumulated impairment ( 314 ) $ 1,727,274 Insurance liabilities Unearned premium reserves $ 3,447,801 Claim reserves 2,894,345 Special reserves 2,118,699 Premium deficiency reserves 7,588 $ 8,468,433	December 31,2019	December 31,2019
		$ 2,676 10.8 Years December 31,2019
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
	( ( (	( ( (	$ 32,778 164 ) $ 32,614 $ 105,796 9,009 11,732 ) $ 103,073 $ 751,510 1,036,813 4,287 ) $ 1,784,036 $ 3,215,885 2,888,112 2,141,949 7,154 $ 8,253,100

XVIII. Reinsurance contract asset and Insurance liabilities

(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

202 -

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 non-accrued 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, 2019 Less: Reversal in the current year Balance at December 31, 2019 Balance at January 1, 2020 Add: Provision (reversal) in the current year Balance at December 31, 2020		Impairment loss by individual assessment $ 16,181 8,253 ) $ 7,928 $ 7,928 3,283 $ 11,211	Impairment loss by group assessment $ 14,827 ( 10,859 ) $ 3,968 $ 3,968 ( 115 ) $ 3,853		Total
	(		( (	(	$ 31,008 19,112 ) $ 11,896 $ 11,896 3,168 $ 15,064

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

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

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.

As of December 31, 2019, 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$7,928 thousand.

(V) Reinsurance reserve asset and Insurance liabilities

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 January 1, 2020 $ 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 the Period $ 760,057 - 760,057 557,847 367,557 - 925,404 $ 1,685,461 Provision of the Period $ 3,351,289 1,858,918 1,035,427 2,894,345 - - 8,803 8,803 7,588 $ 6,262,025		Recovery of the Period $ 709,383 - 709,383 667,090 369,723 - 1,036,813 $ 1,746,196 Recovery of the Period $ 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 Others $ - - - - - - - - - $ -	December 31, 2020	December 31, 2020
	(								$ 802,184 - 802,184 557,847 367,557 ( 314 ) 925,090 $ 1,727,274 December 31, 2020
										$ 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

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Movement of increase/decrease for reinsurance reserve assets and insurance liabilities during 2019:

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, 2019 $ 731,042 - 731,042 562,855 390,112 4,533 ) 948,434 $ 1,679,476 $ 3,045,561 1,779,386 1,075,806 2,855,192 194,190 805,099 1,188,936 2,188,225 8,660 $ 8,097,638		Provision of the Period $ 730,307 - 730,307 667,090 369,723 - 1,036,813 $ 1,767,120 $ 3,155,772 1,848,738 1,039,374 2,888,112 - - - - 7,154 $ 6,051,038		Recovery of the Period $ 709,839 - 709,839 562,855 390,112 - 952,967 $ 1662,806 $ 2,985,448 1,779,386 1,075,806 2,855,192 8,091 8,551 29,634 46,276 8,660 $ 5,895,576		Others $ - - - - - 246 246 $ 246 $ - - - - - - - - - $ -	December 31, 2019	December 31, 2019
	(								(	$ 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

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.

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

insurance are listed as	follows:
Amount applied Amount not applied Effects	Net Profit for the Period $ 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 )

In 2019, 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:

insurance are listed as	follows:
Amount applied Amount not applied Effects	Net Profit for the Period $ 703,129 689,815 $ 13,314	Earnings Per Share(EPS) $ 1.94 1.90 $ 0.04		Total Liabilities $ 9,799,041 8,586,089 $ 1,212,952		Equity
					(	$ 9,087,874 10,134,940 $ 1,047,066 )

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XIX. Equity

(I) (II)	Capital 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 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 31,2020 600,000 $ 6,000,000 362,200 $ 3,622,004 December 31,2020 $ 1,915 97,047 $ 98,962	December 31,2019	December 31,2019
			600,000 $ 6,000,000 362,200 $ 3,622,004 December 31,2019
				$ 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

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Board of Directors attended by two-thirds 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 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 on Provision of Various Reserves for 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, 2020 and 2019, the net provision was NT$ 172,097 thousand and NT$ 198,646 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.

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

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.
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.
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.
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) .
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.
Healthy financial business with solvency.
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 has held the general meeting on June 12, 2020 and June 14, 2019, and resolved to pass the distribution of the earnings for 2019 and 2018, respectively, as the following:

as the following:
Legal reserve Special reserve Cash dividend	Dispositionof net earnings 2019 2018 $ 139,252 $ 112,060 197,621 184,465 362,201 325,981	DividendsPerShare ($)
	2019 $ 139,252 197,621 362,201	2019 $ 1.0	2018
			$ 0.9

The motion for 2020 allocation of earnings drafted by the Board of Directors on March 26, 2021 is stated as following:

Legal reserve Special reserve Cash dividend	Disposition of net earnings $ 142,688 170,425 398,421	Dividends Per Share($)
		$ 1.1

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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 18, 2021.

(IV) Special reserve

The movement of special reserve of 2020 and 2019 are as follows:

2019 Balance - beginning of year Accounted of the year Recovery of the year Balance - end of year 2020 Balance - beginning of year Accounted of the year Recovery of the year Balance - end of year	Special reserves $ 1,536,861 224,794 ( 26,148 ) $ 1,735,507 $ 1,735,507 238,213 ( 66,116 ) $ 1,907,604		Provisions by initial application of IFRSs $ 671,714 - - $ 671,714 $ 671,714 - 14,267 ) $ 657,447	Special reserve form fin-tech employee transformation $ 6,554 2,801 ( 1,025 ) ( $ 8,330 $ 8,330 - ( 1,672 ) ( $ 6,658	Total
	( (	(		( (	$ 2,215,129 227,595 27,173 ) $ 2,415,551 $ 2,415,551 238,213 82,055 ) $ 2,571,709

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$41,063 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

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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 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.

(V)

Other equity

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

other comprehensive income
Balance - beginning of year Those yielded in the current term Unrealized profit/loss Liability instruments Equity instrument Adjustment to the allowance loss of bond instrument Other comprehensive profit (loss) for the period The accumulated profit/loss by disposing equity instrument transferred to the retained earnings Balance - end of year		2020 $ 46,941 ) 35,416 131,256 378 ) 166,294 10,609 ) $ 108,744		2019
	( ( (		( ( (	$ 345,480 ) 20,947 279,689 335 300,971 2,432 ) $ 46,941 )

XX. Net Income from continuing operation

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

Gain on disposal Dividend Evaluated benefits Equity instrument Liability instruments		2020 $ 9,780 10,255 35,949 8,476 $ 64,460	2019
			$ 64,929 11,777 ( 15,437 ) 4,503 $ 65,772

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

comprehensive income
Dividend Gain and loss from the disposal		2020 $ 139,225 4,054 $ 143,279		2019
				$ 120,057 - $ 120,057

(III) Investment Property profit (or loss)

Investment Property profit (or loss)
Rental revenue from investment properties Gain/Loss of disposal of investment properties Direct operational expenses of investment properties		2020 $ 110,165 32,206 33,516 ) $ 108,855	2019
	(		$ 141,922 - ( 34,772 ) $ 107,150

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

2020 Bond instruments measured at fair value through other comprehensive income $ 378 Gain (loss) of Foreign Currency Exchange 2020 Gain (loss) of investment exchange ( $ 35,052 ) Other gain (loss) of exchange ( 12,350 ) ($ 47,402 )		2019
	(	$ 335 ) 2019
	( $ 25,856 ) ( 3,160 ) ($ 29,016 )

(V) Gain (loss) of Foreign Currency Exchange
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(VI) Summary of nature of employee benefits, depreciatio and amortization for the period

		2020			2019
	Classified as operating cost	Classified as operating expense	Total	Classified as operating cost	Classified as operating expense	Total
Employee fringe benefit expenses	$ 247,596	$ 758,966	$ 1,006,562	$ 250,760	$ 743,856	$ 994,616
Salaries expense	247,596	616,790	864,386	250,760	601,971	852,731
Expenses for labor and health insurance	-	59,885	59,885	-	59,291	59,291
Pension expense	-	29,955	29,955	-	29,697	29,697
Remuneration to directors	-	36,725	36,725	-	35,164	35,164
Other employee fringe benefit expenses	-	15,611	15,611	-	17,733	17,733
Depreciation expense - Property and equipment	-	14,606	14,606	-	15,001	15,001
Depreciation expense - Investment properties	19,455	-	19,455	19,735	-	19,735
Depreciation expense - Right-of-use assets	-	24,793	24,793	-	26,441	26,441
Amortization expenses	-	3,226	3,226	-	2,438	2,438

Note 1: The amount of employees for this year and the previous year is 899 and 904,
respectively; among them, 9 directors do not concur as employees.
Note 2: The average employee benefit expenses for the year and the previous year were NT$1,090 thousand and NT$1,072 thousand.
Note 3: The average employee salary expenses for the year and the previous year were NT$971 thousand and NT$953 thousand.
Note 4: The average employee salary expense adjusted by 1.89%.
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 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
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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 2020 and 2019 are respectively resolved by the Board of Directors on March 26, 2021 and March 20, 2020, as the following:

Percentage of estimation

Percentage of estimation
Employee Compensation Directors’ remuneration	2020 2.50% 2.50%	2019
		2.50% 2.50%

Amount

Amount
Employee Compensation Directors’ remuneration		2020 $ 20,340 $ 20,340		2019
				$ 21,939 $ 21,939

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.

The estimated employees’ compensation and directors’ remuneration for 2019 and 2018 are respectively resolved by the Board of Directors on March 20, 2020 and March 22, 2019, as the following:

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Employee Compensation Directors’ remuneration		2020 Cash $ 21,939 $ 21,939	2019
			Cash
			$ 17,721 $ 17,721

The actual resolved amounts for the employees’ compensation and directors’ remuneration for 2019 and 2018 are not different from the amounts recognized in the financial statement of 2019 and 2018.

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		2020 $ 106,899 - 6,511 ) 100,388 15,044 ) $ 85,344		2019
	( (			$ 127,748 618 379 128,745 1,778 $ 130,523

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

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		2020			2019
Net Income before income tax
from continuing operation		$ 772,939			$ 833,652
The income tax expense for the
pre-tax net profit is
calculated based on the
mandatory tax rates		$ 154,588			$ 166,730
Loss in expense which could
not be reduced from tax	(	7,094	)		6,084
Exempted from income tax	(	48,216	)	(	43,365 )
Additional business profit tax
levied on unappropriated
retained earnings		-			618
Temporary difference not
recognized.	(	7,423	)		77
Adjustment from utilizing the
current income tax expense
of the previous year to the
year.	(	6,511	)		379
The income tax expenses
recognized in profit and/or
loss		$ 85,344			$ 130,523

According to the decree under Tai-Cai-Shui-Zi No. 10904558730, the Company stated the net increase in retained earnings at the beginning of 2018 resulting from retroactive adjustment upon the first-time application of IFRS 9, in the stock dividends or earnings allocated in 2020, as a deduction item for undistributed earnings for 2018.

(II) Income tax recognized under other comprehensive income

		2020	2020	2019	2019
Deferred income tax
Incurred in the year
- Remeasurement of
defined benefit plans	$		243	($	812	)
Income tax liabilities of the period
	December31,2020			December31,2019
Income tax liabilities of the
period
Income tax payable	$	38,823		$ 64,964

(III) Income tax liabilities of the period

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(IV) Deferred income tax assets and liabilities

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

2020

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 2019 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 $ 3,488 4,535 12,290 9,009 $ 29,322 $ 274,092 Balance - beginning of year $ 9,414 5,491 11,478 3,905 $ 30,288 $ 274,092		Recognized into profit and/or loss $ 1,533 107 ) - 6,195 $ 7,621 $ 7,423 ) Recognized into profit and/or loss $ 5,926 ) 956 ) - 5,104 $ 1,778 ) $ -	Recognized under other comprehensive income $ - - ( 243 ) - ($ 243 ) $ - Recognized under other comprehensive income $ - - 812 - $ 812 $ -	Balance - end ofyear
		( (			$ 5,021 4,428 12,047 15,204 $ 36,700 $ 266,669 Balance - end ofyear
		( ( (				$ 3,488 4,535 12,290 9,009 $ 29,322 $ 274,092

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(V) Verification of income tax

The Company’s profit-seeking enterprise income tax returns through 2018 have

been examined and approved by the tax authority.

XXII. Earnings Per Share (EPS)

Earnings Per Share (EPS)
Basic EPS Diluted EPS		2020 $ 1.90 $ 1.89		2019
				$ 1.94 $ 1.93

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 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)	2020 $ 687,595 $ 687,595 Unit: 2020 362,200 1,265 363,465	2019 $ 703,129 $ 703,129 thousand shares 2019 362,200 1,244 363,444

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’

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compensation in the next year, the diluting effects of such potential common shares are taken into account still.

XXIII. Capital risk management

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.

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XXIV. Financial instruments

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

Level of fair value
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 financial bonds - Domestic corporate bonds - Overseas corporate bonds - Overseas financial bonds Total		Level 1 $ 204,920 156,780 - - $ 361,700 $3,310,661 - - - - - $3,310,661	Level 2 $ - - - - $ - $ - - 49,998 104,110 693,692 - $ 847,800	Level3 $ - - 1,054,592 522,397 $1,576,989 $ - 358,056 - - - 142,258 $ 500,314		Total
						$ 204,920 156,780 1,054,592 522,397 $1,938,689 $3,310,661 358,056 49,998 104,110 693,692 142,258 $4,658,775

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December 31, 2019

December 31, 2019
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 - TSEC/GTSM listed shares - Unlisted domestic shares Investments in liability instruments - Domestic financial bonds - Domestic corporate bonds - Overseas corporate bonds - Overseas financial bonds Total		Level 1 $ 255,708 101,131 - 10,385 $ 367,224 $2,863,573 - - - - - $2,863,573		Level 2 $ - - - - $ - $ - - 150,240 104,697 755,041 - $1,009,978		Level3 $ - - 886,425 511,703 $1,398,128 $ - 365,862 - - - 150,000 $ 515,862	Total
							$ 255,708 101,131 886,425 522,088 $1,765,352 $2,863,573 365,862 150,240 104,697 755,041 150,000 $4,389,413

There was no transfer between fair value measurement level 1 and level 2 in 2020 and 2019.

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Reconciliation for the financial instruments measured at fair value level 3

2020

2020
Financial assets Balance - beginning Recognized in Profit/Loss (gain/loss on financial assets and liabilities at fair value through profit or loss) Recognized in profit/loss (exchange profit and/or loss) Recognized in other comprehensive income (unrealized profit/loss at fair value through other comprehensive income) Purchase Disposition Transfer from Level 3 Others Balance - ending Other unrealized gain/loss of the current	Financial assets at fair value through profit or loss Liability instruments $1,398,128 8,861 - - 300,000 - - ( 130,000 ) $1,576,989 $ 8,861	Financial assets at fair value through other comprehensiveincome Liability instruments Equity instrument $ 150,000 $ 365,862 - - ( 7,750 ) - 8 68,839 - 29,280 - ( 52,286 ) - ( 30,652 ) - ( 22,987 ) $ 142,258 $ 358,056 ($ 7,750 )$ -	Total
		Liability instruments $ 150,000 - ( 7,750 ) 8 - - - - $ 142,258 ($ 7,750 )
	(		$1,913,990 8,861 ( 7,750 ) 68,847 329,280 ( 52,286 ) ( 30,652 ) ( 152,987 ) $2,077,303 $ 1,111

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.

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2019

2019
Financialassets Balance - beginning Recognized in Profit/Loss (gain/loss on financial assets and liabilities at fair value through profit or loss) Recognized in profit/loss (exchange profit and/or loss) Recognized in other comprehensive income (unrealized profit/loss at fair value through other comprehensive income) Purchase Disposition Balance - ending Other unrealized gain/loss of the current	Financial assets at fair value through profit or loss Liability instruments $1,244,060 4,068 - - 250,000 ( 100,000 ) $1,398,128 $ 4,068	Financial assets at fair value through other comprehensiveincome Liability instruments Equity instrument Total $ 152,202 $ 451,809 $1,848,071 - - 4,068 ( 3,450 ) - ( 3,450 ) 1,248 ( 85,947) ( 84,699 ) - - 250,000 - - ( 100,000 ) $ 150,000 $ 365,862 $1,913,990 ($ 3,450 )$ - $ 618
		Liability instruments $ 152,202 - ( 3,450 ) 1,248 - - $ 150,000 ($ 3,450 )
	(

The evaluation skills and inputs for Level 2 fair value measurement

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

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The evaluation skills and inputs for Level 3 fair value measurement
Categories of financial instruments Evaluation skills and inputs
TSEC/GTSM listed bond Based on cash flow discount approach, the investments 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.
Investments in unlisted Based on the asset-based approach, reflect the domestic shares 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:

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, 2020 ASSETS Bond investment Stock investment December 31, 2019 ASSETS Bond investment Stock investment	Discount Rate Financial Information of the Investees Liquidity Discount Minority Interest Discount Discount Rate Financial Information of the Investees Liquidity Discount Minority Interest Discount	1.31% ~ 4.01% $17,770 ~ $19,710 10% 10% 1.87% ~ 4.35% $234 ~ $163,086 10% 10%	100 bp change upward 5% change downward 10% change upward 10% change upward 100 bp change upward 5% change downward 10% change upward 10% change upward	$ - - - - $ - - - -	( $ 385,466 ) ( 1,426 ) ( 39,554 ) ( 39,554 ) ( $ 377,292 ) ( 6,566 ) ( 40,651 ) ( 40,651 )

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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

Categories 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)	December31,2020 $ 1,938,689 8,239,511 3,668,717 990,058 1,029,277	December31,2019
		$ 1,765,352 7,849,322 3,229,435 1,159,978 1,019,943

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

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Management Committee 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 non-functional 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 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)	EffectsfromUSD 2020 2019 $ 8,624 $ 8,797	Effectsfrom RMB	Effectsfrom RMB
	2020 $ 8,624	2020 $ 2,411	2019
			$ 2,615

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(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:

==> picture [218 x 12] intentionally omitted <==

Interest rate risk with fair value - Financial assets $ 3,189,233 $ 3,184,279

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 2020 and 2019 will decrease by NT$445,276 thousand and NT$411,196 thousand, respectively, the main reason is the changes from the fair value of the fixed interest rate debt instruments.

(3) Other Price Risks

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$3,617 thousand and NT$3,568 thousand due to the increase/decrease in the fair value of financial assets at fair value through profit or loss from 2020 and 2019. The other

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comprehensive income would have increased/decreased by NT$36,687 thousand and NT$32,294 thousand due to the increase/decrease in the fair value of other financial assets at fair value through comprehensive income from 2020 and 2019.

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, 2020

December 31, 2020
Financialassets	Taiwan	Asia	America	Others	Total
Cash and cash equivalents	$ 3,653,515	$ -	$ -	$ -	$ 3,653,515
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	$ 6,338,908	$ 250,050	$ -	$ 253,791	$ 6,842,749
% by territory	92.64%	3.65%	-	3.71%	100.00%

December 31, 2019

December 31, 2019
Financialassets	Taiwan	Asia	America	Others	Total
Cash and cash equivalents	$ 3,384,021	$ -	$ -	$ -	$ 3,384,021
Financial assets at fair value through profit or loss	1,408,513	-	-	-	1,408,513
Financial assets at fair value through other comprehensive income	1,145,192	316,540	63,806	250,229	1,775,767
Total	$ 5,937,726	$ 316,540	$ 63,806	$ 250,229	$ 6,568,301
% by territory	90.40%	4.82%	0.97%	3.81%	100.00%

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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, 2020

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

December 31, 2019

Liabilities without interest Lease liabilities	On demand or shorter than 3 months $ 766,915 5,849 $ 772,764		3 months - 1year $ 10,551 21,562 $ 32,113		1-5 years $ 22,191 43,135 $ 65,326	More than 5 years	More than 5 years
							$ 5,910 - $ 5,910

(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, 2020 are as follows:

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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$849 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, 2019 are as follows:

31, 2019 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, engineering insurance, and fishing vessel insurance, and cargo reinsurance.

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The ineligible premium expense was NT$8,434 thousand; the ineligible reinsurance reserves was NT$10,401 thousand. The components include ceding unearned premium reserves for NT$4,217 thousand, claim recoverable from reinsurers to the reported and paid claims for NT$688 thousand, and the ceding claims reported but not claimed reserves for NT$5,496 thousand.

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., Ltd. Related party in substance Taiwan Business Bank, Ltd. Related party in substance Goldsun Building Materials Co., Ltd. Related party in substance Bank Taiwan Insurance Brokers Co., Ltd. Related party in substance 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. Taipei Related party in substance 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	December31,2020 $ 638,950 65,498 1,468 $ 705,916	December31,2019	December31,2019
			$ 780,942 77,053 1,465 $ 859,460

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Time deposits (including cash and cash equivalents, and other financial assets listed in accounts):

assets listed in accounts):
Major Management Bank of Taiwan Co., Ltd. Related party in substance Taiwan Business Bank	December31,2020 $ 241,665 137,017 $ 378,682	December31,2019
			$ 263,185 139,961 $ 403,146

The time deposits in the related parties have the interest rate of 0.06% ~ 2.25% and 0.09% ~ 2.55% for December 31, 2020 and 2019, respectively, with same transaction terms as non-related parties.

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. Other related parties		2020 $ 6,719 10,745 1,390 34,052 $ 52,906		2019
				$ 2,350 9,910 1,579 6,387 $ 20,226

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

Claims (direct policy writing)

Claims (direct policy writing)
Major Management Bank of Taiwan Co., Ltd. Other related parties		2020 $ 2,398 5,263 $ 7,661		2019
				$ 7,238 8,163 $ 15,401

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

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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)		2020 $ 2,957 29,518 10,691 $ 43,166		2019
				$ 2,598 27,102 9,976 $ 39,676

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

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 theRelatedParties 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)	December31,2020 $ 220 528 330 220 1,298 770 15,035 11,193 $ 29,594	December31,2019	December31,2019
			$ 330 792 495 330 1,947 1,155 9,864 20,075 $ 34,988

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(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)		2020 $ 105 252 157 105 619 367 6,076 8,474 $ 16,155		2019
				$ 105 252 157 105 619 367 5,756 8,474 $ 15,835

(2) The deposits the Company received for leasing properties to the related parties as of December 31, 2020 and 2019 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)	December31,2020 $ 20 48 30 20 70 118 1,652 1,615 $ 3,573	December31,2019	December31,2019
			$ 20 48 30 20 70 118 1,652 1,615 $ 3,573

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

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. Lease expenses Investor with significant effects Navigator Real Estate Co., Ltd.	December31,2020 $ 2,960 $ 3,112 2020 $ 104 $ 2,408 $ -	December31,2019
			$ 5,201 $ 5,415 2019
			$ 163 $ 2,408 $ 53

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, 2020 and 2019 were both NT$ 482 thousand.

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7. Donated

2020 2019 Related party in substance Taiwan Fire and Marine Foundation $ 8,000 $ 8,000

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 2020 and 2019 are enumerated below:

Short-term employee benefits Post-employment benefits		2020 $ 85,398 2,302 $ 87,700		2019
				$ 75,286 2,086 $ 77,372

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, 2020, the balance of the gross retained earned premium for the compulsory and non-compulsory insurance, and the calculation are as follows:

Insurance type Compulsory insurance Non-Compulsory insurance	Premium income (1) Reinsurance premium income (2) $ 779,168 $ 251,424 5,733,038 178,889 $ 6,512,206 $ 430,313	Reinsurance premium outward (3) $ 362,236 1,701,528 $ 2,063,764		Premium retained (4)＝ (1)＋(2)－(3)
				$ 668,356 4,210,399 $ 4,878,755

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Item Compulsory insurance Non-Compulsor y insurance Item	Unearned premium reserves fordirect insurance Unearned premium reserves for reinsuranceinwards Reserve (5) Recovery (6) Reserve (7) Recovery (8) Net Change in Unearned Premium Reserves (9)=(5)－(6) +(7)－(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 cedingreinsuranceinward Reserve (10) Recovery (11) Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)= (4)－(9)+(12) $ 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	Unearned premium reserves fordirect insurance Unearned premium reserves for reinsuranceinwards Reserve (5) Recovery (6) Reserve (7) Recovery (8) Net Change in Unearned Premium Reserves (9)=(5)－(6) +(7)－(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 cedingreinsuranceinward Reserve (10) Recovery (11) Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)= (4)－(9)+(12) $ 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



	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.
As of December 31, 2019, the balance of the gross retained earned premium for the compulsory and non-compulsory insurance, and the calculation are as follows:

Insurancetype Premium income (1) Reinsurance premium income (2) Reinsurance premium outward (3) Compulsory insurance $ 761,634 $ 248,210 $ 350,390 Non-Compulsory insurance 5,465,027 175,223 1,672,620 $ 6,226,661 $ 423,433 $ 2,023,010 Unearned premium reserves fordirect insurance Unearned premium reserves for reinsuranceinwards Item Reserve (5) Recovery (6) Reserve (7) Recovery (8) Compulsory insurance $ 338,780 $ 330,762 $ 144,516 $ 141,738 Non-Compulsory insurance 2,576,787 2,427,551 95,689 85,397 $ 2,915,567 $ 2,758,313 $ 240,205 $ 227,135	Insurancetype Premium income (1) Reinsurance premium income (2) Reinsurance premium outward (3) Compulsory insurance $ 761,634 $ 248,210 $ 350,390 Non-Compulsory insurance 5,465,027 175,223 1,672,620 $ 6,226,661 $ 423,433 $ 2,023,010 Unearned premium reserves fordirect insurance Unearned premium reserves for reinsuranceinwards Item Reserve (5) Recovery (6) Reserve (7) Recovery (8) Compulsory insurance $ 338,780 $ 330,762 $ 144,516 $ 141,738 Non-Compulsory insurance 2,576,787 2,427,551 95,689 85,397 $ 2,915,567 $ 2,758,313 $ 240,205 $ 227,135		Premium retained (4)＝ (1)＋(2)－(3)	Premium retained (4)＝ (1)＋(2)－(3)
		s	$ 659,454 3,967,630 $ 4,627,084 Net Change in Unearned Premium Reserves (9)=(5)－(6) +(7)－(8) $ 10,796 159,528 $ 170,324

Reserve (7) $ 144,516 95,689 $ 240,205	Recovery (8)
	$ 141,738 85,397 $ 227,135			$ 10,796 159,528 $ 170,324

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Item Compulsory insurance Non-Compulsory insurance		Unearned premium reserves for cedingreinsuranceinward Reserve (10) Recovery (11) $ 203,272 $ 198,467 527,035 511,372 $ 730,307 $ 709,839	Unearned premium reserves for cedingreinsuranceinward Reserve (10) Recovery (11) $ 203,272 $ 198,467 527,035 511,372 $ 730,307 $ 709,839	Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)= (4)－(9)+(12) $ 4,805 $ 653,463 15,663 3,823,765 $ 20,468 $ 4,477,228	Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)= (4)－(9)+(12) $ 4,805 $ 653,463 15,663 3,823,765 $ 20,468 $ 4,477,228
		Reserve (10) $ 203,272 527,035 $ 730,307
					$ 653,463 3,823,765 $ 4,477,228

Note: As of December 31, 2019, the provision for stable funds of the Company is NT$ 12,028 thousand.

(II) Retained claims
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:

Insurancetype 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) Retained claims (4)＝(1)＋(2)－ (3) $ 314,515 $ 496,527 458,601 1,858,392 $ 773,116 $ 2,354,919	Refundable Claims for Reinsurance (3) Retained claims (4)＝(1)＋(2)－ (3) $ 314,515 $ 496,527 458,601 1,858,392 $ 773,116 $ 2,354,919
						$ 496,527 1,858,392 $ 2,354,919

As of December 31, 2019, the balance of the gross retained claims for the compulsory and non-compulsory insurance, and the calculation are as follows:

Insurancetype Claims (including the claim expenses) (1) Compulsory insurance $ 556,371 Non-Compulsory insurance 2,047,840 $ 2,604,211	Claims for reinsurance (2) $ 279,239 59,133 $ 338,372	Refundable Claims for Reinsurance (3) $ 320,732 259,514 $ 580,246	Retained claims (4)＝(1)＋(2)－ (3)	Retained claims (4)＝(1)＋(2)－ (3)
				$ 514,878 1,847,459 $ 2,362,337

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(III) Unearned premium reserves

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 Compulsory Motorcycle Liability Insurance Other Insurance (Note) Less: Accumulated impairment	Unearned premium reserves Direct business Reinsurance inward business $ 818,067 $ 68 532,521 - 240,110 1,770 191,446 - 169,376 67,232 1,238,794 188,417 - - $ 3,190,314 $ 257,487	Unearned premium reserves Direct business Reinsurance inward business $ 818,067 $ 68 532,521 - 240,110 1,770 191,446 - 169,376 67,232 1,238,794 188,417 - - $ 3,190,314 $ 257,487		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
						$ 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.

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The balances of the retained unearned premium reserves for each insurance type as of December 31, 2019 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 Compulsory Motorcycle Liability Insurance Other Insurance (Note) Less: Accumulated impairment	Unearned premium reserves Direct business Reinsurance inward business $ 744,441 $ 73 490,437 - 241,542 1,561 178,080 - 164,953 66,389 146,718 66,117 1,004,884 110,690 - - $ 2,971,055 $ 244,830	Unearned premium reserves Direct business Reinsurance inward business $ 744,441 $ 73 490,437 - 241,542 1,561 178,080 - 164,953 66,389 146,718 66,117 1,004,884 110,690 - - $ 2,971,055 $ 244,830		Ceding unearned premium reserves Ceding reinsurance business $ 371 5,338 20,179 - 98,973 88,034 538,615 - $ 751,510		Retained business
	Direct business $ 744,441 490,437 241,542 178,080 164,953 146,718 1,004,884 - $ 2,971,055
						$ 744,143 485,099 222,924 178,080 132,369 124,801 576,959 - $ 2,464,375

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

(IV) Claim reserves

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

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

reserves
Item Reported but not yet paid Not yet reported	Direct Insurance Reserve (1) Recovery (2) $1,539,543 $1,561,264 869,734 873,230 $2,409,277 $2,434,494	Reinsurance inward business Reserve (3) Recovery (4) $ 319,375 $ 287,474 165,693 166,144 $ 485,068 $ 453,618	Net change in claims reserves (5)=(1)-(2)+ (3)-(4)
	Reserve (1) $1,539,543 869,734 $2,409,277	Reserve (3) $ 319,375 165,693 $ 485,068
			(	$ 10,180 3,947 ) $ 6,233

Item Reported but not yet paid Not yet reported		Cedingreinsurance business Reserve (6) Recovery (7) $ 557,847 $ 667,090 367,557 369,723 $ 925,404 $ 1,036,813	Cedingreinsurance business Reserve (6) Recovery (7) $ 557,847 $ 667,090 367,557 369,723 $ 925,404 $ 1,036,813	Ceding net change in claims reserves (8)=(6)-(7)	Ceding net change in claims reserves (8)=(6)-(7)
		Reserve (6) $ 557,847 367,557 $ 925,404
				( ( (	$ 109,243 ) 2,166 ) $ 111,409 )

As of December 31, 2019, the balance of the reported but not paid and unreported claim reserves, and the calculation are as follows:
(1) Claim reserves and ceding claims reserves

Item Reported but not yet paid Not yet reported Less: Accumulated impairment	Claim r	Claim r	eserves Reinsurance inward business (2) $ 287,474 166,144 - $ 453,618	Ceding claims reserves Ceding reinsurance business (3) $ 667,090 369,723 ( 4,287 ) $ 1,032,526	Retained business (4)=(1)+(2)-(3)	Retained business (4)=(1)+(2)-(3)
	Direct Insurance (1)
		$ 1,561,264 873,230 - $ 2,434,494		(		$ 1,181,648 669,651 4,287 $ 1,855,586

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

reserves
Item Reported but not yet paid Not yet reported	Direct Insurance Reserve (1) Recovery (2) $1,561,264 $1,487,583 873,230 898,768 $2,434,494 $2,386,351	Reinsurance inward business Reserve (3) Recovery (4) $ 287,474 $ 291,803 166,144 177,038 $ 453,618 $ 468,841	Net change in claims reserves (5)=(1)-(2)+ (3)-(4)
	Reserve (1) $1,561,264 873,230 $2,434,494	Reserve (3) $ 287,474 166,144 $ 453,618
			(	$ 69,352 36,432 ) $ 32,920

241 -

Item Reported but not yet paid Not yet reported		Cedingreinsurance business Reserve (6) Recovery (7) $ 667,090 $ 562,855 369,723 390,112 $ 1,036,813 $ 952,967	Cedingreinsurance business Reserve (6) Recovery (7) $ 667,090 $ 562,855 369,723 390,112 $ 1,036,813 $ 952,967	Ceding net change in claims reserves (8)=(6)-(7)	Ceding net change in claims reserves (8)=(6)-(7)
		Reserve (6) $ 667,090 369,723 $ 1,036,813
				(	$ 104,235 20,389 ) $ 83,846

(V) Premium deficiency reserves
As of December 31, 2020, the balance of the premium deficiency reserves of each insurance type, and the calculation are as follows:
- (1) Premium deficiency reserves and ceding premium deficiency reserves

Item Fishing Vessel Insurance Aviation Insurance Miscellaneous Insurance	Premiumdeficiencyreserves Direct business Reinsurance inward business $ 2,762 $ 226 2,431 146 1,999 24 $ 7,192 $ 396	Premiumdeficiencyreserves 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
	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

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	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

242 -

Item Fishing Vessel Insurance Aviation Insurance Marine Hull Insurance Marine Cargo Insurance Miscellaneous Insurance		Cedingreinsurance business Reserve (6) Recovery (7) $ - $ - - - - - - - - - $ - $ -	Cedingreinsurance 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.

As of December 31, 2019, the balance of the premium deficiency reserves of each insurance type, and the calculation are as follows:
(1) Premium deficiency reserves and ceding premium deficiency reserves

Item Fishing Vessel Insurance Aviation Insurance Marine Hull Insurance Marine Cargo Insurance	Premiumdeficiencyreserves Direct business Reinsurance inward business $ 2,946 $ 234 2,881 103 783 66 139 2 $ 6,749 $ 405	Premiumdeficiencyreserves Direct business Reinsurance inward business $ 2,946 $ 234 2,881 103 783 66 139 2 $ 6,749 $ 405		Ceding premium deficiency reserves Ceding reinsurance business $ - - - - $ -		Retained business
	Direct business $ 2,946 2,881 783 139 $ 6,749
						$ 3,180 2,984 849 141 $ 7,154

243 -
(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 Overseas division business		Direct Insurance Reserve (1) Recovery (2) $ 2,946 $ 1,836 2,881 3,506 783 2,853 139 - - - $ 6,749 $ 8,195	Direct Insurance Reserve (1) Recovery (2) $ 2,946 $ 1,836 2,881 3,506 783 2,853 139 - - - $ 6,749 $ 8,195		Reinsurance inward business Reserve (3) Recovery (4) $ 234 $ 105 103 147 66 30 2 - - 183 $ 405 $ 465	Reinsurance inward business Reserve (3) Recovery (4) $ 234 $ 105 103 147 66 30 2 - - 183 $ 405 $ 465	Net change in premium deficiency reserves for direct business and reinsuranc (5)=(1)-(2) +( 3 )-(4)
		Reserve (1) $ 2,946 2,881 783 139 - $ 6,749			Reserve (3) $ 234 103 66 2 - $ 405
							$ 1,239 ( 669 ) ( 2,034 ) 141 ( 183 ) ($ 1,506 )

Item Fishing Vessel Insurance Aviation Insurance Marine Hull Insurance Marine Cargo Insurance Overseas division business		Cedingreinsurance business Reserve (6) Recovery (7) $ - $ - - - - - - - - - $ - $ -	Cedingreinsurance 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) $ - - - - - $ -
						( ( ( (	$ 1,239 669 ) 2,034 ) 141 183 ) $ 1,506 )

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

244 -

(VI) Special reserves

As of December 31, 2020, the special reserves for the compulsory and non-compulsory insurance increase/decrease as the following:
(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

(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.

As of December 31, 2019, the special reserves for the compulsory and non-compulsory insurance increase/decrease as the following:
(1) Special reserves - Compulsory automobile liability insurance

Item Balance - beginning Provision of the Period Recovery of the Period Balance - ending		Amount
	(	$ 958,631 - 29,634 ) $ 928,997

(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		$ 194,190 - ( 8,091 ) $ 186,099		$ 805,099 - ( 8,551 ) $ 796,548		$ 230,305 - - $ 230,305		$ 1,229,594 - ( 16,642 ) $ 1,212,952		$ 349,985 46,159 - $ 396,144		$ 826,597 126,380 ( 26,148 ) $ 926,829		$ 360,279 52,255 - $ 412,534		$ 1,536,861 224,794 ( 26,148 ) $ 1,735,507

245 -

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 31,2020	December 31,2019	Liabilities	December 31,2020	December 31,2019
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	$1,547,851 - 12,219 26,709 22,400 41,501 - - 209,123 291,759 43 -	$1,551,499 - 11,977 27,130 15,878 40,106 - - 203,272 280,366 2,407 176	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	$ - - - 42,559 494,693 698,726 913,838 - 1,789	$ - - - 45,307 483,296 673,672 928,997 176 1,363
Total assets	$2,151,605	$2,132,811	Total liabilities	$2,151,605	$2,132,811

246 -
Detailed income/cost statement of compulsory automobile liability insurance

Item	2020	2019
OPERATING REVENUES Premium income (including reinsurance revenue NT$251,424 thousand and NT$248,210, 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$275,625 thousand and NT$279,239 thousand, respectively) Less: Claim recovered from reinsurer Retained claims Net change in claims reserves Net change in special reserves Total operatingcosts	$ 855,147 ( 362,236 ) ( 5,546 ) 487,365 7,664 $ 495,029 $ 811,042 (314,515 ) 496,527 13,661 ( 15,159 ) $ 495,029	$ 832,183 ( 350,390 ) ( 5,991 ) 475,802 9,922 $ 485,724 $ 835,610 (320,732 ) 514,878 480 ( 29,634 ) $ 485,724

247 -
(VIII) Acquisition Cost of Insurance Contracts
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.

As of December 31, 2019, 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 One-year Residential Fire Insurance One-year Commercial Fire Insurance Compulsory Automobile Liability Insurance Other Insurance (Note)	Commission expenditure $ 177,840 121,836 103,792 55,343 46,785 - 197,999 $ 703,595		Fee expenditure $ - - - - - 71,136 43,056 $ 114,192	Reinsurance commission expenditure $ 23 - - - 1,914 - 11,962 $ 13,899		Other cost $ 4,070 736 108 9,143 - - 5 $ 14,062		Total
								$ 181,933 122,572 103,900 64,486 48,699 71,136 253,022 $ 845,748

248 -

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 s 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

(2) Reinsurance assumed

Insurance type	Reinsurance premium income (1)	Reinsurance premium income (1)		Net change in unearned premium reserves (2)		Reinsurance commission expenditure (3)		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

249 -

(3) Ceding reinsurance business

Insurance type 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)		Reinsurance premium outward (1) $ 604,803 283,737 106,106 41,339 112,087 62,942 123,352 729,398 $ 2,063,764		Ceding net change in unearned premium reserves(2) $ - 15,939 ) 4,119 ) 1,459 ) 1,936 3,380 ) 1,646 71,989 $ 50,674	i	Reinsurance commission ncome and fee income (3) $ 60,981 81,061 9,066 3,368 26,138 6,765 - 84,576 $ 271,955		Refundable Claims for Reinsurance (4) $ - $ 148,265 3,396 16,607 29,153 2,064 60,203 513,428 $ 773,116	Ceding net change in claims reserves (5) $ - ( 60,975 ) ( 3,084 ) ( 44,987 ) ( 10,996 ) ( 5,668 ) 5,252 9,049 ($ 111,409 )	Loss (profit) of Ceding reinsurance (6)=(1)-(2)-(3)- (4)-(5)	Loss (profit) of Ceding reinsurance (6)=(1)-(2)-(3)- (4)-(5)
			( ( ( (						( ( ( ( ( (		$ 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.

The amount of the profits and losses s at each insurance category and the calculations for 2019 are as follows:
(1) Direct Insurance

Direct Insurance
Item General Personal Automobile Liability Insurance General Personal Automobile Physical Damage Insurance Residential Earthquake Insurance Casualty Insurance One-year Commercial Fire Insurance One-year Residential Fire Insurance Commercial earthquake insurance Other Insurance (Note)		Premiums income (1) $ 1,404,488 916,578 562,100 467,740 445,809 310,313 157,648 1,961,985 $ 6,226,661		Net change in unearned premium reserves(2) $ 80,202 18,553 - 8,353 10,796 11,503 3,868 23,979 $ 157,254	Acquisition cost of insurance contracts (3) $ 181,910 122,572 34,713 103,900 46,785 64,487 10,959 266,523 $ 831,849	Claims (including the claim expenses) (4) $ 854,947 494,625 - 195,150 96,901 25,176 8,029 929,383 $ 2,604,211	c	Net change in laims reserves (5) $ 3,706 ) 15,824 - 9,082 ) 33,898 ) 281 ) 7,736 ) 87,022 $ 48,143	Profit (loss) of Insurance (6)=(1)-(2)-(3)- (4)-(5)
							( ( ( ( (			$ 291,135 265,004 527,387 169,419 325,225 209,428 142,528 655,078 $ 2,585,204

(2) Reinsurance assumed

Insurance type Residential Earthquake Insurance One-year Commercial Fire Insurance Commercial earthquake insurance Typhoon and Flood Insurance Nuclear Energy Insurance Marine Hull Insurance Aviation Insurance Other Insurance (Note)		Reinsurance premium income (1) $ 62,085 28,626 9,770 8,704 8,065 3,836 1,191 301,156 $ 423,433		Net change in unearned premium reserves (2) $ 465 3,277 1,056 901 665 504 659 ) 6,861 $ 13,070		Reinsurance commission expenditure (3) $ - 1,914 597 516 - 3 180 10,689 $ 13,899		Claims for reinsurance (4) $ - 3,888 780 435 983 2,786 2,330 ) 331,830 $ 338,372	c	Net change in laims reserves (5) $ - 10,939 35 305 ) 3,268 ) 8,090 ) - 14,534 ) $ 15,223 )	Profit (loss) of reinsurance inward (6)=(1)-(2)-(3)- (4)-(5)	Profit (loss) of reinsurance inward (6)=(1)-(2)-(3)- (4)-(5)
			(				(		( ( ( ( (		(	$ 61,620 8,608 7,302 7,157 9,685 8,633 4,000 33,690 ) $ 73,315

250 -

(3) Ceding reinsurance business

Insurance type Residential Earthquake Insurance One-year Commercial General Fire Insurance Commercial earthquake insurance Typhoon and Flood Insurance Miscellaneous Insurance Other Insurance (Note)		Reinsurance premium outward (1) $ 562,100 327,380 117,713 71,832 29,262 914,723 $ 2,023,010		Ceding net change in unearned premium reserves(2) $ - 549 1,400 2,580 29,402 ) 45,341 $ 20,468	i	Reinsurance commission ncome and fee income (3) $ 56,785 104,000 10,932 8,090 7,636 107,911 $ 295,354		Refundable Claims for Reinsurance (4) $ - 78,143 5,552 3,663 352 492,536 $ 580,246	c	Ceding net change in laims reserves (5) $ - 25,665 ) 5,998 ) 3,421 ) 4,958 ) 123,888 $ 83,846	Loss (profit) of Ceding reinsurance (6)=(1)-(2)-(3)- (4)-(5)	Loss (profit) of Ceding reinsurance (6)=(1)-(2)-(3)- (4)-(5)
			(						( ( ( (			$ 505,315 170,353 105,827 60,920 55,634 145,047 $ 1,043,096

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

and right for pursuit of recovery
Credit Insurance Miscellaneous Insurance Bonding Insurance Personal Comprehensive Insurance General Liability Insurance Engineering Insurance	December 31, 2020 $ 31,580 610 2,148 48 11 1 $ 34,398	December 31, 2019
			$ 36,022 2,071 1,801 13 11 2 $ 39,920

(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.

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:

251 -
Government bond. Exchangeable government bonds are excluded.
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:

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

252 -

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, 2020, 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

the 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 yetpaid $ 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

253 -
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		Claimpaid $ 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

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

not paid and unreported ceding claims to the policyholders

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

254 -

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

(II) As of December 31, 2019, the information of the claim liabilities to the policyholders by the Company is summarized as the following:

Item One-year Commercial Fire Insurance General Personal Automobile Liability Insurance General Personal Automobile Physical Damage Insurance Fishing Vessel Insurance Marine Hull Insurance Compulsory Automobile Liability Insurance Compulsory Motorcycle Liability Insurance Other Insurance (Note)	Claims payable Reported and paid $ 3,028 841 389 - - - - 146 $ 4,404		Claim reserves
		Reported but not yetpaid $ 199,153 444,442 145,430 125,114 121,295 73,710 47,123 692,471 $ 1,848,738	Notyet reported $ 9,009 126,371 39,693 27,972 54,197 343,397 130,597 308,138 $ 1,039,374		Total
					$ 208,162 570,813 185,123 153,086 175,492 417,107 177,720 1,000,609 $ 2,888,112

255 -
Reinsurance reserve assets - Claim recoverable from reinsurers to the reported and paid claims to the policyholders

Insurance type Compulsory Automobile Liability Insurance General Liability Insurance Engineering Insurance Marine Cargo Insurance Commercial earthquake insurance Compulsory Commercial Automobile Liability Insurance Compulsory Motorcycle Liability Insurance One-year Commercial General Fire Insurance Personal Accident Insurance Other Insurance (Note) Allowance loss		Claimpaid $ 9,141 8,652 5,800 4,216 3,882 2,557 4,180 2,128 1,828 10,341 ) 32,043 160 ) $ 31,883	Reported and paid $ - - - - - - - 719 16 - ( 735 ( 4 ) ( $ 731	Total
	( (		(	$ 9,141 8,652 5,800 4,216 3,882 2,557 4,180 2,847 1,844 10,341 ) 32,778 164 ) $ 32,614

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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 Fishing Vessel Insurance Marine Hull Insurance Engineering Insurance General Liability Insurance Compulsory Automobile Liability Insurance Marine Cargo Insurance Compulsory Motorcycle Liability Insurance Other Insurance (Note) Accumulated impairment		Reported but not yet paid $ 158,010 115,636 102,210 49,307 48,481 29,163 27,677 7,357 129,249 $ 667,090		Not yet reported $ 4,200 16,500 32,300 6,200 14,100 155,730 33,900 52,927 53,866 $ 369,723 (	Total
					$ 162,210 132,136 134,510 55,507 62,581 184,893 61,577 60,284 183,115 1,036,813 4,287 ) $ 1,032,526

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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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.

2019

2019
Insurance type One-year Commercial Fire Insurance Aviation Insurance Marine Hull Insurance Fishing Vessel Insurance	Estimated amount $ 125,968 30,190 27,524 100,999 $ 284,681	Amount after changes
		$ 125,968 30,190 27,524 100,999

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 2020 and 2019 may increase NT$593 thousand or NT$555 thousand, or decrease NT$593 thousand or NT$484 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 [434 x 308] 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.
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(4) Effectively control the capital adequacy ratio by complying with the regulations of managing capital adequacy ratio by the competent authorities.
(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.

The functions of each unit are as follows:
(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.
(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.
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D. Adjusted the risk categories, limit allocation, and assumption approach depending on the changes of circumstance.
E. Coordinate the interactions and communications of cross-department risk management.
(3) Risk Management Dept.
A. In charge of the executions of daily risk monitor, measurement, and evaluation, and independent from the business to perform the duties.
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.
C. Handling the breach of risk limits by other units under the authorization of the Risk Management Committee.
(4) Business units (all departments other than Audit Dept. and Risk Management Dept.)
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.
B. The business units’ duties to execute the risk management are as follows:
- a. Identifying risks and reporting the exposures.
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b. Measuring the extent (quantifying or qualifying) of impact when such risks materialize, and convey the risk information in a timely and correct manner.
c. Reviewing each risks and limit regularly, to ensure the risk limit of the unit is effectively executed.
d. Monitoring the risk exposure and report the breaches, including the measures taken for such breaches.
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.
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.
g. Assisting the collection of the operational risks.
(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.

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(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 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:

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December 31, 2020

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$ 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.

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December 31, 2019

Unit: NT$ Thousand
Highest retention

NT$ 1,500,000
NT$ 480,000
US$ 5,000
US$ 1,000
US$ 25,000
US$ 1,000
US$ 1,200
US$ 1,200
NT$ 1,500,000
NT$ 120,000
NT$ 120,000
NT$ 300,000
NT$ 300,000
NT$ 1,200,000
NT$ 500,000
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
265 -

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 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 premium incomes for the Company mainly concentrate at automobile insurance, fire insurance, personal accident insurance, liability insurance and engineering 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 2020 2019	The impact to the profit/loss when the expected loss ratio increase 5% Before holding the reinsurance After holding the reinsurance ($ 67,360 ) ($ 51,660 ) ($ 67,140 ) ($ 51,240 )	The impact to the profit/loss when the expected loss ratio increase 5% Before holding the reinsurance After holding the reinsurance ($ 67,360 ) ($ 51,660 ) ($ 67,140 ) ($ 51,240 )	Unit: NT$ Thousand The impact to the profit/loss when the expected loss ratio decrease 5% Before holding the reinsurance After holding the reinsurance $ 62,760 $ 47,460 $ 64,100 $ 48,300	Unit: NT$ Thousand The impact to the profit/loss when the expected loss ratio decrease 5% Before holding the reinsurance After holding the reinsurance $ 62,760 $ 47,460 $ 64,100 $ 48,300
	Before holding the reinsurance ($ 67,360 ) ($ 67,140 )		Before holding the reinsurance $ 62,760 $ 64,100
	( (	( (

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

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(X) Development Trend of Claims
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 60 $ 2,417,893 $ 2,408,709 2,070,556

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

The development trend of claims for 2019 is as the following:

Unit: NT$ Thousand

Incurred accumulated claims (claim expenses included)

Year/Month of the Accident 2015 2016 2017 2018 2019	12 $ 1,788,128 2,503,104 2,013,877 2,239,137 2,136,349	24 $ 1,894,557 2,499,139 2,087,243 2,298,082	36 $ 1,861,135 2,452,145 2,073,409	48 $ 1,825,024 2,417,893	60
					$ 1,821,207

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)

Foreignassets Monetary items USD RMB Foreign liabilities Monetary items USD	December31,2020 Foreign Currency Exchange rate Carrying Amount $ 30,521 28.48 $ 869,245 55,942 4.31 241,109 241 28.48 6,862	December31,2020 Foreign Currency Exchange rate Carrying Amount $ 30,521 28.48 $ 869,245 55,942 4.31 241,109 241 28.48 6,862	December31,2019	December31,2019	December31,2019
	Foreign Currency $ 30,521 55,942 241	Exchange rate 28.48 4.31 28.48	Foreign Currency $ 30,264 60,541 970	Exchange rate 30.03 4.32 30.03	Carrying Amount
					$ 908,828 261,537 29,129

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

follows:
Foreign Currency USD RMB	2020	Foreign exchange income or loss,net ( $ 33,737 ) 2,405 ($ 31,332 )	2019
	Exchangerate 28.48 4.31		Exchangerate 30.03 4.32	Foreign exchange income or loss,net
				( $ 24,797 ) 304 ($ 24,493 )

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 paid-up 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. (Table 1)
(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 2)

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.

268 -

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 ofperiod	Holdings at end ofperiod	Holdings at end ofperiod	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	$ 242,485	$ 103,418	$ 25,596

269 -

Table 2. Information about major shareholders:

Name of major shareholder	Shares	Shares
	Shares	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 non-tangible 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.
270 -
6.5. Parent Company Only Financial Report audited and attested by a CPA from the most recent year: The Company issues the Individual Financial Report and this item is therefore not applicable.
6.6. Financial difficulties occurred to the company and its affiliated enterprises in the most recent year and up to the publication of this annual report: None.
271 -

、 VII Review of financial position, business performance and risk issues

7.1. Comparative Analysis of Financial Conditions

Unit: NT$thousands

Year Item	2020 December 31	2019 December 31	Difference	Difference
			Amount	％
Cash and cash equivalents	`3,684,530`	`3,415,293`	`269,237`	`7.88`
Receivable	`665,460`	`612,947`	`52,513`	`8.57`
Financial assets and loans (Note 1)	`12,096,213`	`11,741,232`	`354,981`	`3.02`
Reinsurance contract asset	`1,919,371`	`1,919,723`	`(352)`	`(0.02)`
Propertyand equipment	`356,406`	`360,389`	`(3,983)`	`(1.11)`
Right-of-use assets	`45,751`	`34,132`	`11,619`	`34.04`
Intangible assets	`9,957`	`4,708`	`5,249`	`111.49`
Other Assets(Note 1)	`802,948`	`798,491`	`4,457`	`0.56`
Assets	`19,580,636`	`18,886,915`	`693,721`	`3.67`
Payables	`994,378`	`984,681`	`9,697`	`0.98`
Lease liabilities	`71,498`	`66,645`	`4,853`	`7.28`
Insurance liabilities and insurance contract reserves with financial product’s nature	`8,468,433`	`8,253,100`	`215,333`	`2.61`
Reserve for liabilities	`82,378`	`84,127`	`(1,749)`	`(2.08)`
Other liabilities(Note 1)	`383,416`	`410,488`	`(27,072)`	`(6.60)`
Total Liabilities	`10,000,103`	`9,799,041`	`201,062`	`2.05`
Capital stock	`3,622,004`	`3,622,004`	`-`	`-`
Capital surplus	`98,962`	`98,962`	`-`	`-`
Retained earnings	`5,750,823`	`5,413,849`	`336,974`	`6.22`
Other items under equity	`108,744`	`(46,941)`	`155,685`	`331.66`
Stockholders’ Equity	`9,580,533`	`9,087,874`	`492,659`	`5.42`

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.

Note 2:﹝-﹞ in the table means ﹝0﹞

Descriptions:

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:

(1) Right-of-use assets

The increase by NT$11,619 thousand this year from last year was primarily a result of the increase in lease.
(2) Other items under equity

The increase by NT$155,685 thousand this year from last year was primarily a result of the increase in the valuation income at fair value through other comprehensive income.

272 -

7.2. Analysis of Financial Performance

Analysis of Financial Performance

Unit: NT$thousands

Year Item	`2020`	`2019`	Increase (decrease)amount	Change %
OperatingRevenue	`5,396,686`	`5,200,892`	`195,794`	`3.76`
OperatingCosts	`3,362,516`	`3,151,377`	`211,139`	`6.70`
OperatingExpenses	`1,263,771`	`1,209,664`	`54,107`	`4.47`
OperatingIncome	`770,399`	`839,851`	`(69,452)`	`(8.27)`
Non-operating Income and Expenses	`2,540`	`(6,199)`	`8,739`	`140.97`
PROFIT BEFORE INCOME TAX	`772,939`	`833,652`	`(60,713)`	`(7.28)`
Tax expense	`85,344`	`130,523`	`(45,179)`	`(34.61)`
Income from Continuing Operation Net Income	`687,595`	`703,129`	`(15,534)`	`(2.21)`

Descriptions:

Analysis focusing on the increase/decrease changes for 10% or more

(1)Non-operating Income and Expenses

The increase in non-operating revenues and expenses by NT$8,739 thousand this year from the same period of last year was primarily a result of the decrease in impairment loss of reinsurance financial assets this year and increase in miscellaneous expenses in the previous year.

(2) Tax expense

The decrease in the tax expense by NT$45,179 thousand this year from the same period of last year was primarily a result of the decrease in pre-tax profit and increase in the unrealized evaluation gains from financial assets at fair value through other comprehensive income.

273 -

7.3. Review and Analysis of Cash Flow

Analysis of cash flow

Analysis of cash flow	Analysis of cash flow	Analysis of cash flow	Analysis of cash flow
				Unit: NT$thousands
Opening cash balance ①	Annual net cash flow from operating activities ②	Net cash inflow (outflow) from investment and fundraising activities in this year③	Cash balance (inadequacy) amount ① ＋②＋③	Remedial measures for cash inadequacy
				Investment plan	Fundraising plan
`3,415,293`	`534,945`	`(265,708)`	`3,684,530`	None	None
Explanation: 1. Analysis on the cash flow changes of the current year: (1) Operating activities The net cash inflow was NT$534,945,000, mainly due to the current net profit before tax of NT$772,939,000, the increase of NT$119,132,000 in financial assets measured at fair value through profit and loss, and the increase of NT$136,205,000 in financial assets measured at fair value through other comprehensive gains and losses, and decrease in notes receivables amounting to NT$24,929,000. (2) Investment activities The net cash inflow was NT$130,044,000, mainly due to the disposal of investment properties of NT$140,339,000. (3) Financing activities The net cash outflow amounted to NT$395,752,000 mainly due to the distribution of cash dividends of NT$362,201,000. 2. Remedial action for cash deficit and liquidity analysis: Not applicable. 3.Cash liquidityanalysisfor thenextyear: Opening cash balance ① Estimated annual net cash flow from operating activities ② Annual net cash inflow (outflow) from financing activities ③ Expected cash balance (inadequacy) amount ① ＋②＋③ Estimated remedial measures for cash inadequacy Investment plan Fundraising plan `3,684,530` `475,261` `(398,420)` `3,761,370` 無無

7.4. Impact of major capital expenditures on corporate finances and business for the most recent

year

7.4.1 The use and funding sources of major capital expenditures and the nature of capital expenditures in investments in the next five years: None.

7.4.2 Projected potential benefits: None.

7.5. Investment policy in the past year, profit/loss analysis, improvement plan, and investment plan for the coming year:

The Company's investment policy is based on the principle of obtaining long-term stable profits and dispersing of risks. The main investments are distributed to public investments, special stocks with fixed income, and venture capital with high potential for growth. The cash dividends distributed by investees in 2020 amounted to NT$8,781 thousand. The Company shall carefully select investment targets in the future to increase return on equity and profitability.

274 -

7.6. Risk analysis and assessment of the most recent year up to the publication date of this report

7.6.1 Impact of interest rates and exchange rate fluctuations, as well as inflation on the Company’s profit and loss, as well as future response measures

In 2020, the global spread of the COVID-19 pandemic severely impacted global economies. In order to stimulate economic growth and respond to the impact of the pandemic, central banks of various countries actively adopted measures to expand monetary easing and fiscal incentives. The U.S. Federal Reserve (Fed) cut interest rates twice in March of 2020. The yield on the 10-year U.S. Treasury Bond once fell to 0.54%. With the distribution of vaccines worldwide and the proposed large-scale stimulus plans by newly inaugurated U.S. President Joe Biden, the global economy is expected to continue to recover, leading the 10-year yield of U.S. Treasury Bond to rebound from historical lows. In March 2020, Taiwan’s Central Bank lowered the discount rate to 1.125% in response to the impact of the pandemic on the global economy. Afterwards, in considering that major economies have maintained loose monetary policies and continued to implement large-scale relief and revitalization programs that will lead to moderate economic recovery, the Bank has kept policy interest rates unchanged for three consecutive quarters in order to continue support economic growth with loose monetary policies. Since the Company does not have bank borrowings or issuance of bonds, future interest rate adjustments will have no impact on the Company’s liabilities. For assets, the U.S. Federal Funds Rate is currently maintained at 0%~0.25%. With progress seen in new large-scale fiscal programs in the U.S. and better-than-expected vaccination drives, the yield on the 10-year U.S. Treasury Bond has risen to 1.5%, which is relatively favorable for foreign bond investments. The Company will continue to look for suitable financial instruments to increase investment income.

The Company’s foreign investment is mainly based on U.S. dollar and RMB assets. The Federal Reserve Board announced after its meeting on September 17, 2020 that it would change the inflation target to an average of 2%, so that the Federal Reserve will have more room and time to maintain loose monetary policy, and said that interest rates may remain unchanged before 112, so the weak U.S. dollar index is expected to remain normal; benefiting from accommodative monetary policy. China’s economic recovery is better than expected, and after the new U.S. President Biden took office, the U.S.- China trade war is expected to develop into a more rational paradigm, which will help the RMB to maintain a steady rise against the U.S. dollar. In the future, the Company will pay close attention to exchange rate trends, adjust foreign currency investment positions in a timely manner, and use various foreign exchange hedging tools such as forward foreign exchange contracts when necessary to reduce the impact of exchange rate changes on the Company's profit and loss.

In 2020, the domestic Consumer Price Index fell by an average of 0.23%, which was a significant drop from the 0.56% increase in the 2019 Consumer Price Index. This can be mainly attributed to the impact of the COVID-19 pandemic and weak international oil prices. Considering the continued economic recovery in Taiwan expected in 2021, the international demand for crude oil has rebounded, and consumer demand is also expected to recover, which will drive the price of related commodities to rise. The Directorate General of Budget, Accounting and Statistics estimates that the domestic Consumer Price Index will rise moderately by 1.33% in 2021. The Company will continue to observe the impact of inflation on interest rates and exchange rates, and achieve the goal of steady profitability under the principles of safety and liquidity.

7.6.2 The policies to engage in high-risk, high-leverage investments, lending funds to others, endorsements and guarantees, and the transactions of derivative products, the main reasons for profits and losses, and future response measures
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The Company has not engaged in any high-risk, high-leverage investment, loans to other parties, provided any endorsement and guarantee, or conducted transactions in derivatives.

7.6.3 Future R&D plans and R&D expenditure expected to be invested:

(1) Insurance Products

    - 1.Additional Clauses for TFMI Criminal Proceeding Costs

    - 2.Additional Clauses for TFMI Consolation Fund Expenses for Employer’s Liability Insurance

    - 3.TFMI Statutory Infectious Disease Salary Compensation Insurance for Enterprises

    - 4.Additional Clauses for TFMI Personal Injury Microinsurance Medical Insurance Benefits (pay-as-you-go type)

    - 5.TFMI e-commerce Purchase Protection Insurance

(2) IT System

- RPA Robotic Process Automation System

7.6.4 Financial impacts and responsive measures due to change of local and foreign regulations in recent years:
- In order to comply with the International Financial Reporting Standard No. 17
- guidelines, FSC has announced in 3rd Quarter 2018 that Taiwan will apply IFRS17 in 2026. TFMI has assembled IFRS17 Task Force to implement the adaptation. As at end of 2020, differentiation analysis has been completed. 2021 onwards will be the system integration related phase planning, company process flow design and internal controls installation.
7.6.5 Financial impacts and responsive measures due to technological or industrial changes in the last year: None.
7.6.6 Crisis management, impacts, and responsive measures due to change of corporate image in the last year: None.
7.6.7 Expected benefits, risks and responsive measures in relation to mergers and acquisitions undertaken in the last year: None.
7.6.8 Expected benefits, risks and responsive measures associated with plant expansions in the last year: None.
7.6.9 Risks and responsive measures associated with concentrated sales or purchases in the last year: None.
7.6.10 Impacts, risks and responsive measures following a major transfer of shareholding by directors, supervisors, or shareholders with more than 10% ownership interest in the last year: None.
7.6.11 Impacts, risks and responsive measures associated with a change of management: None.
7.6.12 Major litigations, non-contentious cases, or administrative litigations involving the company or any director, supervisor, president, person-in-charge or major shareholder 196 with more than 10% ownership interest, whether concluded or pending judgment, that are likely to pose significant impact to shareholders' equity or security prices of the company. Disclose the nature of dispute, the amount involved, the date the litigation first started, the key parties involved, and progress as of the publication date of this annual report: None.
7.6.13 Other material risks and responsive measures:
The Company's information security risk management framework, policies, risk

assessment, and countermeasures:

 1. The Company has established the Information Security Management System (ISMS) based on ISO/IEC 27001 international standards. The structure of the information security Committee is shown in the figure below. The Committee convenes regular information security policy management meetings and reports annual information security implementation status to the Board of Directors.

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

Convener
Executive Secretary
System and Regulation
Establishment Team Inventory and Risk Audit Team
Assessment Team
----- End of picture text -----

The Company passed the ISO 27001 Information security management certification by the British Standards Institution (BSI) in December 2020. The certificate remains effective. The Company follows the international standards to ensure the confidentiality, integrity, and availability of information operations. We implement information security protection and review improvements to provide more stable, safer, and better information services.
The Company has purchased the information security insurance provided by Mingtai Insurance Co., Ltd. in 2020. The coverage includes information leaks, online blackmail, Internet crimes, and other Internet security incidents. Coverage for third party claims include liabilities for confidentiality, privacy, online security, and media accountability. The insured amount is NT$10,000,000.
The Company conducts regular information security evaluation tasks in accordance with the "Principles for Computer System Information Security Evaluation by Insurance Companies" registered by the FSC. Evaluation items include (1) Information framework review; (2) Online activities review; (3) Online equipment, servers, and terminal equipment review; (4) External website review; (5) Security review.
There has been no major information security incidents in 2019 and this year as of the published date of the Annual Report.

7.7. Other important disclosures: None.

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、 VIII Special Remarks

8.1 Affiliated companies: None.
8.2 Private placement of securities in the last year up till the publication date of this annual report: None.
8.3 Holding or disposal of the company's shares by subsidiaries in the last year, up till the publication date of this annual report: None.
8.4 Other supplementary information: None.

、 IX Any occurrence of event defined under Subparagraph 2, Paragraph 3, Article 36 of the Securities and Exchange Act in the previous year up till the publication date of this annual report that significantly impacted shareholders’ equity or security prices: None.

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AI assistant

TFMI — Annual Report 2021

52200_rns_2021-09-03_bdbf585d-911e-4ea6-a82e-fc9ff3abcb12.pdf

TWSE: 2832

2020 Annual Report

Printed on APR 30, 2021

Note to Readers:

1. Spokesperson

2. Headquarters and Branches

Branches

3. Stock Transfer Agent

4. Auditors

5. Overseas Securities Exchange: None

6. Corporate Website

CONTENTS

、 I Letter to Shareholders

Dear Shareholders,

1.1 2020 Business Report

1.1.1 Operating Plan Implementation Results

1.1.2 Goal Execution and Financial Income for the Current Year

1.1.3 Profitability Analysis

1.1.4 Research and Development

1.2 2021 Business Plan Outline

1.2.1 Business Policy

1.2.2 Projected Sales Volume

1.2.3 Significant Production and Marketing Policies

1.3 Development Strategies for the Company in the Future

1.4 Influences from External, Regulatory and Overall Business Environment

II. Company Profile

2.1 Date of Establishment: March 12, 1948

2.2 Company History

、 III Corporate Governance Report

3.1 Organization 3.1.1 Organizational Chart

3.1.2 Organization Chart

3.2 Directors, Supervisors and Management Team

3.2.1 Directors and Supervisors

Major shareholders of the institutional shareholders

Major shareholders of the Company’s major institutional shareholders

Professional Qualifications and Independence Analysis of Directors and Supervisors

3.2.2 Board membership diversification policy and results

3.2.2 Management Team

3.2.3 Remuneration of Directors, Supervisors, President, and Vice President Remuneration of Directors

Remuneration of Supervisors: None

Remuneration of the President and Vice President

Employee Bonus to Executive Officers

3.2.4 Comparison of Remuneration for Directors, Supervisors, Presidents and Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, Presidents and Vice Presidents

3.3 Implementation of Corporate Governance 3.3.1 Board of Directors

Attendance of Independent Directors to the sessions of the Board in 2020

Evaluation on the implementation of the Board of Directors：

3.3.2 Audit Committee （ or Attendance of Supervisors at Board Meetings ）

A. Audit Committee

Other required disclosure:

B. Attendance of Supervisors at Board Meetings: N/A, Company has Audit Committee set up in lieu of the functions of Supervisors.

3.3.3 State of Corporate Governance, Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reason

3.3.4 Remuneration Committee

A.Information on Members of Remuneration Committee

C. Remuneration Committee

3.3.5 Composition, Responsibilities and Operations of the Company's Ethical Corporate Management Committee

3.3.6 Fulfillment of Social Responsibility and Deviations from the "Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies" and Reasons

3.3.7 Implementation of Ethical Management and Measures

3.3.8 Methods of inquiry on the Corporate Governance Best Practice Principles and related regulations established by the Company:

3.3.9 Other important information for better understanding of implementation of corporate governance may be disclosed.

C. Continuing education of the Company Directors in 2020

3.3.10 Implementation of Internal Control System

A. Internal Control System Statement

Taiwan Fire & Marine Insurance Co., Ltd. Internal Control System Statement

B. CPA Review Report

CPA Internal Control System Audit Report

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

3.3.12 Key resolutions adopted by the Shareholders' Meeting and the Board of Directors in the most recent fiscal year up to the publication date of this annual report

3.4 Information on CPA service fees

Unit: Thousand NTD

Information on CPA service fees

3.5 Information on Replacement of CPA ： None.

3.7 Equity transfer or changes to equity pledge of directors or managerial officers holding more than ten percent (10%) of company shares during the year prior to the publication date of this report:

3.7.2 Information of change in equity

3.8 Information regarding the top 10 shareholders in terms of number of shares held, who are related parties or each other's spouses and relatives within the second degree of kinship

3.9 Number of shares held by the company, its directors, supervisors, managerial

Comprehensive Shareholding Percentage

、 IV Capital Overview

TFMI Annual Report 2021

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