TFMI - Interim / Quarterly Report 2021

Stock Code: 2832

Taiwan Fire & Marine Insurance Co., Ltd.

Financial Reports and ICPA’s Report Second Quarter, 2021 and 2020

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Address: 8-9F., No. 49, Guanqian Rd., Taipei 100, Taiwan (R.O.C) Tel: (02)2382-1666

§ TABLE OF CONTENTS §

ITEM I. Cover II. Table of Contents III. ICPA’s Report IV. Balance Sheet V. Statement of Comprehensive Income VI. Statements of Changes in Equity VII. Statements of Cash Flows VIII. Notes to Financial Statement (I) Company Profile (II) Date and Procedure for Authorization of Financial Statements (III) Applicability of Newly Promulgated and Amended Standard Rules and Interpretations (IV) Summary of Significant Accounting Policies (V) Major Sources of Major Accounting Judgments, Estimate and Hypotheses (VI) Important Accounting Items (VII) Related Party Transactions (VIII) Pledged Assets (IX) Major Contingent Liabilities and Commitments Made Under Unrecognized Contracts (X) Loss of Material Disaster (XI) Subsequent Events (XII) Others (XIII) Additional Disclosures 1. Information about significant transactions 2. Information related to reinvested enterprises 3. Information about investment in Mainland China 4. Information about major shareholders (XIV) Information about Segment	PAGE 1 2 3 ~ 7 8 9 ~ 10 11 12 ~ 13 14 14 14 ~ 19 20 ~ 25 25 25 ~ 68 69 ~ 74 - - - 41 ~ 46 75 ~ 105 105 105 105 105 105	NOTE NO.
		- - - - - - - 1 2 3 4 5 6 ~ 23 24 - - - 18 25 ~ 29 30 30 30 30 31

ICPA’s Report

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

Audit Opinions

We, as the CPAs, have completed the audit of the balance sheets dated June 30, 2021 and December 31 and June 30 of 2020 and the consolidated comprehensive income statement, comprehensive statement of changes in equity from April 1 to June 30 of 2021 and 2020 and from January 1 to June 30, 2021 and 2020, statements of changes in equity and statements of cash flows from January 1 to June 30 of 2021 and 2020, and notes to the financial statements (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 Accounting Standards No. 34 “Interim Financial Reporting” 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. on June 30 of 2021 and December 31 and June 30 of 2020, its financial performance between April 1 and June 30 of 2021 and 2020, and its financial performance and cash flows between January 1 and June 30 of 2021 and 2020.

Bases for the Audit Opinions

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

Key Matters Being Audited

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

Key matters being audited of the financial statement of Second Quarter of 2021 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(3)3, 5, 18, 25, 26 and 27(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 June 30, 2021 (e.g. the policies with claims and the amounts of claims each year), and regenerated the development trend of losses, estimated loss rate and key assumptions using actuarial methods, in order to assess whether the development
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trend of losses, estimated loss rate and key assumptions applied by Taiwan Fire & Marine Insurance Co., Ltd. are reasonable.

(2) Based on the regenerated development trend of losses, estimated loss rate and key assumptions, the actuarial experts of the firm has estimated the final insurance claims as of June 30, 2021, while considering the paid claims by Taiwan Fire & Marine Insurance Co., Ltd. as of June 30, 2021, to assess the reasonableness of the claim reserves.
Take the samples from reported unpaid claims as the information about claim estimate, and check whether the reported unpaid claim reserves estimated in the samples were estimated based on said information about claim estimate.

Responsibilities of Management and Governance Unit in Consolidated Financial Statement

Management is responsible for preparing an adequately expressed consolidated financial statement in accordance with the Regulations Governing the Preparation of Financial Reports by Insurance Enterprises and international financial reporting standards, international accounting standards, interpretations, and interpretation announcements approved and released to take effect by the Financial Supervisory Commission and maintaining the necessary internal controls relevant to the compilation of the consolidated financial statement in order to ensure that no significant untruthful expressions exist in the consolidated financial statement due fraud or error.

While preparing the consolidated financial statement, the management is responsible for evaluating the ability of Taiwan Fire & Marine Insurance Co., Ltd. to continue with the operation and disclosing related matters and adopting the accounting basis for continued operation, among others. Unless the management intends to liquidate Taiwan Fire & Marine Insurance Co., Ltd. or discontinue operation or there are no other actually feasible solutions than liquidation or discontinued operation.

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

CPAs Responsibilities in Auditing Consolidated Financial Statements

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

or an overview of 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 audit on the financial statement of Second Quarter of 2021 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

August 27, 2021

Taiwan Fire & Marine Insurance Co., Ltd.

BALANCE SHEET

June 30, 2021, and December 31, and June 30, 2020

Unit: NT$ Thousand

Code 11000 12100 12210 12500 12000 12600 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 6, 24) RECEIVABLES (Note 7) Notes receivable Premiums receivable Other receivables Total receivables CURRENT TAX ASSETS (Note 21) INVESTMENTS Financial assets at fair value through profit or loss (Note 8, 23) Investments accounted for using equity method (Note 11) Other financial assets - net (Note 12) Financial assets at fair value through other comprehensive income (Note 9, 10 and 23) Investment properties (Note 13) Total investments REINSURANCE CONTRACT ASSET (Note 18, 25 and 26) Claim recoverable from reinsurers - net Due from reinsurers and ceding companies Reinsurance reserve asset - net Total reinsurance contract asset PROPERTY AND EQUIPMENT (Note 14) RIGHT-OF-USE ASSETS (Note 15, 24) INTANGIBLE ASSETS DEFERRED INCOME TAX ASSETS 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 CURRENT TAX LIABILITIES (Note 21) LEASE LIABILITIES (Note 15, 24) INSURANCE LIABILITIES (Note 4, 18, 25 and 26) Unearned premium reserves Claim reserves Special reserves Premium deficiency reserves Total insurance liabilities PROVISIONS (Note 17) DEFERRED INCOME TAX LIABILITIES OTHER LIABILITIES Guarantee deposit received (Note 24) Other liabilities - others Total other liabilities Total liabilities EQUITY (Note 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		June 30,2021	% 22 - 5 1 6 - 10 1 13 22 10 56 - 1 9 10 2 - - 1 3 - 3 100 - 2 2 4 8 - - 21 17 10 - 48 1 1 - - - 58 16 - 1 1 11 11 1 23 2 42 100		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		June 30,2020
			Amount $ 4,966,463 111,245 1,038,892 125,447 1,275,584 2,609 2,139,472 275,301 2,823,651 4,972,032 2,153,234 12,363,690 19,230 137,014 1,943,022 2,099,266 460,619 42,121 10,079 129,230 701,535 61,129 762,664 $ 22,112,325 $ 2,249 518,981 434,095 758,160 1,713,485 95 64,714 4,631,862 3,768,436 2,147,526 6,635 10,554,459 81,094 264,150 39,643 36,434 76,077 12,754,074 3,622,004 1,915 97,047 98,962 2,381,521 2,556,410 233,480 5,171,411 465,874 9,358,251 $ 22,112,325			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 $ 3,908,704 115,742 470,068 142,434 728,244 - 1,944,379 221,129 2,676,807 4,430,871 2,310,122 11,583,308 19,342 180,762 1,916,842 2,116,946 353,752 41,485 5,518 32,588 711,574 44,080 755,654 $ 19,526,199 $ 3,872 127,610 446,351 769,363 1,347,196 57,122 70,900 3,474,053 2,933,792 2,131,118 7,084 8,546,047 83,851 268,604 35,199 46,942 82,141 10,455,861 3,622,004 1,915 97,047 98,962 2,381,521 2,363,331 644,693 5,389,545 40,173 ) 9,070,338 $ 19,526,199	%
							(		20 1 2 1 4 - 10 1 14 22 12 59 - 1 10 11 2 - - - 4 - 4 100 - 1 2 4 7 - - 18 15 11 - 44 1 1 - 1 1 54 18 - - - 12 12 4 28 - 46 100

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

Chairman: Steve Lee

President: Chao-Feng Chen

Chief Accountant: Pi-Chen Wang

Taiwan Fire & Marine Insurance Co., Ltd.

STATEMENT OF COMPREHENSIVE INCOME

From April 1 to June 30 of 2021 and 2020, and from January 1 to June 30 of 2021 and 2020

Unit: NT$ thousand, except earnings (loss) per share NT$

Code OPERATING REVENUES Retained earned premium 41110 Direct insurance premium revenues (Note 24, 25) 41120 Reinsurance premium revenues 41100 Premium revenues 51100 Less: Reinsurance premium outward 51310 Less: Net change in unearned premium reserves (Note 18, 25) 41130 Total retained earned premium 41300 Reinsurance commission earned 41400 Handing fee earned 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 41550 Exchange loss - investment (Note 20) 41570 Gain (loss) on investment properties (Note 20, 24) 41585 Impairment loss on investment assets (Note 20) 41800 Other operating revenues 41000 Total operating revenues OPERATING COSTS Retained claims 51200 Claims incurred (Note 24, 25) 41200 Less: Claims recovered from reinsurers 51260 Total retained claims Movement of insurance liability (Note 18, 25) 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 24, 25) 51800 Other operating cost 51000 Total operating costs		From April 1 to 2021	June 30, % 98 7 105 27 ( 14) 92 3 1 1 1 1 1 ( 1 ) 1 - - 100 58 8 50 34 1 - 35 13 1 99		From April 1 to 2020	June 30, % 118 10 128 40 2 86 4 1 2 4 2 1 ( 1 ) 1 - - 100 55 10 45 - ( 1 ) - ( 1) 16 1 61		From January 1 to 2021	June 30, % 146 6 152 31 30 91 3 1 1 2 - 1 - 1 - - 100 51 8 43 20 1 - 21 24 1 89		From January 1 to 2020	June 30,
												%
												128 9 137 44 5 88 4 1 2 1 1 - - 3 - - 100 57 13 44 2 ( 1 ) - 1 16 1 62

(To be continued)

(Continued)

Code OPERATING EXPENSES (Note 4, 17, 20 and 24) 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 (LOSS) 59000 NON-OPERATING INCOME AND EXPENSES 62000 NET INCOME (LOSS) BEFORE INCOME TAX FROM CONTINUING OPERATION 63000 INCOME TAX BENEFITS (EXPENSES) (Notes 4 and 21) 66000 CURRENT NET INCOME (LOSS) OTHER COMPREHENSIVE INCOME Items that will not be reclassified subsequently to profit or loss 83190 Equity instruments valuation profit or loss measured at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss 83290 Debt instrument profit or loss measured at fair value through other comprehensive income 83000 Other comprehensive income, net of income tax 85000 TOTAL COMPREHENSIVE INCOME IN THE PERIOD EARNINGS (LOSS) PER SHARE (Note 22) 97500 Basic earnings (loss) per share 98500 Diluted earnings (loss) per share		From April 1 to 2021	June 30, % 10 4 - 4 18 ( 17 ) - ( 17 ) 4 ( 13) 7 - 7 ( 6)		From April 1 to 2020	June 30, % 16 7 - - 23 16 - 16 ( 1) 15 23 2 25 40		From January 1 to 2021	June 30, % 14 5 - 2 21 ( 10 ) - ( 10 ) 3 ( 7) 13 ( 1) 12 5		From January 1 to 2020	June 30,
					Amount $ 211,850 96,762 279 5,445 314,336 209,193 3,518 212,711 11,358) 201,353 310,969 24,013 334,982 $ 536,335 $ 0.56 $ 0.56							%
				(								16 7 - - 23 15 - 15 ( 2) 13 ( 1 ) 1 - 13

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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Unit: NT$ Thousand

Taiwan Fire & Marine Insurance Co., Ltd. STATEMENTS OF CHANGES IN EQUITY From January 1 to June 30 of 2021 and 2020

Code A1 Balance at January 1, 2020 Appropriation of 2019 earnings B1 Appropriation of Legal reserve B5 Cash dividends distributed by the Company B17 Reversal of special Reserve D1 Net Profit from January 1 to June 30, 2020 D3 Other comprehensive income after taxes from January 1 to June 30, 2020 D5 Total comprehensive income from January 1 to June 30, 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 June 30, 2020 A1 Balance at January 1, 2021 Appropriation of 2020 earnings B5 Cash dividends distributed by the Company B17 Reversal of special Reserve D1 Net loss from January 1 to June 30, 2021 D3 Other comprehensive income after taxes from January 1 to June 30, 2021 D5 Total comprehensive income from January 1 to June 30, 2021 Q1 Disposal of equity instruments measured at fair value through other comprehensive gains and losses/Disposal of equity instruments measured at fair value through other comprehensive gains and losses by associates Z1 Balance at June 30, 2021		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 $ 756,029 ( 139,252 ) ( 362,201 ) 52,220 331,673 - 331,673 6,224 $ 644,693 $ 797,593 ( 398,421 ) 15,299 ( 264,739 ) - ( 264,739) 83,748 $ 233,480	Other Equity (Note 19) Unrealized Gain and Losses on Financial Assets at Fair Value Through Other Comprehensive Income ( $ 46,941 ) - - - - 12,992 12,992 ( 6,224) ($ 40,173) $ 108,744 - - - 440,878 440,878 ( 83,748) $ 465,874	Stockholders’ Equity	Stockholders’ Equity
						Legal reserve $ 2,242,269 139,252 - - - - - - $ 2,381,521 $ 2,381,521 - - - - - - $ 2,381,521		Special reserve $ 2,415,551 - - 52,220 ) - - - - $ 2,363,331 $ 2,571,709 - 15,299 ) - - - - $ 2,556,410
							( (		( ( ( ( (	( ( ( (	( ( (	$ 9,087,874 - 362,201 ) - 331,673 12,992 344,665 - $ 9,070,338 $ 9,580,533 398,421 ) - 264,739 ) 440,878 176,139 - $ 9,358,251

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. STATEMENTS OF CASH FLOWS

From January 1 to June 30 of 2021 and 2020

Unit: NT$ Thousand

Code CASH FLOWS FROM OPERATING ACTIVITIES A00010 Net income (loss) 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 Reversal gain on expected credit-investment A21850 Impairment loss on non-investment assets A22300 Share of gain on associates and joint ventures recognized using equity method 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 Decrease (Increase) in notes receivable A51120 Premiums receivable increase A51130 Other accounts receivable increase A51140 Increase in financial assets at fair value through profit or loss A51141 Decrease (Increase) of financial assets at fair value through other comprehensive income A51160 Decrease in other financial assets	From January 1 to June 30,2021 ( $ 359,078 ) 29,205 2,450 ( 11,114 ) ( 55,250 ) - 844 ( 53,686 ) 1,870,278 ( 125 ) 83,297 ( 36,123 ) ( 3,688 ) - 14,652 ( 4 ) ( 15,303 ) ( 634,531 ) ( 24,585 ) ( 145,533 ) 123,915 145,856	From January 1 to June 30,2020
		$ 376,434 29,396 1,531 ( 18,974 ) ( 28,322 ) ( 4,054 ) 840 ( 61,422 ) 163,573 ( 83 ) 6,863 ( 4,240 ) ( 29,180 ) ( 3,432 ) 10,181 ( 32 ) 5,094 ( 74,623 ) ( 22,424 ) ( 150,705 ) ( 36,651 ) 279,343

(To be continued)

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(Continued)

Code A51170 Decrease (Increase) in reinsurance contract asset A51990 Increase in other assets A52120 Increase (Decrease) in Claims Payable A52140 Increase in commissions payable A52150 Increase in due to reinsurers and ceding companies A52160 Decrease in other payables A52200 Decrease in employees’ benefit liability A52990 Increase (Decrease) in Other Liabilities A33000 Cash inflow from operations A33100 Interest received A33200 Dividends received A33500 Income tax paid AAAA Net cash inflow from operating activities CASH FLOWS FROM INVESTING ACTIVITIES B02700 Payments for property and equipment B03800 Decrease in refundable deposits B04500 Payments for intangible assets B05400 Payments for investment properties B05500 Proceeds from disposal of investment properties BBBB Net cash inflow from investing activities CASH FLOWS FROM FINANCING ACTIVITIES C03000 Increase in guarantee deposits received C03100 Decrease in guarantee deposits received C04020 Repayment of the principal of the lease liabilities CCCC Net cash outflow used in financing activities EEEE NET 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	From January 1 to June 30,2021 $ 36,612 ( 22,798 ) 2,249 380,052 65,100 ( 126,481 ) ( 1,284 ) ( 6,591) 1,258,336 36,791 11,067 ( 42,047) 1,264,147 ( 3,802 ) 15,815 ( 2,572 ) ( 1,165 ) 21,297 29,573 4,744 - ( 16,531) ( 11,787) 1,281,933 3,684,530 $ 4,966,463	From January 1 to June 30,2020	From January 1 to June 30,2020
	( ( ( ( ( ( ( ( ( (	( ( ( ( ( ( ( ( ( ( ( (	$ 65,872 ) 5,756 ) 532 ) 1,498 55,919 56,658 ) 276 ) 10,772 378,208 42,949 9,025 61,357) 368,825 787 ) 20,619 2,341 ) 256 ) 123,619 140,854 - 63 ) 16,205) 16,268) 493,411 3,415,293 $ 3,908,704

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

Chairman: Steve Lee

President: Chao-Feng Chen

Chief Accountant: Pi-Chen Wang

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Taiwan Fire & Marine Insurance Co., Ltd.

Notes to Financial Statement

From January 1 to June 30 of 2021 and 2020

(Expressed in Thousand New Taiwan Dollars unless specified otherwise)

I. Company profile

Taiwan Fire & Marine Insurance Co., Ltd. (“Company”) was established in March 1948 as a non-life insurer. The products offered by the Company include aviation insurance, fire insurance, marine insurance, casualty insurance, automobile insurance, as well as the reinsurances for the abovementioned insurances. The headquarters is located in Taipei, with 10 branches and dozens of service centers throughout Taiwan. At the establishment, the paid-up capital was 10 million Old Taiwanese Dollars. Through several capital increases, as of June 30, 2021, the paid-up capital is NT$3,622,004 thousand.

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

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

II. Date and procedure for authorization of financial statements

The financial statements were approved by the Board of Directors on August 27, 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.
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(II) IFRSs approved by FSC applied as of 2022

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

Note 1: The amendments to IFRS 9 are applicable to the exchanges of financial liabilities or amendments to terms and conditions incurring during the annual reporting period as of January 1, 2022. The amendments to IAS 41 “Agriculture” are applicable to the measurement of fair value during the annual reporting period as of January 1, 2022. The amendments to IFRS 1 “First-time Adoption of International Financial Reporting Standards (IFRSs)” are applicable retroactively during the annual reporting period as of January 1, 2022.
Note 2: The amendments are applicable to the merges of enterprises whose annual reporting periods commence as of January 1, 2022.
Note 3: The amendments are applicable to the plant, property and equipment bringing an asset into the location and condition necessary for it to be capable of operating in the manner intended by the management as of January 1, 2021.
Note 4: The amendments are applicable to the contracts which have not yet fulfilled all obligations therein by January 1, 2022.
(III) IFRSs issued by IASB but not yet approved and issued to be effective by FSC

The effective date Newly Issued/ Amended/ Revised Standards and promulgated by IASB Interpretations (Note 1) “Sale or Contribution of Assets between an Investor To be determined and its Associate or Joint Venture”, amendments to IFRS 10 and IAS 28. IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IAS 1, “Classification of Liabilities January 1, 2023 as Current or Non-Current” Amendments to IAS 1, “Disclosure of Accounting January 1, 2023 (Note 2) Polices”

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Newly Issued/ Amended/ Revised Standards and Interpretations Amendments to IAS 8, “Definition of Accounting Estimates” Amendments to IAS 12, “Deferred Tax Related to Assets and Liabilities Arising from A Single Transaction”	The effective date promulgated by IASB (Note 1)
	January 1, 2023 (Note 3) January 1, 2023 (Note 4)

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

Note 2: The annual reporting period beginning after January 1, 2023 is prospectively applicable to this amendment.
Note 3: The changes in accounting estimates and accounting policies arising during the annual period beginning after January 1, 2023 are retrospectively applicable to this amendment.
Note 4: Except recognition of the deferred income tax for the temporary differences of lease and decommission obligation on January 1, 2022, the amendments apply to transactions taking place after January 1, 2022.

IFRS 17 “Insurance Contracts” and Related Amendments

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

Level of Aggregation of Insurance Contracts

The Company shall identify portfolios of insurance contracts. A portfolio comprises contracts subject to similar risks and managed together. Contracts within a 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.
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The Company shall only divide groups into those including only contracts issued within a year, and shall apply the rules of recognitions and measurements of IFRS 17 to these contracts decided to be issued.

Recognition

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

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

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increasingly onerous) when subsequently measured, the losses shall be recognized immediately.

Onerous Contract

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

Premium Allocation Approach

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

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

Discretionary Participation Feature Investment Contract

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

Modification and Derecognition

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

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

Transitional Regulations

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

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

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

Except the abovementioned 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.

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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 IAS 34 “Interim Financial Reporting” approved by FSC. This financial report does not include all the IFRS disclosures required by the annual financial statement.

(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) Other material accounting policies

Other than the following notes, please refer to the aggregated descriptions of the material accounting policies in the 2020 Annual Financial Report

Defined post-employment benefits

The interim pension costs applies the pension cost rate determined via actuarial on the end date of the previous year, and are calculated based on the period from the beginning of the year to the end of the period. The adjustments will be made for the material movement of the market during the period, major plan revision, repayment, or other material one-time matters.

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. The interim income tax is evaluated based on the year; the tax rate applicable to the expected total annual earning is applied to calculate the interim pre-tax incomes.

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3. 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 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:

(1) Unearned premium reserves

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

(2) 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

(3) 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:

A. Special reserves for material accidents.
B. Special reserves for hazard changes.
C. 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.

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

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

A. 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

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be assess and prepared by the certified actuaries, and submitted to the competent authorities for reference and then further implemented.

B. Special reserves for hazard changes

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

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

When the special reserves for hazard changes of commercial earthquake insurance accumulates to more than 18 times of the retained earned premium of the year, the special reserves for hazard changes of typhoon and flood insurance accumulates to more than 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.

C. 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.”

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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 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.

(4) 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.

(5) 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

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amount of such deficiency shall be provided as the liabilities adequacy reserves.

(6) 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.

V. Major sources of major accounting judgments, estimate and hypotheses

Except the following notes, please refer to the material accounting judgment, estimates, and the major sources of uncertainties for the estimates specified in the 2020 Annual Financial Report.

Claim liabilities arising from insurance contracts

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

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)	June 30,2021 $ 45,582 3,203,900 1,448,551 335,200 ( 66,770) $ 4,966,463	December 31, 2020 $ 31,015 2,352,720 1,048,190 340,190 ( 87,585) $ 3,684,530	June 30,2020
	(		(	$ 31,400 2,691,845 599,162 654,090 67,793) $ 3,908,704

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

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VII.	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 Interest receivable Other receivable Stock dividends receivable Proceeds receivable from sale of investments Other receivable - Non-accrual loan Less: allowance loss Other receivables	June 30,2021 0.06% ~ 0.41% 0.18% ~ 0.21% June 30,2021 $ 112,369 13 ( 1,137) $ 111,245 $ 316,189 813,140 ( 90,437) $ 1,038,892 $ 75,218 24,002 3,354 6,975 26,107 ( 10,209) $ 125,447	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 $ 58,323 13,133 - - 19,366 ( 6,833) $ 83,989	June 30,2020	June 30,2020
				0.06% ~ 0.43% 0.27% ~ 0.30% June 30,2020
		( ( (	( ( (	( ( (	$ 116,911 3 1,172) $ 115,742 $ 436,189 47,961 14,082) $ 470,068 $ 73,434 52,590 10,999 - 8,318 2,907) $ 142,434

(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/

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Non-accrual Loans” and simplified method of IFRS 9, or of the lifetime. The lifetime expected credit losses are calculated using the reserve matrix, by considering the past default records and the current financial position of clients, industrial economic situations, as well as the GDP forecast and industrial outlooks. As the credit loss history of the Company shows that there is no significant difference among the loss patterns of different client groups, the reserve matrix does not further divide the client groups, but only establish the expected credit losses based on the aging of receivables.

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

The Company recognizes the allowance loss for receivables as the higher expected credit losses between the “Regulations Governing the Procedures for Insurance Enterprises to Evaluate Assets and Deal with Non-performing/Non-accrual Loans,” or from the reserve matrix. The movement for the allowance loss for the receivables during January 1 to June 30, 2021 and 2020 are as follows:

June 30, 2021

June 30, 2021
Balance - beginning Add: Provision of the period Balance - ending June 30, 2020		12-month expected credit loss I	L	ifetime expected credit loss II	L	ifetime expected credit loss III	Impairment provided based in IFRS 9		Impairment based on the “Regulations Governing the Procedures for Insurance Enterprises to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”			Total
		$ 853 2,042 $ 2,895		$ 1,214 57,942 $ 59,156		$ 520 1,221 $ 1,741		$ 2,587 61,205 $ 63,792		$ 15,448 22,543 $ 37,991		$ 18,035 83,748 $ 101,783

June 30, 2020
Balance - beginning Add: Provision (reversal) in the period Balance - ending		12-month expected credit loss I	L	ifetime expected credit loss II	L	ifetime expected credit loss III	Impairment provided based in IFRS 9		Impairment based on the “Regulations Governing the Procedures for Insurance Enterprises to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”			Total
	(	$ 3,195 2,220) $ 975		$ 2,735 1,499 $ 4,234		$ 825 347 $ 1,172	(	$ 6,755 374) $ 6,381		$ 5,480 6,300 $ 11,780		$ 12,235 5,926 $ 18,161

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The allowance loss as of June 30, 2021 and 2020 increased by NT$83,748 thousand and increased by NT$5,926 thousand, respectively, mainly as a result of the net increase of NT$794,241 thousand and net increased of NT$17,815 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$13 thousand, NT$85,273 thousand, and NT$9,970 thousand, respectively, as of June 30, 2021.

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

For the notes receivable, premium receivable, and non-accrual loans in other receivables, the allowances have been provided as NT$3 thousand, NT$9,893 thousand, and NT$2,634 thousand, respectively, as of June 30, 2020.

(III) The ageing analysis for the receivables

0–30 days 31–90 days 91–180 days 181–365 days More than 365 days Total	June 30,2021 $ 393,145 144,992 809,688 15,700 13,842 $ 1,377,367	December 31, 2020 $ 639,660 19,574 7,283 7,717 9,261 $ 683,495	June 30,2020	June 30,2020
				$ 578,574 111,598 40,622 14,439 1,172 $ 746,405

The aging analysis is conducted based on the accounted dates.

VIII. Financial instruments measured at fair values through profit and/or loss

Held for transaction purposes - TWSE/GTSM listed shares - Beneficiary certificates of funds Compulsory measurement at fair value through profit and loss - Domestic financial bonds - Domestic corporate bonds	June 30,2021 $ 203,705 310,223 1,103,931 521,613 $ 2,139,472	December 31, 2020 $ 204,920 156,780 1,054,592 522,397 $ 1,938,689	June 30,2020	June 30,2020
				$ 227,506 130,645 1,054,316 531,912 $ 1,944,379

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IX. Financial assets at fair value through other comprehensive income

June 30,2021 Equity instruments at fair value through other comprehensive income $ 4,004,478 Bond instruments measured at fair value through other comprehensive income 1,579,174 Deductible of refundable deposits ( 611,620) $ 4,972,032 (I) Investments in equity instruments June 30,2021 Domestic investment TWSE/TPEx-listed shares and emerging shares $ 3,575,975 Unlisted Shares 428,503 $ 4,004,478	December 31, 2020 $ 3,668,717 1,612,245 ( 622,187) $ 4,658,775 December 31, 2020 $ 3,310,661 358,056 $ 3,668,717	June 30,2020	June 30,2020
		$ 3,326,811 1,721,196 ( 617,136) $ 4,430,871 June 30,2020
			$ 2,945,246 381,565 $ 3,326,811

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.

During January 1 to June 30, 2021, the Company adjusted the investment positions to diversify risks, and the sold part of common shares at fair value for NT$520,485 thousand; the related other equity - unrealized gain and losses on financial assets at fair value through profit or loss, NT$83,748 thousand has been transferred to the retained earnings.

The Company recognized the dividend revenues, NT$10,839 thousand, NT$18,528 thousand, NT$11,114 thousand, and NT$18,528 thousand, from April 1 to June 30, 2021 and 2020 and from January 1 to June 30, 2021 and 2020. The amounts related to derecognized investments at the end of the period were NT$728 thousand, NT$0 thousand, NT$728 thousand, and NT$0 thousand, and the amounts related to the investment held on June 30, 2021 and 2020 were NT$10,111 thousand, NT$18,528 thousand, NT$10,386 thousand, and NT$18,528 thousand.

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(II) 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	June 30,2021 $ 611,620 49,997 103,818 ( 611,620) 153,815 139,160 674,579 813,739 $ 967,554	December 31, 2020 $ 622,187 49,998 104,110 ( 622,187) 154,108 142,258 693,692 835,950 $ 990,058	June 30,2020	June 30,2020
	(	(	(	$ 617,136 150,095 104,407 617,136) 254,502 148,002 701,556 849,558 $ 1,104,060

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.

X. Credit risks management for Investments in liability instruments

Bond instruments investment accounted as financial assets at fair value through other comprehensive income:

June 30, 2021

June 30, 2021
Total of Carrying Amount Allowance loss Amortized cost Adjustment to fair value Deductible of refundable deposits	At fair value through other comprehensive income
	( (	$ 1,502,954 759) 1,502,195 76,979 1,579,174 611,620) $ 967,554

December 31, 2020

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

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June 30, 2020

June 30, 2020
Total of Carrying Amount Allowance loss Amortized cost Adjustment to fair value Deductible of refundable deposits	At fair value through other comprehensive income
	( (	$ 1,635,821 1,179) 1,634,642 86,554 1,721,196 617,136) $ 1,104,060

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

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

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

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

June 30, 2021

June 30, 2021
Credit Rating Normal Abnormal Default Write Off	Expected Credit Loss(ECL) 0.000% ~ 0.4997% (Note) (Note) (Note)	June 30, 2021 Total of Carrying Amount
		$ 1,502,954 - - -

December 31, 2020

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

June 30, 2020

June 30, 2020
Credit Rating Normal Abnormal Default Write Off	Expected Credit Loss(ECL) 0.002% ~ 0.8996% (Note) (Note) (Note)	June 30, 2020 Total of Carrying Amount
		$ 1,635,821 - - -

(Note): The credit level of the bond investments as of June 30, 2021, and December 31 and June 30, 2020 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.	Credit Rating Normal (12-month expected credit loss) Abnormal (Lifetime expected credit loss whose credit not impaired) Default (Lifetime expected credit loss exists and the credit is impaired) Balance at January 1, 2021 $ 884 $ - $ - Purchase of New Liability Instruments 17 - - Derecognition ( 30 ) - - Exchange rate and other movement ( 112) - - Allowance loss on June 30, 2021 $ 759 $ - $ - Balance at January 1, 2020 $ 1,262 $ - $ - Derecognition ( 15 ) - - Exchange rate and other movement ( 68) - - Allowance loss on June 30, 2020 $ 1,179 $ - $ - Investment under equity method June 30,2021 December 31, 2020 June 30,2020 Investments in associates $ 275,301 $ 242,485 $ 221,129 Summarization About Associates With Immateriality Information Percentage of the shareholdingand votingrights CompanyName June 30,2021 December 31, 2020 June 30,2021 Top Taiwan X Venture Capital Co., Ltd. 24.75% 24.75% 24.75% From April 1 to June 30,2021 From April 1 to June 30,2020 From January 1 to June 30,2021 From January 1 to June 30,2020 Shares Vested in the Company Net profit for the period from continuing operations $ 22,482 $ 9,632 $ 36,123 $ 4,240 Other comprehensive income - - - - Total comprehensive income $ 22,482 $ 9,632 $ 36,123 $ 4,240	Credit Rating
				Default (Lifetime expected credit loss exists and the credit is impaired)
				$ - - - - $ - $ - - - $ - June 30,2020
				June 30,2021
					24.75% From January 1 to June 30,2020 $ 4,240 - $ 4,240
			$ 36,123 - $ 36,123			$ 4,240 - $ 4,240

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

XII. Other financial assets - net

								December	December	December	December	31,
			June	30,		2021				2020			June		30,2020
Time deposit with initial
maturity date more than
three months away			$ 2,846,796						$	2,987,652			$	2,703,452
Less: Deductible of the
Refundable Deposits
(Note 16)			(	23,145)				(			18,145)		(		26,645)
			$ 2,823,651						$	2,969,507			$	2,676,807
Investment properties
								December				31,
			June	30,		2021				2020			June		30,2020
Investment Properties
Completed			$ 2,135,336						$	2,265,866			$	2,286,239
Right-of-use assets				17,898							20,891				23,883
			$ 2,153,234						$	2,286,757			$	2,310,122
						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			-					256				-			256
Disposition	(	53,413 )		(			45,349		)			-	(		98,762 )
Transferred to property
and equipment	(	28,735 )		(			10,599		)			-	(		39,334 )
Transferred from property
and equipment		28,735					10,599					-			39,334
Balance at June 30, 2020	$	2,067,317			$	464,524				$		32,861		$	2,564,702
Accumulated Depreciation
Balance at January 1,
2020	$		-		$	243,245				$		5,985		$	249,230
Depreciation expense			-					6,623				2,993			9,616
Disposition			-	(				4,323	)			-	(		4,323 )
Transferred to property
and equipment			-	(				6,886	)			-	(		6,886 )
Transferred from property
and equipment			-					6,943				-			6,943
Balance at June 30, 2020	$		-		$	245,602				$		8,978		$	254,580
Net at June 30, 2020	$	2,067,317			$	218,922				$		23,883		$	2,310,122

XIII. Investment properties

(To be continued)

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(Continued)

Cost Balance at January 1, 2021 Increase Disposition Transferred to Property and equipment Balance at June 30, 2021 Accumulated Depreciation Balance at January 1, 2021 Depreciation expense Disposition Transferred to Property and equipment Balance at June 30, 2021 Net at June 30, 2021	Land $ 2,061,650 - ( 7,377 ) ( 73,560) $ 1,980,713 $ - - - - $ - $ 1,980,713	House and building $ 455,752 1,165 ( 11,523 ) ( 38,217) $ 407,177 $ 251,536 6,531 ( 1,291 ) ( 4,222) $ 252,554 $ 154,623		Right-of-use assets $ 32,861 - - - $ 32,861 $ 11,970 2,993 - - $ 14,963 $ 17,898	Total
					$ 2,550,263 1,165 ( 18,900 ) ( 111,777) $ 2,420,751 $ 263,506 9,524 ( 1,291 ) ( 4,222) $ 267,517 $ 2,153,234

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 has severely affected the market economy in 2021, before the national epidemic alert standard was adjusted as Level 3, the Company agreed that certain lease contracts may cut rent by 5% from April to December 2021, and by 30%–40% from May 18 to August 17, 2021 after the national epidemic alert standard was adjusted as Level 3. Notwithstanding, as the national epidemic alert standard was adjusted as Level 2 or below before August 17, 2021, the monthly rent was adjusted back to the same amount applicable before the national epidemic alert standard was adjusted as Level 3 as of the date following the degrading of the national epidemic alert standard. The effects of said amount have been NT$3,220 thousand in total until June 30, 2021.

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.

35 -

The fair value of the investment properties as of December 31, 2020 and 2019 were NT$4,586,157 thousand and NT$4,597,915 thousand (exclusive of right-of-use assets). The fair value was measured at the level 3 inputs at each balance sheet date by the independent appraising companies, Affluence Real Estate Appraiser Firm and Y.C.R.E., respectively. The appraisal was evaluated based 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, namely 0.82%–5.00% and 0.83%–6.00%. Upon evaluation by the Company's management, the fair values substantially remained unchanged on June 30, 2021 and 2020.

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

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

From January 1 to June 30, 2021, the Company disposed of the investment property including the land and buildings at Section 5, Roosevelt Road, Taipei City, and the land at Small Section 3, Xinglong Section, Wenshan District, Taipei City, generated the proceeds totaling NT$21,297 thousand (after tax). Less the book value, NT$17,609 thousand, the gains from the disposal became NT$3,688 thousand, stated as the operating revenue-gain (loss) on investment properties.

36 -

From January 1 to June 30, 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$79,274 thousand (after tax). Less the book value, NT$56,583 thousand, the gains from the disposal became NT$22,691 thousand, stated as the operating revenue-gain (loss) on investment properties.

From January 1 to June 30, 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$44,345 thousand (before tax). Less the book value, NT$37,856 thousand, the gains from the disposal became NT$6,489 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	June 30,2021 $ 118,253 99,393 75,585 55,063 27,301 91,148 $ 466,743	December 31, 2020 $ 109,829 87,388 56,701 42,640 10,460 2,659 $ 309,677	June 30,2020	June 30,2020
				$ 113,178 98,515 68,067 48,140 28,167 4,471 $ 360,538

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XIV. Property and equipment

Cost Balance at January 1, 2020 Increase Disposition Transferred from investment properties Transferred to investment properties Balance at June 30, 2020 Accumulated Depreciation Balance at January 1, 2020 Depreciation expense Disposition Transferred from investment properties Transferred to investment properties Balance at June 30, 2020 Net at June 30, 2020 Cost Balance at January 1, 2021 Increase Transferred from investment properties Balance at June 30, 2021 Accumulated Depreciation Balance at January 1, 2021 Depreciation expense Transferred from investment properties Balance at June 30, 2021 Net at June 30, 2021		Own land	Buildings and ancillary equipment	Buildings and ancillary equipment		Computer equipment		Traffic and transport equipment	Other equipment	Leasehold improvements	Leasehold improvements	Total
	(	$ 261,774 - - 28,735 28,735) $ 261,774 $ - - - - - $ - $ 261,774 $ 261,774 - 73,560 $ 335,334 $ - - - $ - $ 335,334	( (	$ 164,730 - - 10,599 10,599) $ 164,730 $ 94,056 1,698 - 6,886 6,943) $ 95,697 $ 69,033 $ 166,942 - 38,217 $ 205,159 $ 97,354 1,948 4,222 $ 103,524 $ 101,635	( (	$ 30,688 595 42 ) - - $ 31,241 $ 15,738 3,068 42 ) - - $ 18,764 $ 12,477 $ 29,874 2,386 - $ 32,260 $ 14,938 3,080 - $ 18,018 $ 14,242		$ 8,949 - - - - $ 8,949 $ 5,307 581 - - - $ 5,888 $ 3,061 $ 8,537 267 - $ 8,804 $ 5,891 436 - $ 6,327 $ 2,477	$ 10,839 192 ( 748 ) - - $ 10,283 $ 6,142 827 ( 748 ) - - $ 6,221 $ 4,062 $ 8,970 479 - $ 9,449 $ 4,700 644 - $ 5,344 $ 4,105		$ 10,889 - - - - $ 10,889 $ 6,237 1,307 - - - $ 7,544 $ 3,345 $ 7,726 670 - $ 8,396 $ 4,534 1,036 - $ 5,570 $ 2,826	$ 487,869 787 ( 790 ) 39,334 ( 39,334) $ 487,866 $ 127,480 7,481 ( 790 ) 6,886 ( 6,943) $ 134,114 $ 353,752 $ 483,823 3,802 111,777 $ 599,402 $ 127,417 7,144 4,222 $ 138,783 $ 460,619

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, 2020 Increase Decrease in the period Balance at June 30, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation expense Decrease in the period Balance at June 30, 2020 Net at June 30, 2020 Cost Balance at January 1, 2021 Increase Decrease in the period Balance at June 30, 2021 Accumulated depreciation and impairment Balance at January 1, 2021 Depreciation expense Decrease in the period Balance at June 30, 2021 Net at June 30, 2021		Building $ 50,762 18,090 5,071) $ 63,781 $ 20,550 11,168 4,864) $ 26,854 $ 36,927 $ 69,820 7,072 6,500) $ 70,392 $ 27,171 11,024 6,213) $ 31,982 $ 38,410		Transport equipment $ 8,074 1,983 3,005) $ 7,052 $ 4,154 1,131 2,791) $ 2,494 $ 4,558 $ 7,052 2,122 - $ 9,174 $ 3,950 1,513 - $ 5,463 $ 3,711		Total
	( ( ( (		( (		( ( ( (	$ 58,836 20,073 8,076) $ 70,833 $ 24,704 12,299 7,655) $ 29,348 $ 41,485 $ 76,872 9,194 6,500) $ 79,566 $ 31,121 12,537 6,213) $ 37,445 $ 42,121

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	June 30,2021 December 31, 2020 June 30,2020 $ 64,714 $ 71,498 $ 70,900 From April 1 to June 30,2021 From April 1 to June 30,2020 From January 1 to June 30,2021 From January 1 to June 30,2020 $ 406 $ 420 $ 844 $ 840	June 30,2020
			$ 70,900 From January 1 to June 30,2020
				$ 840

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Discount rates for the lease liabilities are as the following:

Land Building Transport equipment	June 30,2021 2.616% 2.366%~2.616% 2.366%~2.616%	December 31, 2020 2.616% 2.366%~2.616% 2.366%~2.616%	June 30,2020
			2.616% 2.366%~2.616% 2.366%~2.616%

(III) Major lessee activities and terms and conditions

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

(IV) Other information of leases

Short-term lease expenses Low-valued asset lease expenses Total amount of cash (outflow) of lease	From April 1 to June 30,2021 $ 5 $ 3	From April 1 to June 30,2020 $ 29 $ 35	From January 1 to June 30,2021	From January 1 to June 30,2021	From January 1 to June 30,2020 $ 64 $ 39 ($ 16,205)	From January 1 to June 30,2020 $ 64 $ 39 ($ 16,205)
			(	$ 6 $ 237 $ 16,531)		$ 64 $ 39 $ 16,205)

XVI. Refundable deposit

Refundable deposit
Refundable deposit Bond of Insurance Enterprises Bond of Litigation Others	June 30,2021 $ 611,620 12,377 77,538 $ 701,535	December 31, 2020 $ 622,187 18,377 87,353 $ 727,917	June 30,2020
				$ 617,136 3,337 91,101 $ 711,574

(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.

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(II) The Company has furnished the following assets to secure legal actions and others on June 30, 2021, and December 31 and June 30, 2020, respectively.

XVII.	Other financial assets - Time deposits Cash and cash equivalents Reserve for liabilities Net defined benefit liability	June 30,2021 $ 23,145 66,770 $ 89,915 June 30,2021 $ 81,094	December 31, 2020 $ 18,145 87,585 $ 105,730 December 31, 2020 $ 82,378	June 30,2020	June 30,2020
				$ 26,645 67,793 $ 94,438 June 30,2020
					$ 83,851

The pension expense related to the defined benefit program are calculated at the pension cost rate determined via actuarial on December 31 of 2020 and 2019, and recognized into the following titles in respective periods:

XVIII.	From April 1 to June 30, 2021 Operating Expenses $ 476 Reinsurance contract asset and insurance	From April 1 to June 30, 2020 $ 542 liabilities	From January 1 to June 30, 2021 $ 952	From January 1 to June 30, 2020	From January 1 to June 30, 2020
					$ 1,084

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	June 30,2021 $ 19,327 ( 97) $ 19,230 $ 141,662 9,778 ( 14,426) $ 137,014	December 31, 2020 $ 21,187 ( 106) $ 21,081 $ 174,240 11,734 ( 14,958) $ 171,016	June 30,2020	June 30,2020
	( (	( (	( (	$ 19,439 97) $ 19,342 $ 181,825 11,673 12,736) $ 180,762

(To be continued)

41 -

(Continued)

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	June 30,2021 $ 892,975 1,050,361 ( 314) $ 1,943,022 $ 4,631,862 3,768,436 2,147,526 6,635 $10,554,459	December 31, 2020 $ 802,184 925,404 ( 314) $ 1,727,274 $ 3,447,801 2,894,345 2,118,699 7,588 $ 8,468,433	June 30,2020	June 30,2020
	(	(	(	$ 878,642 1,039,055 855) $ 1,916,842 $ 3,474,053 2,933,792 2,131,118 7,084 $ 8,546,047

(I) Less benefits & claims recovered from reinsurers

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

42 -

Assets and Deal with Non-performing/Non-accrual Loans,” and all the due from reinsurers overdue for nine months are transferred to the non-accrued loans.

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

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

Balance at January 1, 2020 Add: Provision of the period Less: Reversal in the current period Balance at June 30, 2020 Balance at January 1, 2021 Add: Provision of the period Less: Reversal in the current period Balance at June 30, 2021	Impairment loss by individual assessment $ 7,928 1,204 - $ 9,132 $ 11,211 - ( 2,766) $ 8,445	Impairment loss by group assessment $ 3,968 - ( 267) $ 3,701 $ 3,853 2,225 - $ 6,078		Total
	(	(	( (	$ 11,896 1,204 267) $ 12,833 $ 15,064 2,225 2,766) $ 14,523

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

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

As of June 30, 2021, the impairment or unrecoverable amount has been evaluated for the due from reinsurers and ceding companies, and the allowance for loss has been provided as NT$8,445 thousand.

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

As of June 30, 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$9,132 thousand.

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(V) Reinsurance reserve asset and insurance liabilities

Movement of increase/decrease for reinsurance reserve assets and insurance liabilities during January 1 to June 30, 2021:

Reinsurance reserve asset- net Ceding unearned premium reserves Total amount Recognized impairment loss Ceding claims reserves Reported but not yet paid Not yet reported Recognized impairment loss Total of Reinsurance reserve asset Insurance liabilities Unearned premium reserves Claim reserves Reported but not yet paid Not yet reported Special reserves Special reserves for material accidents Special reserves for hazard changes Other special reserves Premium deficiency reserves Total insurance liabilities		January 1, 2021 $ 802,184 - 802,184 557,847 367,557 314) 925,090 $ 1,727,274 $ 3,447,801 1,858,918 1,035,427 2,894,345 178,008 796,548 1,144,143 2,118,699 7,588 $ 8,468,433		Provision of the Period $ 662,940 - 662,940 684,023 366,338 - 1,050,361 $ 1,713,301 $ 3,687,387 2,286,748 1,481,688 3,768,436 - - 32,873 32,873 6,635 $ 7,495,331		Recovery of the Period $ 572,149 - 572,149 557,847 367,557 - 925,404 $ 1,497,553 $ 2,503,326 1,858,918 1,035,427 2,894,345 4,046 - - 4,046 7,588 $ 5,409,305		Others $ - - - - - - - $ - $ - - - - - - - - - $ -	June 30,2021	June 30,2021
	(								(	$ 892,975 - 892,975 684,023 366,338 314) 1,050,047 $ 1,943,022 $ 4,631,862 2,286,748 1,481,688 3,768,436 173,962 796,548 1,177,016 2,147,526 6,635 $ 10,554,459

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Movement of increase/decrease for reinsurance reserve assets and insurance liabilities during January 1 to June 30, 2020:

Reinsurance reserve asset- net Ceding unearned premium reserves Total amount Recognized impairment loss Ceding claims reserves Reported but not yet paid Not yet reported Recognized impairment loss Total of Reinsurance reserve asset Insurance liabilities Unearned premium reserves Claim reserves Reported but not yet paid Not yet reported Special reserves Special reserves for material accidents Special reserves for hazard changes Other special reserves Premium deficiency reserves Total insurance liabilities		January 1, 2020 $ 751,510 - 751,510 667,090 369,723 4,287) 1,032,526 $ 1,784,036 $ 3,215,885 1,848,738 1,039,374 2,888,112 186,099 796,548 1,159,302 2,141,949 7,154 $ 8,253,100		Provision of the Period $ 701,275 - 701,275 670,594 368,461 - 1,039,055 $ 1,740,330 $ 2,638,559 1,901,511 1,032,281 2,933,792 - - 9,809 9,809 7,084 $ 5,589,244		Recovery of the Period $ 574,143 - 574,143 667,090 369,723 - 1,036,813 $ 1,610,956 $ 2,380,391 1,848,738 1,039,374 2,888,112 4,046 - 16,594 20,640 7,154 $ 5,296,297		Others $ - - - - - 3,432 3,432 $ 3,432 $ - - - - - - - - - $ -	June 30,2020	June 30,2020
	(								(	$ 878,642 - 878,642 670,594 368,461 855) 1,038,200 $ 1,916,842 $ 3,474,053 1,901,511 1,032,281 2,933,792 182,053 796,548 1,152,517 2,131,118 7,084 $ 8,546,047

Note: According to the “Directions for Strengthening Natural Disaster Insurance

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

Considering that the COVID-19 epidemic, the direct insurance premium revenues from the “notifiable infectious disease epidemic prevention insurance” amounted to NT$1.87 billion and claims payable therefrom amounted to NT$330 million from January 1 to June 30, 2021, and stated claim reserves therefrom

45 -

amounted to NT$720 million until June 30, 2021. The claims payable from such product amounted to NT$950 million from July 1 to August 27, 2021.

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.

During January 1 to June 30, 2021, the summary of effects to which the enhancing disaster reserve mechanism, and reserves of enhancing residential earthquake and nuclear energy insurance are listed as follows:

Amount applied Amount not applied Effects	Net Profit for thePeriod ( $ 264,739 ) ( 267,975) $ 3,236	Earnings Per Share (EPS) ( $ 0.73 ) ( 0.74) $ 0.01		Total Liabilities $ 12,754,074 11,553,259 $ 1,200,815		Equity
					(	$ 9,358,251 10,415,026 $ 1,056,775)

During January 1 to June 30, 2020, the summary of effects to which the enhancing disaster reserve mechanism, and reserves of enhancing residential earthquake and nuclear energy insurance are listed as follows:

Amount applied Amount not applied Effects		Net Profit for thePeriod $ 331,673 328,437 $ 3,236		Earnings Per Share (EPS) $ 0.92 0.91 $ 0.01		Total Liabilities $ 10,455,861 9,246,955 $ 1,208,906		Equity
							(	$ 9,070,338 10,120,640 $ 1,050,302)

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XIX. Equity

(I) Capital

Common Stock

Common Stock
Authorized shares (thousand shares) Authorized capital The number of issued and outstanding shares with paid-in capital (thousand shares) Issued and outstanding share capital 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	June 30,2021 600,000 $ 6,000,000 362,200 $ 3,622,004 June 30,2021 $ 1,915 97,047 $ 98,962	December 31, 2020 600,000 $ 6,000,000 362,200 $ 3,622,004 December 31, 2020 $ 1,915 97,047 $ 98,962	June 30,2020
			600,000 $ 6,000,000 362,200 $ 3,622,004 June 30,2020
				$ 1,915 97,047 $ 98,962

(II) Capital surplus

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

47 -

dividends and bonuses, in whole or in part, are paid in cash after a resolution has been adopted by a majority votes at a meeting of the Board of Directors attended by 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 June 30, 2021 and 2020, the net provision was NT$146,719 thousand and NT$82,351 thousand, respectively. The net provision as of December 31, 2020 was NT$172,097 thousand.

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

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approved by FSC before the shareholders’ meeting, the legal reserve and capital surplus may be distributed in cash based on Article 241 of the Company Act.

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

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 the latest period 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 no other fact showing any material internal control defect or possible hurdle to healthy operations.

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

following:

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

Said cash dividends have been allocated upon resolution of the Board of Directors on March 26, 2021 and March 20, 2020. The remainder of the 2019 earnings will be disposed of per the resolution made at the general shareholders' meeting on June 12, 2020. In response to the “related policies on adjournment of shareholders’ meetings of public companies in response to the epidemic” published

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by FSC, the Company suspended the shareholders’ meetings initially scheduled. The allocation of the remainder of the 2020 earnings was passed per resolution of the general shareholders’ meeting convened on August 20, 2021.

(IV) Special reserve

The changes in the special reserve from January 1 to June 30, 2021 and 2020 are stated as follows:

stated as follows:
Balance at January 1, 2020 Provision of the period Recovery of the Period Balance at June 30, 2020 Balance at January 1, 2021 Provision of the period Recovery of the Period Balance at June 30, 2021		Special reserves $ 1,735,507 - 41,672) $ 1,693,835 $ 1,907,604 - 10,458) $ 1,897,146	Provisions by initial application of IFRSs $ 671,714 - ( 10,548) $ 661,166 $ 657,447 - ( 4,841) $ 652,606	Special reserve form fin-tech employee transformation $ 8,330 - - $ 8,330 $ 6,658 - - $ 6,658		Total
	( (		( (		( (	$ 2,415,551 - 52,220) $ 2,363,331 $ 2,571,709 - 15,299) $ 2,556,410

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

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

Based on Jin-Guan-Bao-Cai-Zi No. 10502066461 Letter on July 13, 2016, to respond to the development trend of fin-tech, assist the employees of insurance enterprises, and protect their interests, an insurance enterprises shall, when

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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 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 - ending	From January 1 to June 30,2021 $ 108,744 ( 18,664 ) 459,667 ( 125) 440,878 (83,748) $ 465,874	From January 1 to June 30,2020
		( $ 46,941 ) 25,907 ( 12,832 ) ( 83) 12,992 ( 6,224) ($ 40,173)

XX. Net Income from continuing Operation

(I) Gain (loss) on financial assets and liabilities at fair value through profit or loss

Gain (loss) on disposal Dividend Gain (loss) on valuation Equity instrument Liability instruments	From April 1 to June 30,2021	From April 1 to June 30,2021	From April 1 to June 30,2020 $ 24,183 446 30,482 ( 1,872) $ 53,239	From January 1 to June 30,2021	From January 1 to June 30,2021	From January 1 to June 30,2020 $ 24,312 446 ( 3,706 ) 7,716 $ 28,768	From January 1 to June 30,2020 $ 24,312 446 ( 3,706 ) 7,716 $ 28,768
	( (	$ 19,364 - 8,365 ) 380) $ 10,619		(	$ 22,196 - 34,499 1,445) $ 55,250		$ 24,312 446 3,706 ) 7,716 $ 28,768

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

income
Dividend Gain (loss) on disposal	From April 1 to June 30,2021 $ 10,839 - $ 10,839	From April 1 to June 30,2020 $ 18,528 4,054 $ 22,582	From January 1 toJune 30,2021 $ 11,114 - $ 11,114	From January 1 toJune 30,2020
					$ 18,528 4,054 $ 22,582

(III) Gain (loss) on investment properties

Rental revenue from investment properties Gain/Loss of disposal of investment properties Direct operational expenses of investment properties	From April 1 to June 30,2021 $ 27,397 - ( 11,043) $ 16,354	From April 1 to June 30,2020 $ 23,986 5,457 ( 7,966) $ 21,477	From January 1 to June 30,2021 $ 56,480 3,688 ( 19,762) $ 40,406	From January 1 to June 30,2020	From January 1 to June 30,2020
	(	(	(	(	$ 54,673 29,180 16,901) $ 66,952

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

From April 1 to June 30,2021 From April 1 to June 30,2020 Bond instruments measured at fair value through other comprehensive income $ 64 $ 16 Gain (loss) of foreign currency exchange From April 1 to June 30,2021 From April 1 to June 30,2020 Gain (loss) of investment exchange ( $ 16,204 ) ( $ 17,355 ) Other gain (loss) of exchange ( 6,809) ( 5,039) ($ 23,013) ($ 22,394)	From January 1 to June 30,2021 $ 125 From January 1 to June 30,2021 ( $ 14,417 ) ( 6,406) ($ 20,823)	From January 1 to June 30,2020	From January 1 to June 30,2020
		$ 83 From January 1 to June 30,2020
	( ( (	( ( (	$ 15,919 ) 5,664) $ 21,583)

(V) Gain (loss) of foreign currency exchange

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

	From January1 to June	From January1 to June	30,2021	From January1 to June	From January1 to June	30,2020
	Classified as operating cost	Classified as operating expense	Total	Classified as operating cost	Classified as operating expense	Total
Employee fringe benefit expenses	$168,867	$324,311	$493,178	$123,835	$385,615	$509,450
Salaries expense	168,867	250,266	419,133	123,835	316,067	439,902
Expenses for labor and health insurance	-	37,270	37,270	-	32,166	32,166
Pension expense	-	16,169	16,169	-	14,838	14,838
Remuneration to directors	-	15,583	15,583	-	19,482	19,482
Other employee fringe benefit expenses	-	5,023	5,023	-	3,062	3,062
Depreciation expense - Property and equipment	-	7,144	7,144	-	7,481	7,481
Depreciation expense - Investment properties	9,524	-	9,524	9,616	-	9,616
Depreciation expense - Right-of-use assets	-	12,537	12,537	-	12,299	12,299
Amortization expenses	-	2,450	2,450	-	1,531	1,531

	From April 1 to June 30,2021	From April 1 to June 30,2021	From April 1 to June 30,2021	From April 1 to June 30,2020	From April 1 to June 30,2020	From April 1 to June 30,2020
	Classified as operating cost	Classified as operating expense	Total	Classified as operating cost	Classified as operating expense	Total
Employee fringe benefit expenses	$ 78,656	$129,234	$207,890	$ 59,986	$191,268	$251,254
Salaries expense	78,656	98,253	176,909	59,986	160,870	220,856
Expenses for labor and health insurance	-	16,962	16,962	-	13,436	13,436
Pension expense	-	8,532	8,532	-	7,395	7,395
Remuneration to directors	-	3,977	3,977	-	8,005	8,005
Other employee fringe benefit expenses	-	1,510	1,510	-	1,562	1,562
Depreciation expense - Property and equipment	-	3,552	3,552	-	3,726	3,726
Depreciation expense - Investment properties	4,702	-	4,702	4,735	-	4,735
Depreciation expense - Right-of-use assets	-	6,300	6,300	-	6,069	6,069
Amortization expenses	-	1,303	1,303	-	803	803

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Note: As of June 30, 2021 and 2020, the number of employees is 912 and 904, respectively; among them, 11 directors and 9 directors do not serve as employees concurrently.

(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. From January 1 to June 30, 2021 and 2020, the estimated compensations to employees and directors are as the following:

Percentage of estimation

Percentage of estimation
Employee compensation Directors’ remuneration Amount Employee Compensation Directors’ remuneration	From January 1 to June 30,2021 - - From January 1 to June 30,2021 $ - $ -	From January 1 to June 30,2020
		2.50% 2.50% From January 1 to June 30,2020
			$ 9,904 $ 9,904

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 2020 and 2019 are respectively resolved by the Board of Directors on March 26, 2021 and March 20, 2020, as the following:

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

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

For the employees’ compensation and directors’ remuneration for 2021 and 2020 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 benefits (expenses) are primarily composed of the following items:

items:	items:
From April 1 to June 30,2021 From April 1 to June 30,2020 From January 1 to June 30,2021 From January 1 to June 30,2020 Income tax for the current Those yielded in the current period $ - ( $ 25,530 ) $ - ( $ 60,027 ) Adjustment of previous year(s) ( 615) 6,511 ( 615) 6,511 ( 615) ( 19,019) ( 615) ( 53,516) Additional business profit tax levied on unappropriated retained earnings Those yielded in the current period - - ( 95) - Deferred income tax Those yielded in the current period 68,768 7,661 95,049 8,755 Income tax benefits (expenses) recognized in profit and/or loss $ 68,153 ($ 11,358) $ 94,339 ($ 44,761) (II) Current tax assets June 30,2021 December 31, 2020 June 30,2020 Current tax assets Prepaid income tax $ 2,609 $ - $ - (III) Income tax liabilities of the period June 30,2021 December 31, 2020 June 30,2020 Income tax liabilities of the period Income tax payable $ 95 $ 38,823 $ 57,122		From January 1 to June 30,2020
	$ - June 30,2020
			$ 57,122

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(IV) Information related to tax credit against loss

The information related to tax credit against loss available until June 30, 2021 is

stated as following:

llowing:
Balance not yet deducted $ 380,151	The last year for deduction
	2031

(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 (loss) Per Share

Basic earnings (loss) per share Diluted earnings (loss) per share	From April 1 to June 30,2021 ($ 0.67) ($ 0.67)	From April 1 to June 30,2020 $ 0.56 $ 0.56	From January 1 toJune 30,2021 ($ 0.73) ($ 0.73)	From January 1 toJune 30,2020	From January 1 toJune 30,2020
	( (		( (		$ 0.92 $ 0.91

The net income (loss) for calculating the earnings (loss) per share and the weighted average number of common shares are as follows:

Current net income (loss)

Net income (loss) attributed to the owner of the Company/net income (loss) for calculating the basic earnings (loss) per share Net income (loss) attributed to the owner of the Company/net income (loss) for calculating the diluted earnings (loss) per share Shares The weighted average number of common shares to be used to calculate basic earnings (loss) per share Potential impact of common stock with dilution: Bonus or Compensation to Employees The weighted average number of common shares to be used to calculate diluted earnings (loss) per share	From April 1 to June 30,2021 ($ 243,579) ($ 243,579) From April 1 to June 30,2021 362,200 - 362,200	From April 1 to June 30,2020 $ 201,353 $ 201,353 From April 1 to June 30,2020 362,200 504 362,704	From January 1 to June 30,2021 From January 1 to June 30,2020 ($ 264,739) $ 331,673 ($ 264,739) $ 331,673 Unit: thousand shares From January 1 to June 30,2021 From January 1 to June 30,2020 362,200 362,200 435 1,052 362,635 363,252	From January 1 to June 30,2020	From January 1 to June 30,2020
					362,200 1,052 363,252

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

XXIII. Financial instruments

(I) Information of Fair Value - financial instruments at fair value on the repetitive basis. 1. Level of fair value

Level of fair value
June 30, 2021 Financial assets at fair value through profit or loss TWSE/GTSM listed shares Beneficiary certificates of funds Domestic financial bonds Domestic corporate bonds Total Financial assets at fair value through other comprehensive income Investments in equity instruments - TWSE/GTSM listed shares and emerging shares - Unlisted domestic shares Investments in liability instruments - Domestic government bonds - Domestic financial bonds - Domestic corporate bonds - Overseas corporate bonds - Overseas financial bonds Total		Level 1 $ 203,705 310,223 - - $ 513,928 $ 3,575,975 - - - - - - $ 3,575,975		Level 2 $ - - - - $ - $ - - 611,620 49,997 103,818 674,579 - $ 1,440,014		Level 3 $ - - 1,103,931 521,613 $ 1,625,544 $ - 428,503 - - - - 139,160 $ 567,663		Total
								$ 203,705 310,223 1,103,931 521,613 $ 2,139,472 $ 3,575,975 428,503 611,620 49,997 103,818 674,579 139,160 $ 5,583,652

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December 31, 2020

December 31, 2020
Financial assets at fair value through profit or loss TWSE/GTSM listed shares Beneficiary certificates of funds Domestic financial bonds Domestic corporate bonds Total Financial assets at fair value through other comprehensive income Investments in equity instruments - TWSE/GTSM listed shares and emerging shares - Unlisted domestic shares Investments in liability instruments - Domestic government bonds - Domestic financial bonds - Domestic corporate bonds - Overseas corporate bonds - Overseas financial bonds Total		Level 1 $ 204,920 156,780 - - $ 361,700 $ 3,310,661 - - - - - - $ 3,310,661		Level 2 $ - - - - $ - $ - - 622,187 49,998 104,110 693,692 - $ 1,469,987		Level 3 $ - - 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 $ 3,310,661 358,056 622,187 49,998 104,110 693,692 142,258 $ 5,280,962

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June 30, 2020

June 30, 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 - Unlisted domestic shares Investments in liability instruments - Domestic government bonds - Domestic financial bonds - Domestic corporate bonds - Overseas corporate bonds - Overseas financial bonds Total		Level 1 $ 227,506 130,645 - 10,100 $ 368,251 $ 2,945,246 - - - - - - $ 2,945,246		Level 2 $ - - - - $ - $ - - 617,136 150,095 104,407 701,556 - $ 1,573,194		Level 3 $ - - 1,054,316 521,812 $ 1,576,128 $ - 381,565 - - - - 148,002 $ 529,567		Total
								$ 227,506 130,645 1,054,316 531,912 $ 1,944,379 $ 2,945,246 381,565 617,136 150,095 104,407 701,556 148,002 $ 5,048,007

There was no transfer between fair value measurement level 1 and level 2 in January 1 to June 30 of 2021 and 2020.

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Reconciliation for the financial instruments measured at fair value level 3

From January 1 to June 30, 2021

From January 1 to June 30, 2021
Financial assets at fair value through profit or loss Financial assets Liability instruments Balance - beginning $ 1,576,989 Recognized in profit/loss - gain/loss on financial assets and liabilities at fair value through profit or loss ( 1,445 ) Recognized into income－ exchange profit and/or loss - Recognized in other comprehensive income - unrealized profit/loss at fair value through other comprehensive income - Disposition - Added 100,000 Others ( 50,000) Balance - ending $ 1,625,544 Other unrealized gain/loss of the current ($ 1,445) From January 1 to June 30, 2020 Financial assets at fair value through profit or loss Financial assets Liability instruments Balance - beginning $ 1,398,128 Recognized in profit/loss - gain/loss on financial assets and liabilities at fair value through profit or loss 8,000 Recognized into income－ exchange profit and/or loss - Recognized in other comprehensive income - unrealized profit/loss at fair value through other comprehensive income - Disposition ( 30,000 ) Added 200,000 Balance - ending $ 1,576,128 Other unrealized gain/loss of the current $ 8,000	Financial assets at fair value through other comprehensive income Liability instruments Equity instrument $ 142,258 $ 358,056 - - ( 3,100 ) - 2 107,746 - ( 32,960 ) - - - ( 4,339) $ 139,160 $ 428,503 ($ 3,100) $ - Financial assets at fair value through other comprehensive income Liability instruments Equity instrument $ 150,000 $ 365,862 - - ( 2,000 ) - 2 ( 13,577 ) - - - 29,280 $ 148,002 $ 381,565 ($ 2,000) $ -	Total
		$ 2,077,303 ( 1,445 ) ( 3,100 ) 107,748 ( 32,960 ) 100,000 ( 54,339) $ 2,193,207 ($ 4,545) Total
Financial assets Balance - beginning Recognized in profit/loss - gain/loss on financial assets and liabilities at fair value through profit or loss Recognized into income－ exchange profit and/or loss Recognized in other comprehensive income - unrealized profit/loss at fair value through other comprehensive income Disposition Added Balance - ending Other unrealized gain/loss of the current
		$ 1,913,990 8,000 ( 2,000 ) ( 13,575 ) ( 30,000 ) 229,280 $ 2,105,695 $ 6,000

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The evaluation skills and inputs for Level 2 fair value measurement

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

The evaluation skills and inputs for Level 3 fair value measurement

Categories of financial
instruments
TSEC/GTSM listed bond
investments
Investments in unlisted
domestic shares

Evaluation skills and inputs

Based on cash flow discount approach, the
present value of incomes to be obtained by
holding the investment. The material
unobservable input is the discount factor
(yield), is obtained by considering the
premium reward of risks and the reference
interest rate of corporate bonds.
Based on the asset-based approach, reflect the
entire value of the enterprise or business in
terms of the total market values for the
individual assets and liabilities applicable to
the evaluated subject. The material
unobservable input is the liquidity discount,
minority interest discount, and financial
information of the investees.

The Company’s measurement of the fair value of financial instruments is reasonable; however, if different evaluation models or parameters are applied, the outcome of evaluations may be different. For the financial instrument classified as Level 3, the effects to the profit/loss or other Comprehensive Income for the period when evaluation parameters change are as follows:

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Item	Inputs value	Ranges	Upward or downward changes	Effect of changes in fair value	Effect of changes in fair value
				Positive change	Negative change
June 30, 2021 ASSETS Bond investment Stock investment December 31, 2020 ASSETS Bond investment Stock investment June 30, 2020 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 Discount rate Financial Information of the Investees Liquidity Discount Minority Interest Discount PBR Price-to-earnings ratio (P/E)	1.28%~3.99% $17,015 10% 10% 1.31%~4.01% $17,770~$19,710 10% 10% 1.39%~4.14% $25,388~$32,286 10%~20% 10% 3.03 18.09	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 100 bp change upward 5% change downward 10% change upward 10% change upward 10% change downward 10% change downward	$ - - - - $ - - - - $ - - - - - -	( $ 388,868 ) ( 369 ) ( 47,381 ) ( 47,381 ) ( $ 385,466 ) ( 1,426 ) ( 39,554 ) ( 39,554 ) ( $ 399,829 ) ( 1,696 ) ( 42,515 ) ( 35,266 ) ( 456 ) ( 1,361 )

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.

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(II) 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)	June 30,2021 $ 2,139,472 9,923,477 4,004,478 967,554 1,753,128	December 31, 2020 $ 1,938,689 8,239,511 3,668,717 990,058 1,029,277	June 30,2020
			$ 1,944,379 8,225,433 3,326,811 1,104,060 1,382,395

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

Note 2: The balance includes financial liabilities at amortized costs, such as the claims payable, commissions payable, due to reinsurers and ceding companies, other payable, and refundable deposit.
(III) The objectives and policies of financial risk management

The major financial instruments of the Company include the equity and bond instrument investment, receivables, and payables. The financial management department of the Company supervises, and manages the financial risks related to the Company’s operation based on internal risk report analyzing the degrees and breadth of exposures. Such risks include market risks (including foreign exchange risks, interest rate risks, and other price risks), credit risks and liquidity risks. The Risk Management Committee 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)).

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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 29.

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)	Effects from USD From January 1 to June 30,2021 From January 1 to June 30,2020 $ 8,143 $ 9,155	Effects from RMB	Effects from RMB
	From January 1 to June 30,2021 $ 8,143	From January 1 to June 30,2021 $ 2,855	From January 1 to June 30,2020
			$ 2,352

(i) Mainly originated from the outstanding USD and CNY denominated financial instruments 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:

Interest rate risk with fair value - Financial assets	June 30,2021 $ 3,204,718	December 31, 2020 $ 3,189,233	June 30,2020
			$ 3,307,424

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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 January 1 to June 30, 2021 and 2020 will decrease NT$444,682 thousand and NT$464,312 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$5,139 thousand and NT$3,582 thousand due to the increase/decrease in the fair value of financial assets at fair value through profit or loss from January 1 to June 30, 2021 and 2020. The other comprehensive income would have increased/decreased by NT$40,045 thousand and NT$33,268 thousand due to the increase/decrease in the fair value of other financial assets at fair value through comprehensive income from January 1 to June 30, 2021 and 2020.

2. Credit risk

Credit risk represents the potential loss that would be incurred by the Company if the counter-parties or third parties breached the contracts. The Company’s financial instruments are affected by its credit risk concentration, component, contract amounts and other receivables. As the counterparties of

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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

June 30, 2021

June 30, 2021
Financial assets	Taiwan	Asia	America	Others	Total
Cash and cash equivalents	$ 4,987,651	$ -	$ -	$ -	$ 4,987,651
Financial assets at fair value through profit or loss	1,625,544	-	-	-	1,625,544
Financial assets at fair value through other comprehensive income	1,087,427	181,607	-	310,140	1,579,174
Total	$7,700,622	$181,607	$ -	$310,140	$8,192,369
%byterritory	94.00%	2.22%	-	3.78%	100.00%

December 31, 2020

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

June 30, 2020

June 30, 2020
Financial assets	Taiwan	Asia	America	Others	Total
Cash and cash equivalents	$ 3,945,097	$ -	$ -	$ -	$ 3,945,097
Financial assets at fair value through profit or loss	1,586,229	-	-	-	1,586,229
Financial assets at fair value through other comprehensive income	1,211,838	252,201	-	257,157	1,721,196
Total	$6,743,164	$252,201	$ -	$257,157	$7,252,522
%byterritory	92.98%	3.48%	-	3.54%	100.00%

3. Liquidity risk

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

66 -

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.

June 30, 2021

June 30, 2021
Liabilities without interest Lease liabilities	On demand or shorter than 3 months $ 1,482,988 5,848 $ 1,488,836		3 months – 1 year $ 19,185 23,243 $ 42,428		1–5years $ 18,564 37,076 $ 55,640		More than 5 years
							$ 6,323 - $ 6,323

December 31, 2020

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

June 30, 2020

June 30, 2020
Liabilities without interest Lease liabilities	On demand or shorter than 3 months $ 1,065,790 5,433 $ 1,071,223		3 months – 1 year $ 85,852 23,176 $ 109,028		1–5years $ 24,802 44,179 $ 68,981		More than 5 years
							$ 735 - $ 735

(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 June 30, 2021 are as follows:

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.

67 -

Counterparties of Reinsurance	Insurance type
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$845 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 June 30, 2020 are as follows:

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

The unqualified premium expense was NT$484 thousand; the unqualified reinsurance reserves was NT$9,239 thousand. The components include ceding unearned premium reserves for NT$242 thousand, claim recoverable from reinsurers to the reported and paid claims for NT$688 thousand for no longer than nine months, and the ceding claims reported but not claimed reserves for NT$8,309 thousand.

68 -

XXIV. Transactions with related parties

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

Name of the Related Parties Relationship with the Company Bank of Taiwan Co., Ltd. Major Management Yong-Shin Development Co., Ltd. Major Management Tong-Sheng Development Co., Ltd. Investor with significant effects Navigator Real Estate Co., Ltd. Investor with significant effects Navigator Investment Co., Ltd. Investor with significant effects Taiwan Navigator Asset Investment Co., Related party in substance Ltd. Taiwan Business Bank, Ltd. Related party in substance Goldsun Building Materials Co., Ltd. Related party in substance Bank Taiwan Insurance Brokers Co., Related party in substance Ltd. Taiming Assurance Broker Co., Ltd. Related party in substance Sirtec International Co., Ltd. Related party in substance Hua Nan Commercial Bank, Ltd. Related party in substance Forland Auto Trade Holding Co., Ltd. Related party in substance Taipei Branch (Cayman) 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

Deposit

Checking deposits and Demand deposits:

Major Management Bank of Taiwan Co., Ltd. Related party in substance Taiwan Business Bank Hua Nan Commercial Bank	June 30,2021 $ 903,308 70,455 7,152 $ 980,915	December 31, 2020 $ 638,950 65,498 1,468 $ 705,916	June 30,2020	June 30,2020
				$ 776,658 94,959 4,477 $ 876,094

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

Major Management Bank of Taiwan Co., Ltd. Related party in substance Taiwan Business Bank	June 30,2021 $ 246,665 134,961 $ 381,626	December 31, 2020 $ 241,665 137,017 $ 378,682	June 30,2020	June 30,2020
				$ 249,925 140,017 $ 389,942

The time deposits in the related parties have the interest rate of 0.06%–1.52% and 0.06%–2.25% as of June 30, 2021 and 2020; as of December 31, 2020, the interest rates were 0.06%–2.25%, with same transaction terms as non-related parties.

2. Premium income (direct policy writing)

Major Management Bank of Taiwan Co., Ltd. Related party in substance Goldsun Building Materials Co., Ltd. Sirtec International Co., Ltd. Taiwan Business Bank Other related parties	From April 1 to June 30,2021 $ 868 11,453 1,178 50 811 $ 14,360	From April 1 to June 30,2020 $ 783 9,923 1,252 57 7,411 $ 19,426	From January 1 toJune 30,2021	From January 1 toJune 30,2021	From January 1 toJune 30,2020 $ 4,903 10,279 1,273 61 30,648 $ 47,164	From January 1 toJune 30,2020 $ 4,903 10,279 1,273 61 30,648 $ 47,164
				$ 1,327 11,561 1,232 2,892 3,126 $ 20,138		$ 4,903 10,279 1,273 61 30,648 $ 47,164

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

70 -

3. Claims (direct policy writing)

From April 1 to From April 1 to From January 1 From January 1 June 30, 2021 June 30, 2020 to June 30, 2021 to June 30, 2020 Major Management Bank of Taiwan Co., Ltd. $ - $ 705 $ 23 $ 1,053 Related party in substance Goldsun Building Materials Co., Ltd. - 71 363 71 Other related parties 2,282 1,575 5,990 1,575 $ 2,282 $ 2,351 $ 6,376 $ 2,699

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

4. Commission expenditure

Major Management Bank of Taiwan Co., Ltd. Related party in substance Bank Taiwan Insurance Brokers Co., Ltd. Taiming Assurance Broker Co., Ltd. (TABC) Other related parties	From April 1 to June 30,2021 $ 1,348 7,809 13,959 37,388 $ 60,504	From April 1 to June 30,2020 $ 1,366 7,616 2,762 - $ 11,744	From January 1 to June 30,2021 $ 1,805 14,881 16,920 40,297 $ 73,903	From January 1 to June 30,2020	From January 1 to June 30,2020
					$ 2,059 14,383 5,376 - $ 21,818

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

5. 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.

71 -

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

Type/Name of the Related Parties Major Management Yong-Shin Development Co., Ltd. Investor with significant effects Navigator Real Estate Co., Ltd. Tong-Sheng Development Co., Ltd. Navigator Investment Co., Ltd. Related party in substance Taiwan Navigator Assets Forland Auto Trade Holding Co., Ltd. Taipei Branch (Cayman) Sirtec International Co., Ltd. Taiming Assurance Broker Co., Ltd. (TABC)		June 30,2021 $ 170 408 255 170 $ 1,003 595 11,794 5,706 $ 20,101	December 31,2020 $ 220 528 330 220 $ 1,298 770 15,035 11,193 $ 29,594		June 30,2020
					$ 280 672 420 280 $ 1,652 980 6,191 15,815 $ 26,290

(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)	From April 1 to June 30, 2021 $ 29 68 43 29 168 100 1,444 1,666 $ 3,547	From April 1 to June 30, 2020 $ 29 69 43 29 169 100 1,445 2,001 $ 3,885	From January 1 to June 30, 2021 $ 48 114 72 48 281 167 3,093 3,728 $ 7,551	From January 1 to June 30, 2020	From January 1 to June 30, 2020
					$ 48 115 72 48 282 167 3,095 4,064 $ 7,891

72 -
(2) The deposits the Company received for leasing properties to the related parties as of June 30, 2021, and December 31 and June 30, 2020 are as follows:

ollows:
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)	June 30,2021 $ 20 48 30 20 70 118 1,652 1,615 $ 3,573	December 31, 2020 $ 20 48 30 20 70 118 1,652 1,615 $ 3,573	June 30,2020
				$ 20 48 30 20 70 118 1,652 1,615 $ 3,573

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

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.	June 30,2021 $ 1,839 $ 1,937	December 31, 2020 $ 2,960 $ 3,112	June 30,2020
				$ 4,080 $ 4,271

73 -

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.	From April 1 to June 30, 2021 $ 13 $ 602	From April 1 to June 30, 2020 $ 27 $ 602	From January 1 to June 30, 2021 $ 29 $ 1,204	From January 1 to June 30, 2020	From January 1 to June 30, 2020
					$ 59 $ 1,204

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 June 30, 2021, and December 31 and June 30, 2020 were both NT$482 thousand.

(III) Incentive remuneration to key management level

The total salaries and remunerations to directors and other key management in

January 1 to June 30 of 2021 and 2020 are enumerated below:

Short-term employee benefits Post-employment benefits	From April 1 to June 30,2021 $ 16,254 601 $ 16,855	From April 1 to June 30,2020 $ 14,758 577 $ 15,335	From January 1 to June 30,2021 $ 51,649 1,181 $ 52,830	From January 1 to June 30,2020	From January 1 to June 30,2020
					$ 52,381 1,153 $ 53,534

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.

74 -

XXV. Others

(I) Gross retained earned premium

As of June 30, 2021, the balance of the gross retained earned premium for the

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

Insurance type	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 402,217 $ 127,094 $ 189,686 $ 339,625 4,897,351 99,589 951,987 4,044,953 $ 5,299,568 $ 226,683 $ 1,141,673 $ 4,384,578 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net change in unearned premium reserves (9)=(5)－(6) +(7)－(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 348,128 $ 348,534 $ 147,337 $ 146,159 $ 772 3,101,567 1,929,383 90,355 79,250 1,183,289 $ 3,449,695 $ 2,277,917 $ 237,692 $ 225,409 $ 1,184,061 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 208,880 $ 209,123 ( $ 243 ) $ 338,610 454,060 363,026 91,034 2,952,698 $ 662,940 $ 572,149 $ 90,791 $ 3,291,308	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 402,217 $ 127,094 $ 189,686 $ 339,625 4,897,351 99,589 951,987 4,044,953 $ 5,299,568 $ 226,683 $ 1,141,673 $ 4,384,578 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net change in unearned premium reserves (9)=(5)－(6) +(7)－(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 348,128 $ 348,534 $ 147,337 $ 146,159 $ 772 3,101,567 1,929,383 90,355 79,250 1,183,289 $ 3,449,695 $ 2,277,917 $ 237,692 $ 225,409 $ 1,184,061 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 208,880 $ 209,123 ( $ 243 ) $ 338,610 454,060 363,026 91,034 2,952,698 $ 662,940 $ 572,149 $ 90,791 $ 3,291,308	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 402,217 $ 127,094 $ 189,686 $ 339,625 4,897,351 99,589 951,987 4,044,953 $ 5,299,568 $ 226,683 $ 1,141,673 $ 4,384,578 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net change in unearned premium reserves (9)=(5)－(6) +(7)－(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 348,128 $ 348,534 $ 147,337 $ 146,159 $ 772 3,101,567 1,929,383 90,355 79,250 1,183,289 $ 3,449,695 $ 2,277,917 $ 237,692 $ 225,409 $ 1,184,061 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 208,880 $ 209,123 ( $ 243 ) $ 338,610 454,060 363,026 91,034 2,952,698 $ 662,940 $ 572,149 $ 90,791 $ 3,291,308	Premium retained (4)＝(1)＋(2)－(3)	Premium retained (4)＝(1)＋(2)－(3)
Compulsory insurance Non-Compulsory insurance Item Compulsory insurance Non-Compulsory insurance Item				$	339,625 4,044,953 4,384,578 Net change in unearned premium reserves (9)=(5)－(6) +(7)－(8)
				$
			Recovery (8)
	$
	$

		Reserve (10) $ 208,880 454,060 $ 662,940
Compulsory insurance Non-Compulsory insurance				$ 338,610 2,952,698 $ 3,291,308

As of June 30, 2020, the balance of the gross retained earned premium for the

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

Insurance type	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 404,424 $ 123,922 $ 189,840 $ 338,506 2,947,867 102,932 957,203 2,093,596 $ 3,352,291 $ 226,854 $ 1,147,043 $ 2,432,102 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net change in unearned premium reserves (9)=(5)－(6) +(7)－(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 347,900 $ 338,780 $ 144,590 $ 144,516 $ 9,194 2,051,107 1,823,624 94,962 73,471 248,974 $ 2,399,007 $ 2,162,404 $ 239,552 $ 217,987 $ 258,168 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 208,743 $ 203,272 $ 5,471 $ 334,783 492,532 370,871 121,661 1,966,283 $ 701,275 $ 574,143 $ 127,132 $ 2,301,066	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 404,424 $ 123,922 $ 189,840 $ 338,506 2,947,867 102,932 957,203 2,093,596 $ 3,352,291 $ 226,854 $ 1,147,043 $ 2,432,102 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net change in unearned premium reserves (9)=(5)－(6) +(7)－(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 347,900 $ 338,780 $ 144,590 $ 144,516 $ 9,194 2,051,107 1,823,624 94,962 73,471 248,974 $ 2,399,007 $ 2,162,404 $ 239,552 $ 217,987 $ 258,168 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 208,743 $ 203,272 $ 5,471 $ 334,783 492,532 370,871 121,661 1,966,283 $ 701,275 $ 574,143 $ 127,132 $ 2,301,066	Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－(3) $ 404,424 $ 123,922 $ 189,840 $ 338,506 2,947,867 102,932 957,203 2,093,596 $ 3,352,291 $ 226,854 $ 1,147,043 $ 2,432,102 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net change in unearned premium reserves (9)=(5)－(6) +(7)－(8) Reserve (5) Recovery (6) Reserve (7) Recovery (8) $ 347,900 $ 338,780 $ 144,590 $ 144,516 $ 9,194 2,051,107 1,823,624 94,962 73,471 248,974 $ 2,399,007 $ 2,162,404 $ 239,552 $ 217,987 $ 258,168 Unearned premium reserves for ceding reinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)=(4)－(9)+(12) Reserve (10) Recovery (11) $ 208,743 $ 203,272 $ 5,471 $ 334,783 492,532 370,871 121,661 1,966,283 $ 701,275 $ 574,143 $ 127,132 $ 2,301,066	Premium retained (4)＝(1)＋(2)－(3)	Premium retained (4)＝(1)＋(2)－(3)
Compulsory insurance Non-Compulsory insurance Item Compulsory insurance Non-Compulsory insurance Item				$	338,506 2,093,596 2,432,102 Net change in unearned premium reserves (9)=(5)－(6) +(7)－(8)
				$
			Recovery (8)
	$
	$

		Reserve (10) $ 208,743 492,532 $ 701,275
Compulsory insurance Non-Compulsory insurance				$ 334,783 1,966,283 $ 2,301,066

75 -

(II) Retained claims

As of June 30, 2021, the balance of the gross retained claims for the compulsory and non-compulsory insurance, and the calculation are as follows:

Insurance type Compulsory insurance Non-Compulsory insurance	Claims (including the claim expenses) (1) $ 261,214 1,432,159 $ 1,693,373		Claims for reinsurance (2) $ 130,929 18,646 $ 149,575		Refundable Claims for Reinsurance (3) $ 155,425 129,426 $ 284,851	Retained claims (4)＝(1)＋(2)－ (3)	Retained claims (4)＝(1)＋(2)－ (3)
							$ 236,718 1,321,379 $ 1,558,097

As of June 30, 2020, the balance of the gross retained claims for the compulsory and non-compulsory insurance, and the calculation are as follows:

Insurance type Compulsory insurance Non-Compulsory insurance	Claims (including the claim expenses) (1) $ 272,940 1,045,318 $ 1,318,258		Claims for reinsurance (2) $ 134,758 22,369 $ 157,127		Refundable Claims for Reinsurance (3) $ 159,234 175,366 $ 334,600	Retained claims (4)＝(1)＋(2)－ (3)	Retained claims (4)＝(1)＋(2)－ (3)
							$ 248,464 892,321 $ 1,140,785

(III) Unearned premium reserves
The balances of the retained unearned premium reserves for each insurance type as of June 30, 2021 are summarized as the followings:

Item Miscellaneous Insurance General Personal Automobile Liability Insurance General Personal Automobile Physical Damage Insurance Personal Accident Insurance One-year Residential Fire Insurance Other Insurance (Note) Less: Accumulated impairment	Unearnedpremium reserves	Unearnedpremium reserves	Unearnedpremium reserves		Ceding unearned premium reserves Ceding reinsurance business $ 40,061 2,788 5,682 20,498 - 823,946 - $ 892,975		Retained business
	Direct business $ 1,059,925 875,643 524,425 247,275 191,605 1,463,219 - $ 4,362,092		Reinsurance inward business
			$ 102 36 - 1,827 - 267,805 - $ 269,770				$ 1,019,966 872,891 518,743 228,604 191,605 907,078 - $ 3,738,887

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Note: the balance of each insurance type less than 5% of the total are stated collectively.
The balances of the retained unearned premium reserves for each insurance type as of June 30, 2020 are summarized as the followings:

Item General Personal Automobile Liability Insurance General Personal Automobile Physical Damage Insurance Personal Accident Insurance One-year Residential Fire Insurance Compulsory Automobile Liability Insurance Other Insurance (Note) Less: Accumulated impairment	Unearnedpremium reserves	Unearnedpremium reserves	Unearnedpremium reserves		Ceding unearned premium reserves Ceding reinsurance business $ 2,802 7,691 21,980 - 101,201 744,968 - $ 878,642		Retained business
	Direct business $ 821,776 491,574 244,810 183,688 168,667 1,297,144 - $ 3,207,659		Reinsurance inward business
			$ 18 - 1,545 - 66,414 198,417 - $ 266,394				$ 818,992 483,883 224,375 183,688 133,880 750,593 - $ 2,595,411

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

(IV) Claim reserves
As of June 30, 2021, 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) $ 349,205 170,312 - $ 519,517		Ceding claims reserves Ceding reinsurance business (3) $ 684,023 366,338 314) $ 1,050,047	Retained business (4)=(1)+(2)-(3)	Retained business (4)=(1)+(2)-(3)
	Direct Insurance (1) $ 1,937,543 1,311,376 - $ 3,248,919
			(			$ 1,602,725 1,115,350 314 $ 2,718,389

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

			Direct Insurance	Direct Insurance	Reinsurance inward business	Reinsurance inward business	Reinsurance inward business	Net change in
								claims reserves
		Reserve		Recovery		Reserve Recovery		(5)=
	Item	(1)		(2)		(3)	(4)	(1)-(2)+(3)-(4)
Reported but not yet		$ 1,937,543		$ 1,539,543	$	349,205 $	319,375	$ 427,830
paid
Not yet	reported	1,311,376		869,734		170,312	165,693	446,261
		$ 3,248,919		$ 2,409,277	$	519,517 $	485,068	$ 874,091
				Cedingreinsurance business				Ceding net
							change in claims
				Reserve		Recovery		reserves
	Item			(6)		(7)		(8)=(6)-(7)
Reported but not yet paid			$	684,023		$ 557,847		$ 126,176
Not yet reported				366,338		367,557	(	1,219)
			$	1,050,361		$ 925,404		$ 124,957

As of June 30, 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	Claim r	eserves Reinsurance inward business (2) $ 299,303 166,707 - $ 466,010		Ceding claims reserves Ceding reinsurance business (3) $ 670,594 368,461 855) $ 1,038,200	Retained business (4)=(1)+(2)-(3)	Retained business (4)=(1)+(2)-(3)
	Direct Insurance (1)
		$ 1,602,208 865,574 - $ 2,467,782		(			$ 1,230,917 663,820 855 $ 1,895,592

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

			Direct Insurance	Direct Insurance	Reinsurance inward business	Reinsurance inward business	Reinsurance inward business	Reinsurance inward business	Net change in
									claims reserves
		Reserve		Recovery		Reserve Recovery			(5)=
	Item	(1)		(2)		(3)		(4)	(1)-(2)+(3)-(4)
Reported but not yet
paid		$ 1,602,208		$ 1,561,264	$	299,303 $		287,474	$ 52,773
Not yet	reported	865,574		873,230		166,707		166,144	( 7,093)
		$ 2,467,782		$ 2,434,494	$	466,010 $		453,618	$ 45,680
				Cedingreinsurance			business		Ceding net
								change in claims
				Reserve			Recovery		reserves
	Item			(6)			(7)		(8)=(6)-(7)
Reported but not yet paid			$	670,594		$	667,090		$ 3,504
Not yet reported				368,461			369,723	(	1,262)
			$	1,039,055		$	1,036,813		$ 2,242

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(V) Premium deficiency reserves

As of June 30, 2021, 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 Miscellaneous Insurance	Premium deficiencyreserves Direct business Reinsurance inward business $ 2,793 $ 23 1,784 44 1,412 - 579 - $ 6,568 $ 67	Premium deficiencyreserves Direct business Reinsurance inward business $ 2,793 $ 23 1,784 44 1,412 - 579 - $ 6,568 $ 67	Ceding premium deficiency reserves Ceding reinsurance business $ - - - - $ -		Retained business
	Direct business $ 2,793 1,784 1,412 579 $ 6,568
					$ 2,816 1,828 1,412 579 $ 6,635

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

Item Fishing Vessel Insurance Aviation Insurance Marine Hull Insurance Miscellaneous Insurance		Direct Insurance Reserve (1) Recovery (2) $ 2,793 $ 2,762 1,784 2,431 1,412 - 579 1,999 $ 6,568 $ 7,192	Direct Insurance Reserve (1) Recovery (2) $ 2,793 $ 2,762 1,784 2,431 1,412 - 579 1,999 $ 6,568 $ 7,192	Reinsurance inward business	Reinsurance inward business	Reinsurance inward business	Reinsurance inward business	Net change in premium deficiency reserves for direct business and reinsurance inward (5)=(1)-(2) +(3)-(4) ( $ 172 ) ( 749 ) 1,412 ( 1,444 ) ($ 953)
		Reserve (1) $ 2,793 1,784 1,412 579 $ 6,568			Reserve (3) $ 23 44 - - $ 67		Recovery (4)
							$ 226 146 - 24 $ 396

Item Fishing Vessel Insurance Aviation Insurance Marine Hull 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) $ - - - - $ -
						( ( ( (	$ 172 ) 749 ) 1,412 1,444) $ 953)

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

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As of June 30, 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 Marine Hull Insurance Aviation Insurance Marine Cargo Insurance	Premium deficiencyreserves Direct business Reinsurance inward business $ 2,593 $ 301 1,596 154 1,383 42 1,003 12 $ 6,575 $ 509	Premium deficiencyreserves Direct business Reinsurance inward business $ 2,593 $ 301 1,596 154 1,383 42 1,003 12 $ 6,575 $ 509	Ceding premium deficiency reserves Ceding reinsurance business $ - - - - $ -		Retained business
	Direct business $ 2,593 1,596 1,383 1,003 $ 6,575
					$ 2,894 1,750 1,425 1,015 $ 7,084

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

Item Fishing Vessel Insurance Marine Hull Insurance Aviation Insurance Marine Cargo Insurance		Direct Insurance Reserve (1) Recovery (2) $ 2,593 $ 2,946 1,596 783 1,383 2,881 1,003 139 $ 6,575 $ 6,749	Direct Insurance Reserve (1) Recovery (2) $ 2,593 $ 2,946 1,596 783 1,383 2,881 1,003 139 $ 6,575 $ 6,749	Reinsurance inward business Reserve (3) Recovery (4) $ 301 $ 234 154 66 42 103 12 2 $ 509 $ 405	Reinsurance inward business Reserve (3) Recovery (4) $ 301 $ 234 154 66 42 103 12 2 $ 509 $ 405	Reinsurance inward business Reserve (3) Recovery (4) $ 301 $ 234 154 66 42 103 12 2 $ 509 $ 405	Net change in premium deficiency reserves for direct business and reinsurance inward (5)=(1)-(2) +(3)-(4)
		Reserve (1) $ 2,593 1,596 1,383 1,003 $ 6,575			Reserve (3) $ 301 154 42 12 $ 509
							( $ 286 ) 901 ( 1,559 ) 874 ($ 70)

Item Fishing Vessel Insurance Marine Hull Insurance Aviation Insurance Marine Cargo 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) $ - - - - $ -
						( ( (	$ 286 ) 901 1,559 ) 874 $ 70)

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

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(VI) Special reserves

As of June 30, 2021, 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
		$ 913,838 32,873 - $ 946,711

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

Item				Liabi	lit	ies						Special	re	serve
		Material accidents		Hazard changes		Others		Total		Material accidents		Hazard changes		Others		Total
Balance - beginning Provision of the Period Recovery of the Period Balance - ending		$ 178,008 - ( 4,046) $ 173,962		$ 796,548 - - $ 796,548		$ 230,305 - - $ 230,305		$ 1,204,861 - ( 4,046) $ 1,200,815		$ 450,903 - - $ 450,903		$ 990,404 - ( 10,458) $ 979,946		$ 466,297 - - $ 466,297		$ 1,907,604 - ( 10,458) $ 1,897,146

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 June 30, 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 9,809 16,595) $ 922,211

(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 - ( 4,045) $ 182,054		$ 796,548 - - $ 796,548		$ 230,305 - - $ 230,305		$ 1,212,952 - ( 4,045) $ 1,208,907		$ 396,144 - - $ 396,144		$ 926,829 - ( 41,672) $ 885,157		$ 412,534 - - $ 412,534		$ 1,735,507 - ( 41,672) $ 1,693,835

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.

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

Item		Amount		Item		Amount
ASSETS	June 30, 2021	December 31, 2020	June 30, 2020	Liabilities	June 30, 2021	December 31, 2020	June 30, 2020
Cash and Bank deposits Cash Equivalents Notes receivable Premiums receivable Less benefits & claims recovered from reinsurers Due from reinsurers and ceding companies Other receivables Financial assets at fair value through other comprehensive income Ceding unearned premium reserves Ceding claims reserves Temporary paid and payment to be carried over Other assets	$ 1,571,548 - 16,421 17,593 21,092 41,087 - - 208,880 279,620 3,265 -	$ 1,547,851 - 12,219 26,709 22,400 41,501 - - 209,123 291,759 43 -	$ 1,543,629 - 13,889 14,999 20,761 39,878 - - 208,743 276,409 367 -	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	$ - - - 35,361 495,465 679,151 946,711 - 2,818	$ - - - 42,559 494,693 698,726 913,838 - 1,789	$ - 3,414 - 20,745 492,490 678,950 922,211 - 865
Total assets	$2,159,506	$2,151,605	$2,118,675	Total liabilities	$2,159,506	$2,151,605	$2,118,675

Detailed income/cost statement of compulsory automobile liability insurance

Item	From January 1 to June 30,2021	From January 1 to June 30,2020
Operating Revenues Premium Income (including reinsurance revenue NT$127,094 thousand and NT$123,922 thousand, 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$130,929 thousand and NT$134,758 thousand, respectively) Less: Claim recovered from reinsurer Retained claims Net change in claims reserves Net change in special reserves (Note) Total operating costs	$ 443,231 ( 189,686 ) ( 1,015) 252,530 3,450 $ 255,980 $ 392,143 ( 155,425) 236,718 ( 7,436 ) 32,873 $ 262,155	$ 440,319 ( 189,840 ) ( 3,723) 246,756 4,157 $ 250,913 $ 407,698 ( 159,234) 248,464 9,235 ( 6,786) $ 250,913

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

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

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(VIII) Acquisition cost of insurance contracts

As of June 30, 2021, the amount of the insurance contracts at each insurance category and the calculations are as follows:

Item Miscellaneous Insurance General Personal Automobile Liability Insurance General Personal Automobile Physical Damage Insurance Other Insurance	Commission expenditure $ 435,233 99,585 67,443 203,169 $ 805,430		Fee expenditure $ - - - 53,741 $ 53,741	Reinsurance commission expenditure $ 8 4 - 6,618 $ 6,630		Other cost $ - 2,092 389 5,019 $ 7,500		Total
								$ 435,241 101,681 67,832 268,547 $ 873,301

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 June 30, 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 Compulsory Automobile Liability Insurance Personal Accident Insurance One-year Residential General Fire Insurance One-year Commercial General Fire Insurance Other Insurance (Note)	Commission expenditure $ 93,209 62,098 - 43,047 28,431 25,252 98,862 $ 350,899		Fee expenditure $ - - 35,558 - - - 21,227 $ 56,785	Reinsurance commission expenditure $ - - - - - 1,253 5,672 $ 6,925		Other cost $ 2,029 367 - 50 4,797 - 3 $ 7,246		Total
								$ 95,238 62,465 35,558 43,097 33,228 26,505 125,764 $ 421,855

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.

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(IX) Analysis for business profit and loss

The amount of the profits and losses at each insurance category and the calculations during January 1 to June 30, 2021 are as follows:
(1) Direct Insurance

Direct Insurance
Item Residential Earthquake Insurance General Personal Automobile Liability Insurance General Personal Automobile Physical Damage Insurance One-year Residential General Fire Insurance Commercial earthquake insurance One-year Commercial General Fire Insurance Personal Accident Insurance General Liability Insurance Compulsory Motorcycle Liability Insurance Typhoon and Flood Insurance Compulsory Automobile Liability Insurance Engineering Insurance Other Insurance		Premium revenues (1) $ 300,686 834,273 486,865 165,138 89,301 242,094 210,951 123,761 127,562 65,347 238,259 105,152 2,310,179 $ 5,299,568		Net change in unearned premium reserves (2) $ - 57,576 8,095 ) 159 11,884 15,736 7,165 13,702 711 ) 12,656 1,140 ) 10,137 1,052,709 $ 1,171,778		Acquisition Cost of Insurance Contracts (3) $ 17,637 101,678 67,832 34,503 7,622 25,406 43,013 16,894 18,308 5,737 34,376 9,470 484,195 $ 866,671	Claims (including the claim expenses) (4) $ - 441,960 304,747 17,391 89 6,500 100,530 39,054 58,662 162 167,728 34,938 521,612 $ 1,693,373	c	Net change in laims reserves (5) $ - 8,762 11,135 ) 11,537 ) 297 ) 129,437 2,509 1,749 ) 1,170 73 ) 8,379 ) 9,689 721,245 $ 839,642	Profit (loss) of Insurance (6)=(1)-(2)-(3)- (4)-(5)
			( ( (					( ( ( ( ( (		(	$ 283,049 224,297 133,516 124,622 70,003 65,015 57,734 55,860 50,133 46,865 45,674 40,918 469,582) $ 728,104

(2) Reinsurance assumed

Insurance type Residential Earthquake Insurance Compulsory Automobile Liability Insurance Commercial earthquake insurance Engineering Insurance Typhoon and Flood Insurance Nuclear Energy Insurance Marine Hull Insurance Compulsory Commercial Automobile Liability Insurance Fishing Vessel Insurance Other Insurance		Reinsurance premium revenues (1) $ 40,557 70,112 8,934 13,063 6,323 2,527 58 12,911 1,055 71,143 $ 226,683		Net change in unearned premium reserves (2) $ 5,711 796 1,886 147 ) 1,363 987 ) 1,170 ) 366 588 ) 5,053 $ 12,283		Reinsurance commission expenditure (3) $ - - 692 3,753 385 - - - 153 1,647 $ 6,630		Claims for reinsurance (4) $ - 57,183 4 6,081 44 - 2,104 10,061 279 73,819 $ 149,575	c	Net change in laims reserves (5) $ - 1,835 111 ) 1,325 ) 18 60 3,399 ) 117 913 ) 38,167 $ 34,449	Profit (loss) of reinsurance inward (6)=(1)-(2)-(3)- (4)-(5)	Profit (loss) of reinsurance inward (6)=(1)-(2)-(3)- (4)-(5)
			( ( ( (						( ( ( (		(	$ 34,846 10,298 6,463 4,701 4,513 3,454 2,523 2,367 2,124 47,543) $ 23,746

(3) Ceding reinsurance business

Insurance type Residential Earthquake Insurance Engineering Insurance Commercial earthquake insurance General Liability Insurance Compulsory Motorcycle Liability Insurance Typhoon and Flood Insurance Fishing Vessel Insurance Other Insurance		Reinsurance premium outward (1) $ 300,686 74,053 70,352 63,302 60,677 43,875 24,098 504,630 $ 1,141,673		Ceding net change in unearned premium reserves (2) $ - 8,556 15,112 5,155 425 ) 11,043 2,867 ) 54,217 $ 90,791	i	Reinsurance commission ncome and fee income (3) $ 30,570 10,332 4,760 17,034 - 3,928 3,672 82,432 $ 152,728		Refundable Claims for Reinsurance (4) $ - 24,009 2 21,016 34,495 132 464 204,733 $ 284,851	c	Ceding net change in laims reserves (5) $ - 5,472 565 8,852 ) 531 336 3,354 ) 130,259 $ 124,957	Loss (profit) of Ceding reinsurance (6)=(1)-(2)-(3)- (4)-(5)	Loss (profit) of Ceding reinsurance (6)=(1)-(2)-(3)- (4)-(5)
			( (						( (			$ 270,116 25,684 49,913 28,949 26,076 28,436 26,183 32,989 $ 488,346

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

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The amount of the profits and losses at each insurance category and the calculations during January 1 to June 30, 2020 are as follows:

(1) Direct insurance

Direct insurance
Item Residential Earthquake Insurance General Personal Automobile Liability 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)		Premium revenues (1) $ 298,187 798,744 460,373 162,249 208,698 108,362 93,426 1,222,252 $ 3,352,291		Net change in unearned premium reserves (2) $ - 77,335 1,137 5,608 3,268 5,402 12,180 131,673 $ 236,603		Acquisition Cost of Insurance Contracts (3) $ 17,605 95,239 62,465 33,228 43,097 13,222 7,809 142,265 $ 414,930	Claims (including the claim expenses) (4) $ 1,700 414,071 267,910 13,365 85,280 31,214 615 504,103 $ 1,318,258	c	Net change in laims reserves (5) $ - 17,918 1,312 ) 92 ) 13,038 ) 30,746 ) 213 ) 60,771 $ 33,288	Profit (loss) of Insurance (6)=(1)-(2)-(3)- (4)-(5)
								( ( ( ( (			$ 278,882 194,181 130,173 110,140 90,091 89,270 73,035 383,440 $ 1,349,212

(2) Reinsurance assumed

Insurance type Residential Earthquake Insurance Marine Hull Insurance Compulsory Automobile Liability Insurance Typhoon and Flood Insurance Commercial earthquake insurance Nuclear Energy Insurance General Liability Insurance Fishing Vessel Insurance Foreign Inward Reinsurance - Aviation insurance Other Insurance (Note)		Reinsurance premium revenues (1) $ 35,345 3,030 68,519 6,586 8,536 2,558 217 5,152 659 96,252 $ 226,854		Net change in unearned premium reserves (2) $ 4,079 2,114 25 2,323 3,426 1,209 ) 4,818 ) 2,649 577 12,399 $ 21,565		Reinsurance commission expenditure (3) $ - 2 - 376 579 - 13 457 - 5,498 $ 6,925		Claims for reinsurance (4) $ 276 4,157 51,940 519 287 6 3,158 2,853 525 ) 94,456 $ 157,127	c	Net change in laims reserves (5) $ 366 ) 15,426 ) 5,072 1,382 ) 125 90 ) 443 ) 2,961 ) 917 ) 28,780 $ 12,392	Profit (loss) of reinsurance inward (6)=(1)-(2)-(3)- (4)-(5)	Profit (loss) of reinsurance inward (6)=(1)-(2)-(3)- (4)-(5)
			( (				(		( ( ( ( ( ( (		(	$ 31,356 12,183 11,482 4,750 4,119 3,851 2,307 2,154 1,524 44,881) $ 28,845

(3) Ceding reinsurance business

Insurance type Residential Earthquake Insurance Commercial earthquake insurance General Liability Insurance Marine Hull Insurance Typhoon and Flood Insurance Other Insurance (Note)		Reinsurance premium outward (1) $ 298,187 67,361 52,604 33,217 41,202 654,472 $ 1,147,043		Ceding net change in unearned premium reserves (2) $ - 10,446 3,354 ) 12,479 6,981 100,580 $ 127,132	i	Reinsurance commission ncome and fee income (3) $ 30,125 4,357 12,154 2,486 3,566 91,013 $ 143,701		Refundable Claims for Reinsurance (4) $ - 2,722 17,361 17,109 ) 1,399 330,227 $ 334,600	c	Ceding net change in laims reserves (5) $ - 2,348 ) 19,688 ) 9,772 ) 3,569 ) 37,619 $ 2,242	Loss (profit) of Ceding reinsurance (6)=(1)-(2)-(3)- (4)-(5)	Loss (profit) of Ceding reinsurance (6)=(1)-(2)-(3)- (4)-(5)
			(				(		( ( ( (			$ 268,062 52,184 46,131 45,133 32,825 95,033 $ 539,368

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

right for pursuit of recovery
Credit Insurance Miscellaneous Insurance Bonding Insurance Personal Comprehensive Insurance General Liability Insurance Engineering Insurance	June 30,2021 $ 31,505 1,144 2,008 48 11 1 $ 34,717	December 31, 2020 $ 31,580 610 2,148 48 11 1 $ 34,398	June 30,2020
				$ 34,968 2,050 2,255 49 11 1 $ 39,334

(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:

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.

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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.

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

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assets of such special reserves shall be transferred to Motor Vehicle Compensation Fund Accident.

XXVI. Claim liabilities to policyholders

(I) As of June 30, 2021, the information of the claim liabilities to the policyholders by the Company is summarized as the following:
The claim liabilities reported and paid, reported but not paid, and unreported to the policyholders

policyholders
Item Miscellaneous Insurance General Personal Automobile Liability Insurance Compulsory Automobile Liability Insurance One-year Commercial Fire Insurance Marine Cargo Insurance Compulsory Motorcycle Liability Insurance General Personal Automobile Physical Damage Insurance Other Insurance (Note)	Claims payable Reported and paid $ 1,600 - - - 39 - - 610 $ 2,249		Claim reserves
		Reported but notyetpaid $ 273,671 538,938 88,614 306,114 176,999 57,697 142,060 702,655 $2,286,748		Not yet reported $ 477,910 130,070 325,222 20,605 56,999 135,547 46,278 289,057 $1,481,688	Total
					$ 751,581 669,008 413,836 326,719 233,998 193,244 188,338 991,712 $3,768,436

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

paid claims to the policyholders

Insurance type Compulsory Automobile Liability Insurance Miscellaneous Insurance Marine Cargo Insurance Engineering Insurance Compulsory Motorcycle Liability Insurance General Liability Insurance Compulsory Commercial Automobile Liability Insurance Personal Accident Insurance Other Insurance (Note) Allowance loss		Claimpaid $ 14,273 13,772 13,019 4,202 4,075 3,637 2,744 2,247 38,971) 18,998 95) $ 18,903	Reported and paid $ - - 39 - - - - 290 - 329 ( 2) $ 327		Total
	( (		(	( (	$ 14,273 13,772 13,058 4,202 4,075 3,637 2,744 2,537 38,971) 19,327 97) $ 19,230

Reinsurance reserve assets - Claim recoverable from reinsurers to the reported but not paid and unreported ceding claims to the policyholders

Insurance type One-year Commercial Fire Insurance Marine Cargo Insurance Compulsory Automobile Liability Insurance Marine Hull Insurance Engineering Insurance Compulsory Motorcycle Liability Insurance Other Insurance (Note) Accumulated impairment		Reported but notyetpaid $ 199,317 158,840 36,347 60,148 66,274 10,471 152,626 $ 684,023		Not yet reported $ 10,900 45,100 145,927 17,100 2,700 55,596 89,015 $ 366,338		Total
					(	$ 210,217 203,940 182,274 77,248 68,974 66,067 241,641 1,050,361 314) $ 1,050,047

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

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(II) 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

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 notyetpaid $ 530,387 76,774 157,333 58,008 129,741 153,074 753,601 $1,858,918		Not yet reported $ 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

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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 notyetpaid $ 31,792 109,141 95,535 67,023 10,529 60,203 34,985 148,639 $ 557,847		Not yet reported $ 155,654 39,600 5,700 22,500 55,007 3,300 16,600 69,196 $ 367,557		Total
					(	$ 187,446 148,741 101,235 89,523 65,536 63,503 51,585 217,835 925,404 314) $ 925,090

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

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(III) As of June 30, 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

policyholders
Item General Personal Automobile Liability Insurance Compulsory Automobile Liability Insurance One-year Commercial Fire Insurance General Personal Automobile Physical Damage Insurance Compulsory Motorcycle Liability Insurance Marine Hull Insurance Marine Cargo Insurance Other Insurance (Note)	Claims payable Reported and paid $ 200 80 - 26 - - - 3,566 $ 3,872		Claim reserves
		Reported but notyetpaid $ 461,615 86,165 305,261 143,497 52,928 111,320 96,066 644,659 $1,901,511		Not yet reported $ 127,118 336,343 19,217 40,313 130,256 46,952 52,191 279,891 $1,032,281	Total
					$ 588,733 422,508 324,478 183,810 183,184 158,272 148,257 924,550 $2,933,792

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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 General Liability Insurance Compulsory Motorcycle Liability Insurance Commercial Earthquake Insurance General Personal Automobile Physical Damage Insurance One-year Commercial General Fire Insurance Engineering Insurance Compulsory Commercial Automobile Liability Insurance Fishing Vessel Insurance Personal Accident Insurance Other Insurance (Note) Allowance loss		Claimpaid $ 18,357 14,442 4,592 4,527 3,882 3,720 2,170 1,959 944 1,445 1,330 38,903) 18,465 92) $ 18,373	Reported and paid $ - 48 126 - - - - - 800 - - - 974 ( 5) $ 969		Total
	( (		(	( (	$ 18,357 14,490 4,718 4,527 3,882 3,720 2,170 1,959 1,744 1,445 1,330 38,903) 19,439 97) $ 19,342

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 Compulsory Automobile Liability Insurance Marine Hull Insurance Marine Cargo Insurance Fishing Vessel Insurance Compulsory Motorcycle Liability Insurance Other Insurance (Note) Accumulated impairment		Reported but notyetpaid $ 214,187 33,519 96,839 76,443 57,733 7,486 184,387 $ 670,594		Not yet reported $ 7,700 151,574 27,900 41,200 15,100 52,196 72,791 $ 368,461		Total
					(	$ 221,887 185,093 124,739 117,643 72,833 59,682 257,178 1,039,055 855) $ 1,038,200

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

XXVII. 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:
From January 1 to June 30, 2021

Insurancetype One-year Commercial Fire Insurance Cargo Insurance Aviation Insurance	Estimatedamount $ 177,315 97,617 30,190 $ 305,122	Amount after changes
		$ 177,629 97,617 30,190

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

From January 1 to June 30, 2020

Insurance type One-year Commercial Fire Insurance Fishing Vessel Insurance Cargo Insurance Aviation Insurance Marine Hull Insurance	Estimated amount $ 215,968 54,882 44,670 30,190 27,524 $ 373,234	Amount after changes
		$ 183,979 52,570 44,670 30,190 23,884

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

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(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 the period of January 1 to June 30 2021 and 2020 may increase NT$278 thousand or NT$1,168 thousand, or decrease NT$278 thousand or NT$758 thousand, respectively. The changed amount will directly affect the profit/loss of the period when changes occur. The abovementioned effects do not take into account of ceding reinsurance.

XXVIII. Information of risk management

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

==> picture [422 x 310] intentionally omitted <==

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

Risk management strategies of the Company:

(1) The standards of risk management established by Company include: insurance risk, credit risk, market risk, liquidity risk, operation risk and risk of match for asset and liability.
(2) Based on the operational plan and target of financial incomes, the risk appetite of the Company is set up as no less than 400% of the capital adequacy ratio.
(3) Establish the risk management procedures consistent of the business scale, nature, and complexity of the Company, so each risk is controlled to the acceptable extent.
(4) Effectively control the capital adequacy ratio by complying with the regulations of managing capital adequacy ratio by the competent authorities.
(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. 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
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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.
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. Charge of the executions of daily risk monitor, measurement, and evaluation, and independent from the business to perform the duties.
B. 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.
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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. 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. Business units’ duties to execute the risk management are as follows:
- a. Identifying risks and reporting the exposures.
- b. Measuring the extent (quantifying or qualifying) of impact when such risks materialize, and convey the risk information in a timely and correct manner.
- 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

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the utilization of major risk limits, to monitor the risk regularly. The risk management report is submitted to the Risk Management Committee every quarter, and the holistic risk management report is submitted to the Board of Director every six months.

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

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

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

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risks. The retained limits of insurance for each hazard unit of each insurance type are disclosed as the following:

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June 30, 2021

Insurance type
One-year Commercial Fire Insurance
One-year Residential Fire Insurance and Allied Perils
Insurance
Marine Cargo Insurance
Inland Marine Insurance
Marine Hull Insurance (casualty insurance of crews
and passengers)
Marine Hull Insurance (other than the casualty
insurance of crews and passengers)
Fishing Vessel Insurance
Aviation Insurance
Engineering Insurance
Credit Insurance
Bonding Insurance
General Liability Insurance
Professional Liability Insurance
Commercial Comprehensive Insurance
Miscellaneous Insurance
Personal Comprehensive Insurance
Personal Accident Insurance
Health Insurance
Automobile Physical Damage Insurance and Allied
Perils Insurance
Automobile Liability Insurance

Unit: NT$ Thousand
Highest retention

NT$ 1,500,000
NT$ 480,000
US$ 5,000
US$ 1,000
US$ 25,000
US$ 5,000
US$ 1,500
US$ 3,000
NT$ 1,500,000
NT$ 300,000
NT$ 300,000
NT$ 300,000
NT$ 300,000
NT$ 1,200,000
NT$ 1,200,000
NT$ 40,000
NT$ 40,000
NT$ 10,000
NT$ 30,000
NT$ 200,000

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

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December 31, 2020

Unit: NT$ Thousand

Insurance type
One-year Commercial Fire Insurance
One-year Residential Fire Insurance and Allied Perils
Insurance
Marine Cargo Insurance
Inland Marine Insurance
Marine Hull Insurance (casualty insurance of crews and
passengers)
Marine Hull Insurance (other than the casualty insurance
of crews and passengers)
Fishing Vessel Insurance
Aviation Insurance
Engineering Insurance
Credit Insurance
Bonding Insurance
General Liability Insurance
Professional Liability Insurance
Commercial Comprehensive Insurance
Miscellaneous Insurance
Personal Comprehensive Insurance
Personal Accident Insurance
Health Insurance
Automobile Physical Damage Insurance and Allied Perils
Insurance
Automobile Liability Insurance

Highest retention

NT$ 1,500,000
NT$ 480,000
US$ 5,000
US$ 1,000
US$ 25,000
US$ 3,000
US$ 1,200
US$ 3,000
NT$ 1,500,000
NT$ 300,000
NT$ 300,000
NT$ 300,000
NT$ 300,000
NT$ 1,200,000
NT$ 1,200,000
NT$ 40,000
NT$ 40,000
NT$ 10,000
NT$ 30,000
NT$ 120,000

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

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June 30, 2020

Unit: NT$ Thousand

Highest retention

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

(VI) Approaches of managing assets and liabilities

When implementing various business, the case officers shall manage and monitor the potential risks in the day-to-day operations based on the internal control procedures and SOP, to prevent the mismatch between the cash flows from liabilities and assets caused by the behaviors of policyholders.

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

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

103 -

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

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

(VIII) Explanation of the insurance risk concentration

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

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

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

(IX) The sensitivities of insurance risks

Unit: NT$ Thousand

Year From January 1 to June 30, 2021 From January 1 to June 30, 2020	The impact to the profit/loss when the expected loss ratio increase 5% Before holding the reinsurance After holding the reinsurance ($ 120,975) ($ 102,375) ($ 65,905) ($ 50,505)	The impact to the profit/loss when the expected loss ratio increase 5% Before holding the reinsurance After holding the reinsurance ($ 120,975) ($ 102,375) ($ 65,905) ($ 50,505)	The impact to the profit/loss when the expected loss ratio decrease 5%	The impact to the profit/loss when the expected loss ratio decrease 5%	The impact to the profit/loss when the expected loss ratio decrease 5%
	Before holding the reinsurance ($ 120,975) ($ 65,905)		Before holding the reinsurance $ 116,790 $ 62,785	After holding the reinsurance
	( (	( (			$ 98,490 $ 47,985

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 during January 1 to June 30, 2021 are as the followings:

Unit: NT$ Thousand

Incurred accumulated claims (claim expenses included)

Year/Month of the Accident 2017 2018 2019 2020 2021	12 $ 2,013,877 2,239,137 2,136,349 2,288,237 1,647,119	24 $ 2,087,243 2,298,119 2,204,071 2,469,542	36 $ 2,073,409 2,263,292 2,207,067	48 $ 2,070,556 2,262,487	60
					$ 2,071,049

Note: the compulsory automobile insurance, nuclear energy insurance and residential earthquake insurance are excluded.
The development trend of claims during January 1 to June 30, 2020 are as the followings:

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 1,054,863	24 $ 2,499,139 2,087,243 2,298,082 2,233,735	36 $ 2,452,145 2,073,409 2,284,982	48 $ 2,417,893 2,074,996	60
					$ 2,411,369

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

XXIX. 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)

Foreign assets	J	une 30,202	1	De	cember 31,2	020	J	une 30,202	0
	Foreign Currency	Exchange rate	Carrying Amount	Foreign Currency	Exchange rate 28.48 4.31 28.48	Carrying Amount	Foreign Currency	Exchange rate	Carrying Amount
	$ 30,559 66,231 1,330	27.86 4.31 27.86	$ 851,369 285,457 37,056	$ 30,521 55,942 241		$ 869,245 241,109 6,862	$ 32,214 56,123 1,317	29.63 4.19 29.63	$ 954,511 235,155 39,033
Monetary items USD RMB Foreign liabilities
Monetary items USD

105 -

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

follows:

follows:
Foreign Currency USD RMB	FromJanuary1 to June 30,2021 Exchangerate Foreign exchange income or loss, net 27.86 ( $ 16,213 ) 4.31 ( 383) ($ 16,596)	FromJanuary1 to June 30,2020
	Exchangerate 27.86 4.31	Exchangerate 29.63 4.19	Foreign exchange income or loss, net
			( $ 11,391 ) ( 4,511) ($ 15,902)

XXX. 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)

XXXI. 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.

106 -

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	$ 275,301	$ 145,949	$ 36,123

107 -

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.

108 -

AI assistant

TFMI — Interim / Quarterly Report 2021

52200_rns_2021-12-09_21ef789a-9d61-4c53-beae-e3b0f7f8ffac.pdf

Taiwan Fire & Marine Insurance Co., Ltd.

§ TABLE OF CONTENTS §

ICPA’s Report

Audit Opinions

Bases for the Audit Opinions

Key Matters Being Audited

CLAIM RESERVES

Responsibilities of Management and Governance Unit in Consolidated Financial Statement

CPAs Responsibilities in Auditing Consolidated Financial Statements

Taiwan Fire & Marine Insurance Co., Ltd.

BALANCE SHEET

Taiwan Fire & Marine Insurance Co., Ltd.

STATEMENT OF COMPREHENSIVE INCOME

Taiwan Fire & Marine Insurance Co., Ltd. STATEMENTS OF CHANGES IN EQUITY From January 1 to June 30 of 2021 and 2020

Taiwan Fire & Marine Insurance Co., Ltd. STATEMENTS OF CASH FLOWS

Taiwan Fire & Marine Insurance Co., Ltd.

Notes to Financial Statement

I. Company profile

II. Date and procedure for authorization of financial statements

IFRS 17 “Insurance Contracts” and Related Amendments

Measurement of the Initial Recognitions

Subsequent Measuring

Onerous Contract

Premium Allocation Approach

Discretionary Participation Feature Investment Contract

Modification and Derecognition

Transitional Regulations

IV. Summary of significant accounting policies

3. Insurance liabilities

C. Special reserves for other special needs

(4) Premium deficiency reserves

(5) Liability adequacy reserves

(6) Unqualified reinsurance reserves

V. Major sources of major accounting judgments, estimate and hypotheses

Claim liabilities arising from insurance contracts

VI. Cash and cash equivalents

(I) Receivables

VIII. Financial instruments measured at fair values through profit and/or loss

IX. Financial assets at fair value through other comprehensive income

(II) Investments in liability instruments

X. Credit risks management for Investments in liability instruments

June 30, 2021

December 31, 2020

June 30, 2020

June 30, 2021

June 30, 2020

XII. Other financial assets - net

XIII. Investment properties

(Continued)

XIV. Property and equipment

XV. Lease agreement

(I) Right-of-use assets

(III) Major lessee activities and terms and conditions

(IV) Other information of leases

XVI. Refundable deposit

(Continued)

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

(V) Reinsurance reserve asset and insurance liabilities

XIX. Equity

(I) Capital

Common Stock

(IV) Special reserve

(V)

XX. Net Income from continuing Operation

(I) Gain (loss) on financial assets and liabilities at fair value through profit or loss

(III) Gain (loss) on investment properties

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

(V) Gain (loss) of foreign currency exchange

Percentage of estimation

XXI. Income tax of the units in continued business operation

(IV) Information related to tax credit against loss

(V) Verification of income tax

XXII. Earnings (loss) Per Share

Current net income (loss)

XXIII. Financial instruments

December 31, 2020

June 30, 2020

TFMI Interim / Quarterly Report 2021