TFMI — Interim / Quarterly Report 2021

Dec 9, 2021

Stock Code: 2832

Taiwan Fire & Marine Insurance Co., Ltd.

Financial Reports and ICPA’s Review Report Third Quarter, 2021 and 2020

==> picture [382 x 92] intentionally omitted <==

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

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§ TABLE OF CONTENTS §

ITEM I. COVER II. TABLE OF CONTENTS III. ICPA’S REVIEW 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 4 5 ~ 6 7 8 ~ 9 10 10 10 ~ 16 16 ~ 19 19 19 ~ 61 62 ~ 68 - - - 35 68 ~ 99 99 99 99 99, 102 99 ~ 100	NOTE NO.
		- - - - - - - 1 2 3 4 5 6 ~ 23 24 - - - 18 25 ~ 29 30 30 30 30 31

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ICPA’s Review Report

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

Prelude

We, as the CPAs, have completed the audit of the balance sheets dated September 30 of 2021 and 2020 and Statement of Comprehensive Income from July 1 to September 30 of 2021 and 2020 and from January 1 to September 30 of 2021 and 2020, statements of changes in equity and statements of cash flows from January 1 to September 30 of 2021 and 2020, and notes to the financial statements (including summaries of major accounting policies) of Taiwan Fire & Marine Insurance Co., Ltd.. Based on the Regulations Governing the Preparation of Financial Reports by Insurance Enterprises, and the International Accounting Standards No. 34 “Interim Financial Reporting” recognized and released by the Financial Supervisory Commission, the preparation of financial statements fairly presented is the responsibility of the management. The responsibility of the CPAs is to conclude the financial statements based on the result of review. Scope

The CPAs have performed the review based on Statements on Auditing Standards No. 65 “reviews of financial statement.” The procedures performed during the review of financial statements include inquiries (mainly the inquiries to the personnel in charge of finance and accounting affairs), analytical procedures and other review procedures. The scope of review is apparently smaller than the scope of an audit; therefore the CPAs may not detect all the material matters that may be identifiable under audit, and thus no audit opinion may be provided. Conclusion

Our audit results found no proof showing that the above-mentioned financial statements, in all major respects, were not 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 not sufficient to show the financial standing of Taiwan Fire & Marine Insurance Co., Ltd. on September 30 of 2021 and 2020, its financial performance between July 1 and September 30 of 2021 and 2020, and its financial performance and cash flows between January 1 and September 30 of 2021 and 2020.

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

October 29, 2021

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

September 30, 2021, and December 31, and September 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) 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) INSURANCE LIABILITIES (Note 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		September 30, 2021 (Reviewed) Amount % $ 4,455,389 22 100,099 1 528,209 3 87,879 - 716,187 4 6,321 - 2,219,937 11 273,258 1 2,398,851 12 5,004,541 24 2,148,525 10 12,045,112 58 9,518 - 126,544 1 1,938,897 9 2,074,959 10 458,173 2 38,535 - 11,212 - 84,606 - 688,136 4 68,413 - 756,549 4 $ 20,647,043 100 $ 5,333 - 238,926 1 343,662 2 479,422 2 1,067,343 5 95 - 59,606 - 4,109,501 20 3,327,606 16 2,154,892 11 5,842 - 9,597,841 47 79,401 1 264,150 1 31,843 - 43,199 - 75,042 - 11,143,478 54 3,622,004 18 1,915 - 97,047 - 98,962 - 2,524,209 12 2,543,851 12 344,889 2 5,412,949 26 369,650 2 9,503,565 46 $ 20,647,043 100		December 31, 2020 (Audited) 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		September 30, 2020 (Reviewed)	September 30, 2020 (Reviewed)
			Amount $ 4,455,389 100,099 528,209 87,879 716,187 6,321 2,219,937 273,258 2,398,851 5,004,541 2,148,525 12,045,112 9,518 126,544 1,938,897 2,074,959 458,173 38,535 11,212 84,606 688,136 68,413 756,549 $ 20,647,043 $ 5,333 238,926 343,662 479,422 1,067,343 95 59,606 4,109,501 3,327,606 2,154,892 5,842 9,597,841 79,401 264,150 31,843 43,199 75,042 11,143,478 3,622,004 1,915 97,047 98,962 2,524,209 2,543,851 344,889 5,412,949 369,650 9,503,565 $ 20,647,043		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 $ 2,829,717 94,719 440,656 133,058 668,433 - 2,040,047 226,308 3,093,607 4,621,483 2,291,588 12,273,033 7,088 257,654 1,730,692 1,995,434 354,712 42,597 5,306 34,522 764,180 43,939 808,119 $ 19,011,873 $ 3,662 126,012 310,831 437,417 877,922 15,484 70,068 3,388,041 2,839,451 2,121,882 7,271 8,356,645 83,721 266,669 35,199 39,034 74,233 9,744,742 3,622,004 1,915 97,047 98,962 2,381,521 2,351,533 884,091 5,617,145 70,980) 9,267,131 $ 19,011,873	%
						(		15 1 2 1 4 - 11 1 16 25 12 65 - 1 9 10 2 - - - 4 - 4 100 - 1 2 2 5 - - 18 15 11 - 44 1 1 - - - 51 19 - - - 13 12 5 30 - 49 100

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

Chairman: Steve Lee

President: Chao-Feng Chen

Chief Accountant: Pi-Chen Wang

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Taiwan Fire & Marine Insurance Co., Ltd.

Statement of Comprehensive Income From July 1 to September 30 of 2021 and 2020, and from January 1 to September 30 of 2021 and 2020. (Reviewed only, not audited based on the GAAS)

Unit: NT$ thousand, except EPS (loss) is NT$

			From July 1 to September	From July 1 to September	From July 1 to September	From July 1 to September		From July 1 to September	From July 1 to September	From July 1 to September	From July 1 to September		From January 1 to	From January 1 to	From January 1 to		From January 1 to	From January 1 to
			30,2021					30,2020					September 30,2021				September 30,2020
Code			Amount		%			Amount			%		Amount		%		Amount	%
	OPERATING REVENUES
	Retained earned premium
41110	Direct insurance
	premium revenues
	(Note 24, 25)		$ 1,645,165		83			$ 1,491,998			104		$ 6,944,733		124		$ 4,844,289	120
41120	Reinsurance premium
	revenues		104,305			5		94,503			7		330,988		6		321,357	8
41100	Premium revenues		1,749,470		88			1,586,501			111		7,275,721		130		5,165,646	128
51100	Less: Reinsurance
	premium outward		474,972		24			427,388			30		1,616,645		29		1,574,431	39
51310	Less: Net change in
	unearned premium
	reserves (Note 18,
	25)	(	484,639)		(24)		(	30,674)		(	2)		608,631		11		100,362	3
41130	Total retained
	earned
	premium		1,759,137		88			1,189,787			83		5,050,445		90		3,490,853	86
41300	Reinsurance commission
	earned		54,656			3		47,975			3		176,814		3		161,551	4
41400	Handing fee earned		15,309			1		15,039			1		45,879		1		45,164	1
	Net gains on investments
41510	Interest income		26,883			1		29,304			2		80,569		1		90,726	2
41521	Gain on financial
	assets and liabilities
	at fair value through
	profit or loss (Note
	20)	(	6,581 )			-		11,716			1		48,669		1		40,484	1
41527	Realized gain and
	losses on financial
	assets at fair value
	through other
	comprehensive
	income (Note 20)		131,820			6		118,676			8		142,934		2		141,258	4
41540	Share of loss on
	associates and joint
	ventures recognized
	using equity method	(	2,043 )			-		5,179			-		34,080		1		9,419	-
41550	Exchange loss -
	investment (Note
	20)	(	721 )			-	(	7,723 )			-	(	15,138 )		-	(	23,642 )	-
41570	Gain (loss) on
	investment
	properties (Note 20,
	24)		18,646			1		22,752			2		59,052		1		89,704	2
41585	Impairment loss on
	investment assets
	(Note 20)	(		31)		-	(		12)		-			94	-		71	-
41000	Total operating
	revenues		1,997,075		100			1,432,693			100		5,623,398		100		4,045,588	100
	OPERATING COSTS
	Retained claims
51200	Claims incurred (Note
	24, 25)		1,944,703		97			887,118			62		3,787,651		67		2,362,503	58
41200	Less: Claims recovered
	from reinsurers		167,368			8		272,325			19		452,219		8		606,925	15
51260	Total retained
	claims		1,777,335		89			614,793			43		3,335,432		59		1,755,578	43
	Movement of insurance
	liability (Note 18, 25)
51320	Net change in claims
	reserves	(	474,427 )		( 24 )			37,012			3		274,707		5		80,450	2
51340	Net change in special
	reserves		7,366			1	(	9,236 )		(	1 )		36,193		-	(	20,067 )	-
51350	Net change in premium
	deficiency reserves	(	793)			-		187			-	(	1,746)		-		117	-
51300	Total net change
	in insurance
	liability	(	467,854)		(23)			27,963			2		309,154		5		60,500	2
(To be continued)

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(Continued)

			From July 1 to September	From July 1 to September	From July 1 to September	From July 1 to September		From July 1 to September	From July 1 to September	From July 1 to September	From July 1 to September			From January	1	to			From January	1	to
				30,2021					30,2020					September 30,	2021				September 30,	2020
Code				Amount		%			Amount		%			Amount		%			Amount		%
51500	Commission expenses (Note
	24, 25)		$	235,158		12		$	213,140		15		$	1,108,459		20		$	634,995		16
51800	Other operating cost			9,922		-			12,002		-			40,184		1			37,228		1
51000	Total operating costs			1,554,561		78			867,898		60			4,793,229		85			2,488,301		62
	OPERATING EXPENSES (Note
	4, 17, 20 and 24)
58100	Service Expenses			176,520		9			214,367		15			663,183		12			640,777		16
58200	Administrative Expenses			92,268		5			107,431		8			267,131		5			292,530		7
58300	Employee training expenses			476		-			502		-			1,001		-			890		-
58400	Impairment loss and reversal
	gain on expected credit -
	non- investment	(		28,938)	(	2)			2,727		-			54,359		1			9,590		-
58000	Total operating
	expenses			240,326		12			325,027		23			985,674		18			943,787		23
61000	OPERATING INCOME (LOSS)			202,188		10			239,768		17	(		155,505 )	(	3 )			613,500		15
59000	NON-OPERATING INCOME
	AND EXPENSES	(		1,571)		-			139		-	(		2,956)		-			2,841		-
62000	NET INCOME (LOSS) BEFORE
	INCOME TAX FROM
	CONTINUING OPERATION			200,617		10			239,907		17	(		158,461 )	(	3 )			616,341		15
63000	INCOME TAX BENEFITS
	(EXPENSES) (Notes 4 and 21)	(		44,624)	(	2)	(		16,510)	(	1)			49,715		1	(		61,271)	(	1)
66000	NET PROFIT FOR THE
	PERIOD (LOSS)			155,993		8			223,397		16	(		108,746)	(	2)			555,070		14
	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	(		3,820 )		-	(		27,611 )	(	2 )			455,847		8	(		40,443 )	(	1 )
	Items that may be
	reclassified subsequently
	to profit or loss
83290	Debt instrument profit
	or loss measured at
	fair value through
	other comprehensive
	income	(		6,859)	(	1)			1,007		-	(		25,648)		-			26,831		-
83000	Other comprehensive
	income, net of
	income tax	(		10,679)	(	1)	(		26,604)	(	2)			430,199		8	(		13,612)	(	1)
85000	TOTAL COMPREHENSIVE
	INCOME IN THE PERIOD		$	145,314		7		$	196,793		14		$	321,453		6		$	541,458		13
	EARNINGS (LOSS) PER
	SHARE (Note 22)
97500	Basic earnings (loss) per
	share		$	0.43				$	0.62			(	$	0.30)				$	1.53
98500	Diluted earnings (loss) per
	share		$	0.43				$	0.62			(	$	0.30)				$	1.53

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 September 30 of 2021 and 2020 (Reviewed only, not audited based on the GAAS)

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 September 30, 2020 D3 Other comprehensive income after taxes from January 1 to September 30, 2020 D5 Total comprehensive income from January 1 to September 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 September 30, 2020 A1 Balance at January 1, 2021 Appropriation of 2020 earnings B1 Appropriation of Legal reserve B5 Cash dividends distributed by the Company B17 Reversal of special Reserve D1 Net loss from January 1 to September 30, 2021 D3 Other comprehensive income after taxes from January 1 to September 30, 2021 D5 Total comprehensive income from January 1 to September 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 September 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	Unappropriated earnings $ 756,029 ( 139,252 ) ( 362,201 ) 64,018 555,070 - 555,070 10,427 $ 884,091 $ 797,593 ( 142,688 ) ( 398,421 ) 27,858 ( 108,746 ) - ( 108,746) 169,293 $ 344,889	Other Equity (Note 19) Unrealized Gain and Losses on Financial Assets at Fair Value Through Other Comprehensive Income ( $ 46,941 ) - - - - ( 13,612) ( 13,612) ( 10,427) ($ 70,980) $ 108,744 - - - - 430,199 430,199 ( 169,293) $ 369,650	Stockholders’ Equity	Stockholders’ Equity
					Legal reserve $ 2,242,269 139,252 - - - - - - $ 2,381,521 $ 2,381,521 142,688 - - - - - - $ 2,524,209	Special reserve $ 2,415,551 - - ( 64,018 ) - - - - $ 2,351,533 $ 2,571,709 - - ( 27,858 ) - - - - $ 2,543,851
						( (	( ( ( ( ( (	( ( ( ( ( (	( ( ( (	$ 9,087,874 - 362,201 ) - 555,070 13,612) 541,458 - $ 9,267,131 $ 9,580,533 - 398,421 ) - 108,746 ) 430,199 321,453 - $ 9,503,565

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 September 30 of 2021 and 2020

(Reviewed only, not audited based on the GAAS)

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 A29900 Other non-operating income A50000 Changes in Operating Assets and Liabilities A51110 Decrease (Increase) in notes receivable A51120 Premiums receivable increase A51130 Other accounts receivable increase A51140 Increase in financial assets at fair value through profit or loss	From January 1 to September 30,2021 ( $ 158,461 ) 44,001 3,831 ( 149,475 ) ( 40,320 ) ( 1,808 ) 1,228 ( 80,569 ) 917,785 ( 94 ) 54,359 ( 34,080 ) ( 3,688 ) - 12,791 ( 4 ) ( 49 ) ( 4,068 ) ( 97,328 ) ( 3,497 ) ( 240,928 )	From January 1 to September 30,2020
		$ 616,341 44,176 2,349 ( 147,459 ) ( 30,229 ) ( 4,054 ) 1,222 ( 90,726 ) 160,862 ( 71 ) 9,589 ( 9,419 ) ( 32,206 ) ( 3,973 ) 18,647 ( 32 ) - 26,333 ( 45,225 ) ( 34,783 ) ( 244,466 )

(To be continued)

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(Continued)

Code A51141 Decrease (Increase) of financial assets at fair value through other comprehensive income A51160 Decrease (increase) in other financial assets A51170 Decrease (Increase) in reinsurance contract asset A51990 Increase in other assets A52120 Increase (Decrease) in Claims Payable A52140 Increase (decrease) in commissions payable A52150 Decrease in due to reinsurers and ceding companies A52160 Decrease in other payables A52200 Decrease in employees’ benefit liability A52990 Increase in other liabilities A33000 Cash inflow (outflow) from operations A33100 Interest received A33200 Dividends received A33500 Income tax paid AAAA Net cash inflow (outflow) from operating activities CASH FLOWS FROM INVESTING ACTIVITIES B02700 Payments for property and equipment B03800 Decrease in refundable deposits B04500 Payments for intangible assets B05400 Payments for investment properties B05500 Proceeds from disposal of investment properties BBBB Net cash inflow from investing activities CASH FLOWS FROM FINANCING ACTIVITIES C03100 Decrease in guarantee deposits received C04020 Repayment of the principal of the lease liabilities C04500 Distribute cash dividends CCCC Net cash outflow used in financing activities EEEE NET INCREASE (DECREASE) IN CURRENT CASH AND CASH EQUIVALENTS 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 September 30,2021 $ 85,643 570,656 61,726 ( 30,082 ) 5,333 99,879 ( 25,333 ) ( 6,798 ) ( 2,977 ) 174 977,847 77,852 150,457 ( 45,759) 1,160,397 ( 4,827 ) 26,724 ( 5,086 ) ( 1,165 ) 21,297 36,943 ( 3,056 ) ( 25,004 ) ( 398,421) ( 426,481) 770,859 3,684,530 $ 4,455,389	From January 1 to September 30,2020	From January 1 to September 30,2020
	( ( ( ( ( ( ( ( ( ( ( (	( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 314,058 ) 136,657 ) 133,933 ) 5,615 ) 742 ) 137 ) 79,601 ) 26,403 ) 406 ) 2,864 457,812 ) 82,574 148,509 123,374) 350,103) 5,358 ) 19,873 2,947 ) 342 ) 140,339 151,565 63 ) 24,774 ) 362,201) 387,038) 585,576 ) 3,415,293 $ 2,829,717

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

Chairman: Steve Lee President: Chao-Feng Chen

Chief Accountant: Pi-Chen Wang

• 9 -

Taiwan Fire & Marine Insurance Co., Ltd.

Notes to Financial Statement

From January 1 to September 30 of 2021 and 2020

(Reviewed only, not audited based on the GAAS)

(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 September 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 October 29, 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.

• 10 -

• (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.

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.

• 11 -

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

Newly Issued/ Amended/ Revised Standards and Interpretations “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”, amendments to IFRS 10 and IAS 28. IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IAS 1, “Classification of Liabilities as Current or Non-Current” Amendments to IAS 1, “Disclosure of Accounting Polices” Amendments to IAS 8, “Definition of Accounting Estimates” Amendments to IAS 12, “Deferred Tax Related to Assets and Liabilities Arising from A Single Transaction”

The effective date promulgated by IASB (Note 1)

To be determined January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) January 1, 2023 (Note 3) January 1, 2023 (Note 4)

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

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

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

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

IFRS 17 “Insurance Contracts” and Related Amendments

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

Level of Aggregation of Insurance Contracts

The Company shall identify portfolios of insurance contracts. A portfolio comprises contracts subject to similar risks and managed together. Contracts within a certain product line would be expected to have similar risks and hence would be

• 12 -

expected to be in the same portfolio if they are managed together. The Company shall at least divide the issued insurance portfolios as:

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

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

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

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

Recognition

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

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

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

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

Measurement of the Initial Recognitions

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

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

• 13 -

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

Onerous Contract

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

Premium Allocation Approach

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

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

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

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

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

1. is the premium received at initial recognition;

2. minus any insurance acquisition cash flows on the same day; and

3. 14 -

4. plus or minus the derecognition at the date of initial recognition of the following items:

5. (1) all insurance acquisition cash flow assets; and

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

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

Discretionary Participation Feature Investment Contract

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

Modification and Derecognition

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

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

Transitional Regulations

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

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

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

• 15 -

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.

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:

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

2. 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).

3. 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

1. Lease

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

(1) If the Company is the lessor

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

• 16 -

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

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

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

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

(2) If the Company is the lessee

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

The right-of-use assets are originally measured at the costs (including the original measured amount of lease liability, the lease

• 17 -

payment paid before the lease starts, and minus the received lease incentives); subsequently, they are measured at the costs deducting the accumulated depreciation and the loss of impairment, and the re-measurement of the lease liability is adjusted. Unless being qualified for the defined investment oriented property, the right-of-use assets are individually expressed in the balance sheets. Notwithstanding, for recognition and measurement of the right-of-use assets defined as investment property, please refer to the material accounting policies in the 2020 Annual Financial Report.

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

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

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

• 18 -

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

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

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

2. 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.

1. 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.

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

Please refer to the material accounting judgement, estimates, and the major sources of uncertainties for the estimates specified in the 2020 Annual Financial Report.

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VI. Cash and cash equivalents

Cash and cash equivalents
Cash on hand and working capital Bank’s notes and current deposit Cash equivalents Commercial paper Time deposits in banks due within 3 months in the date of initial maturity Less: Deductible of the Refundable Deposits (Note 16)	September 30, 2021 $ 47,018 2,880,272 1,348,760 235,200 ( 55,861) $ 4,455,389	December 31, 2020 $ 31,015 2,352,720 1,048,190 340,190 ( 87,585) $ 3,684,530	September 30, 2020
	(		(	$ 31,017 2,126,113 499,436 241,690 68,539) $ 2,829,717

The market interest rate ranges of bank time deposits and commercial paper on the balance sheet date are as follows:

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	September 30, 2021 0.06%～0.41% 0.19%～0.22% September 30, 2021 $ 101,110 37 ( 1,048) $ 100,099 $ 407,808 185,309 ( 64,908) $ 528,209	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	September 30, 2020
				0.06%～0.41% 0.25%～0.28% September 30, 2020
		( (	( (	$ 95,675 - ( 956) $ 94,719 $ 390,178 64,385 ( 13,907) $ 440,656

(To be continued)

• 20 -

(Continued)

Interest receivable Other receivable Stock dividends receivable Proceeds receivable from sale of investments Other receivable - Non-accrual loan Less: allowance loss Other receivables	September 30, 2021 $ 61,040 17,430 2,325 - 14,265 ( 7,181) $ 87,879	December 31, 2020 $ 58,323 13,133 - - 19,366 ( 6,833) $ 83,989	September 30, 2020
	(	(	$ 63,113 48,174 - 9,815 15,278 ( 3,322) $ 133,058

(I) Receivables

To reduce the credit risks, the management of the Company has assigned the premium section to track the overdue payment, to ensure the proper actions have been taken for the recovery of overdue receivables. Besides, on the balance sheet dates, the Company review the recoverable amount of the receivables again one by one, to ensure the unrecoverable receivables are provided for the proper allowance loss. Therefore, the management of the Company believes the credit risks of the Company is significantly reduced.

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

Where any evidence shows that the counterparties of transactions have severe financial difficulties, and the Company cannot reasonably expect the recoverable amount, e.g. the counterparty is being liquidated, the Company writes off the related receivables upon the resolution passed by the Board of Directors. However the

• 21 -

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 September 30, 2021 and 2020 are as follows: September 30, 2021

Balance - beginning Add: Provision of the period Balance - ending	12-month expected credit loss I $ 853 1,798 $ 2,651	Lifetime expected credit loss II $ 1,214 34,744 $ 35,958	Lifetime expected credit loss III $ 520 228 $ 748	Impairment provided based in IFRS 9 $ 2,587 36,770 $ 39,357	Impairment based on the “Regulations Governing the Procedures for Insurance Enterprises to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans” $ 15,448 18,332 $ 33,780		Total
							$ 18,035 55,102 $ 73,137

September 30, 2020

Balance - beginning Add: Provision (reversal) in the period Balance - ending	12-month expected credit loss I $ 3,195 ( 2,252) $ 943	Lifetime expected credit loss II $ 2,735 2,279 $ 5,014	Lifetime expected credit loss III $ 825 380 $ 1,205	Impairment provided based in IFRS 9 $ 6,755 407 $ 7,162	Impairment based on the “Regulations Governing the Procedures for Insurance Enterprises to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans” $ 5,480 5,543 $ 11,023		Total
	(						$ 12,235 5,950 $ 18,185

The allowance loss as of September 30, 2021 and 2020 increased by NT$55,102 thousand and NT$5,950 thousand, respectively, mainly as a result of the net increase of NT$154,592 thousand and NT$41,196 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$37 thousand, NT$60,418 thousand, and NT$6,087 thousand, respectively, as of September 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.

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For the notes receivable, premium receivable, and non-accrual loans in other receivables, the allowances have been provided as NT$0 thousand, NT$10,416 thousand, and NT$3,215 thousand, respectively, as of September 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	September 30, 2021 $ 466,227 123,570 95,172 103,607 748 $ 789,324	December 31, 2020 $ 639,660 19,574 7,283 7,717 9,261 $ 683,495	September 30, 2020	September 30, 2020
				$ 525,128 81,844 66,937 11,504 1,205 $ 686,618

The aging analysis is conducted based on the accounted dates.

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

September 30, 2021 December 31, 2020 Compulsory measurement at fair value through profit and loss - TWSE/GTSM listed shares $ 251,667 $ 204,920 - Beneficiary certificates of funds 243,972 156,780 - Domestic financial bonds 1,203,650 1,054,592 - Domestic corporate bonds 520,648 522,397 $ 2,219,937 $ 1,938,689 Financial assets at fair value through other comprehensive income September 30, 2021 December 31, 2020 Equity instruments at fair value through other comprehensive income $ 3,955,226 $ 3,668,717 Bond instruments measured at fair value through other comprehensive income 1,658,445 1,612,245 Deductible of refundable deposits ( 609,130) ( 622,187) $ 5,004,541 $ 4,658,775	September 30, 2021 December 31, 2020 Compulsory measurement at fair value through profit and loss - TWSE/GTSM listed shares $ 251,667 $ 204,920 - Beneficiary certificates of funds 243,972 156,780 - Domestic financial bonds 1,203,650 1,054,592 - Domestic corporate bonds 520,648 522,397 $ 2,219,937 $ 1,938,689 Financial assets at fair value through other comprehensive income September 30, 2021 December 31, 2020 Equity instruments at fair value through other comprehensive income $ 3,955,226 $ 3,668,717 Bond instruments measured at fair value through other comprehensive income 1,658,445 1,612,245 Deductible of refundable deposits ( 609,130) ( 622,187) $ 5,004,541 $ 4,658,775	September 30, 2021 December 31, 2020 Compulsory measurement at fair value through profit and loss - TWSE/GTSM listed shares $ 251,667 $ 204,920 - Beneficiary certificates of funds 243,972 156,780 - Domestic financial bonds 1,203,650 1,054,592 - Domestic corporate bonds 520,648 522,397 $ 2,219,937 $ 1,938,689 Financial assets at fair value through other comprehensive income September 30, 2021 December 31, 2020 Equity instruments at fair value through other comprehensive income $ 3,955,226 $ 3,668,717 Bond instruments measured at fair value through other comprehensive income 1,658,445 1,612,245 Deductible of refundable deposits ( 609,130) ( 622,187) $ 5,004,541 $ 4,658,775	September 30, 2020
			$ 201,073 152,502 1,154,710 531,762 $ 2,040,047 September 30, 2020
Equity instruments at fair value through other comprehensive income Bond instruments measured at fair value through other comprehensive income Deductible of refundable deposits	September 30, 2021 $ 3,955,226 1,658,445 ( 609,130) $ 5,004,541
	(	(	$ 3,523,385 1,767,094 ( 668,996) $ 4,621,483

IX. Financial assets at fair value through other comprehensive income

• 23 -

(I) Investments in equity instruments

Domestic investment TSEC/GTSM listed shares Unlisted Shares	September 30, 2021 $ 3,510,119 445,107 $ 3,955,226	December 31, 2020 $ 3,310,661 358,056 $ 3,668,717	September 30, 2020
			$ 3,153,942 369,443 $ 3,523,385

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.

From January 1 to September 30, 2021 and 2020, the Company adjusted the investment positions to diversify risks, and the sold some of the common shares at fair value for NT$856,966 thousand and NT$44,282 thousand. The related other equity - unrealized valuation gains and losses on other financial assets at fair value through comprehensive income, NT$169,293 thousand and NT$10,427 thousand were transferred to the retained earnings.

The Company recognized the dividend revenues, NT$130,012 thousand, NT$118,676 thousand, NT$141,126 thousand, and NT$137,204 thousand, from July 1 to September 30, 2021 and 2020 and from January 1 to September 30, 2021 and 2020. The amounts related to derecognized investments at the end of the period were NT$224 thousand, NT$0 thousand, NT$952 thousand, and NT$0 thousand, and the amounts related to the investment held on September 30, 2021 and 2020 were NT$129,788 thousand, NT$118,676 thousand, NT$140,174 thousand, and NT$137,204 thousand.

• 24 -

(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	September 30, 2021 $ 609,130 99,998 103,669 ( 609,130) 203,667 139,061 706,587 845,648 $ 1,049,315	December 31, 2020 $ 622,187 49,998 104,110 ( 622,187) 154,108 142,258 693,692 835,950 $ 990,058	September 30, 2020
	(	(	$ 668,996 150,025 104,261 ( 668,996) 254,286 145,354 698,458 843,812 $ 1,098,098

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:

September 30, 2021

September 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
	( (	$ 1,589,115 790) 1,588,325 70,120 1,658,445 609,130) $ 1,049,315

• 25 -

December 31, 2020

December 31, 2020
Total of Carrying Amount Allowance loss Amortized cost Adjustment to fair value Deductible of refundable deposits September 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
	$ 1,517,360 ( 884) 1,516,476 95,769 1,612,245 ( 622,187) $ 990,058 At fair value through other comprehensive income
	( (	$ 1,680,724 1,191) 1,679,533 87,561 1,767,094 668,996) $ 1,098,098

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

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

• 26 -

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

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

September 30, 2021

September 30, 2021
Credit Rating Normal Abnormal Default Write Off December 31, 2020 Credit Rating Normal Abnormal Default Write Off September 30, 2020 Credit Rating Normal Abnormal Default Write Off	Expected Credit Loss(ECL) 0.000%～0.4997% (Note) (Note) (Note) Expected Credit Loss(ECL) 0.002%～0.519% (Note) (Note) (Note) Expected Credit Loss(ECL) 0.002%～0.8996% (Note) (Note) (Note)	September 30, 2021 Total of Carrying Amount
		$ 1,589,115 - - - December 31, 2020 Total of Carrying Amount
		$ 1,517,360 - - - September 30, 2020 Total of Carrying Amount
		$ 1,680,724 - - -

• 27 -

(Note): The credit level of the bond investments as of September 30, 2021, and December 31 and September 30, 2020 were all normal and thus not applicable.

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

	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 79 - - Derecognition ( 83 ) - - Exchange rate and other movement ( 90) - - Balance at September 30, 2021 $ 790 $ - $ - Balance at January 1, 2020 $ 1,262 $ - $ - Purchase of New Liability Instruments 15 - - Derecognition ( 15 ) - - Exchange rate and other movement ( 71) - - Balance at September 30, 2020 $ 1,191 $ - $ - Investment under equity method September 30, 2021 December 31, 2020 September 30, 2020 Investments in associates $ 273,258 $ 242,485 $ 226,308 Summarization About Associates With Immateriality Information Percentage of the shareholdingand votingrights CompanyName September 30, 2021 December 31, 2020 September 30, 2020 Top Taiwan X Venture Capital Co., Ltd. 24.75% 24.75% 24.75%		Credit Rating
				Default (Lifetime expected credit loss exists and the credit is impaired)
				$ - - - - $ - $ - - - - $ - September 30, 2020
	CompanyName Top Taiwan X Venture Capital Co., Ltd.
		September 30, 2021 24.75%	December 31, 2020 24.75%	September 30, 2020
				24.75%

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Shares Vested in the Company Net profit for the period from continuing operations Other comprehensive income Total comprehensive income	From July 1 to September 30, 2021 ( $ 2,043 ) - ($ 2,043)	From July 1 to September 30, 2020	From July 1 to September 30, 2020	From January 1 to September 30,2021	From January 1 to September 30,2021	From January 1 to September 30,2020	From January 1 to September 30,2020
	( (		$ 5,179 - $ 5,179		$ 34,080 - $ 34,080		$ 9,419 - $ 9,419

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

Other financial assets-net
Time deposit with initial maturity date more than three months away Less: Deductible of the Refundable Deposits (Note 16)	September 30, 2021 $ 2,421,996 ( 23,145) $ 2,398,851	December 31, 2020 $ 2,987,652 ( 18,145) $ 2,969,507	September 30, 2020
	(	(	$ 3,120,252 ( 26,645) $ 3,093,607

XIII. Investment Properties

Investment Properties
Investment Properties Completed Right-of-use assets	September 30, 2021 $ 2,132,124 16,401 $ 2,148,525	December 31, 2020 $ 2,265,866 20,891 $ 2,286,757	September 30, 2020
				$ 2,269,201 22,387 $ 2,291,588

Cost Balance at January 1, 2020 Increase Disposition Transferred to property and equipment Transferred from property and equipment Balance at September 30, 2020		Land		House and building $ 509,617 342 54,289 ) 10,599 ) 10,599 $ 455,670		Right-of-use assets $ 32,861 - - - - $ 32,861		Total
	( (	$ 2,120,730 - 59,080 ) 28,735 ) 28,735 $ 2,061,650	( (				( (	$ 2,663,208 342 113,369 ) 39,334 ) 39,334 $ 2,550,181

(To be continued)

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(Continued)

Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation expense Disposition Transferred to property and equipment Transferred from property and equipment Balance at September 30, 2020 Net at September 30, 2020 Cost Balance at January 1, 2021 Increase Disposition Transferred to property and equipment Balance at September 30, 2021 Accumulated depreciation and impairment Balance at January 1, 2021 Depreciation expense Disposition Transferred to property and equipment Balance at September 30, 2021 Net at September 30, 2021		Land $ - - - - - $ - $ 2,061,650 $ 2,061,650 - 7,377 ) 73,560) $ 1,980,713 $ - - - - $ - $ 1,980,713		House and building $ 243,245 10,053 5,236 ) 6,886 ) 6,943 $ 248,119 $ 207,551 $ 455,752 1,165 11,523 ) 38,217) $ 407,177 $ 251,536 9,743 1,291 ) 4,222) $ 255,766 $ 151,411		Right-of-use assets $ 5,985 4,489 - - - $ 10,474 $ 22,387 $ 32,861 - - - $ 32,861 $ 11,970 4,490 - - $ 16,460 $ 16,401		Total
	( (		( ( ( ( ( (				( ( ( ( ( (	$ 249,230 14,542 5,236 ) 6,886 ) 6,943 $ 258,593 $ 2,291,588 $ 2,550,263 1,165 18,900 ) 111,777) $ 2,420,751 $ 263,506 14,233 1,291 ) 4,222) $ 272,226 $ 2,148,525

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

House and building Right-of-use assets

55-60 years 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

• 30 -

epidemic alert standard was adjusted as Level 3 as of the date following the degrading of the national epidemic alert standard. The effects of said amount resulting from the adjustment have been NT$5,251 thousand in total.

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

The fair value 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 company, 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 September 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.

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From January 1 to September 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.

From January 1 to September 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$79,909 thousand (after tax). Less the book value, NT$56,583 thousand, the gains from the disposal became NT$23,326 thousand, stated as the operating revenue-gain (loss) on investment properties.

From January 1 to September 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$60,430 thousand (after tax). Less the book value, NT$51,550 thousand, the gains from the disposal became NT$8,880 thousand, stated as the operating revenue-gain (loss) on investment properties.

All investment properties owned by the Company was in its own interests.

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

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

1st year 2nd year 3rd year 4th year 5th year More than 5 years	September 30, 2021 $ 119,078 91,311 72,758 44,605 24,114 85,982 $ 437,848	December 31, 2020 $ 109,829 87,388 56,701 42,640 10,460 2,659 $ 309,677	September 30, 2020	September 30, 2020
				$ 107,999 90,451 58,972 45,649 18,967 3,565 $ 325,603

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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 September 30, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation expense Disposition Transferred from investment properties Transferred to investment properties Balance at September 30, 2020 Net at September 30, 2020 Cost Balance at January 1, 2021 Increase Disposition Transferred from investment properties Balance at September 30, 2021 Accumulated depreciation and impairment Balance at January 1, 2021 Depreciation expense Disposition Transferred from investment properties Balance at September 30, 2021 Net at September 30, 2021		Own land	Buildings and ancillary equipment	Buildings and ancillary equipment	Computer equipment		Traffic and transport equipment	Other equipment	Leasehold improvement s	Leasehold improvement s	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 2,519 - 6,886 6,943) $ 96,518 $ 68,212 $ 166,942 - - 38,217 $ 205,159 $ 97,354 2,980 - 4,222 $ 104,556 $ 100,603	$ 30,688 3,614 ( 42 ) - - $ 34,260 $ 15,738 4,637 ( 42 ) - - $ 20,333 $ 13,927 $ 29,874 3,411 ( 1,494 ) - $ 31,791 $ 14,938 4,569 ( 1,494 ) - $ 18,013 $ 13,778	$ 8,949 114 - - - $ 9,063 $ 5,307 860 - - - $ 6,167 $ 2,896 $ 8,537 267 ( 3,400 ) - $ 5,404 $ 5,891 580 ( 3,400 ) - $ 3,071 $ 2,333		$ 10,839 701 ( 748 ) - - $ 10,792 $ 6,142 1,205 ( 748 ) - - $ 6,599 $ 4,193 $ 8,970 479 ( 1,251 ) - $ 8,198 $ 4,700 931 ( 1,251 ) - $ 4,380 $ 3,818		$ 10,889 929 - - - $ 11,818 $ 6,237 1,871 - - - $ 8,108 $ 3,710 $ 7,726 670 - - $ 8,396 $ 4,534 1,555 - - $ 6,089 $ 2,307	$ 487,869 5,358 ( 790 ) 39,334 ( 39,334) $ 492,437 $ 127,480 11,092 ( 790 ) 6,886 ( 6,943) $ 137,725 $ 354,712 $ 483,823 4,827 ( 6,145 ) 111,777 $ 594,282 $ 127,417 10,615 ( 6,145 ) 4,222 $ 136,109 $ 458,173

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

• 33 -

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

XV. Lease Agreement

(I) Right-of-use assets

Right-of-use assets
Cost Balance at January 1, 2020 Increase Decrease in the period Balance at September 30, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation expense Decrease in the period Balance at September 30, 2020 Net at September 30, 2020 Cost Balance at January 1, 2021 Increase Decrease in the period Balance at September 30, 2021 Accumulated depreciation and impairment Balance at January 1, 2021 Depreciation expense Decrease in the period Balance at September 30, 2021 Net at September 30, 2021		Building $ 50,762 25,445 12,218) $ 63,989 $ 20,550 16,683 12,011) $ 25,222 $ 38,767 $ 69,820 10,101 7,984) $ 71,937 $ 27,171 16,735 7,698) $ 36,208 $ 35,729		Transport equipment $ 8,074 1,983 3,005) $ 7,052 $ 4,154 1,859 2,791) $ 3,222 $ 3,830 $ 7,052 2,122 - $ 9,174 $ 3,950 2,418 - $ 6,368 $ 2,806		Total
	( ( ( (		( (		( ( ( (	$ 58,836 27,428 15,223) $ 71,041 $ 24,704 18,542 14,802) $ 28,444 $ 42,597 $ 76,872 12,223 7,984) $ 81,111 $ 31,121 19,153 7,698) $ 42,576 $ 38,535

• 34 -

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	September 30, 2021 December 31, 2020 September 30, 2020 $ 59,606 $ 71,498 $ 70,068 From July 1 to September 30, 2021 From July 1 to September 30, 2020 From January 1 to September 30, 2021 From January 1 to September 30, 2020 $ 384 $ 382 $ 1,228 $ 1,222	September 30, 2020
			$ 70,068 From January 1 to September 30, 2020
				$ 1,222

Discount rates for the lease liabilities are as the following:

Land Building Transport equipment	September 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%	September 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.

Considering that the COVID-19 epidemic has severely affected the market economy in 2021, the Company engaged in the negotiation with the Irrigation Agency, Council of Agriculture, Executive Yuan for the rent concession for lease of building. As a result, the Agency agreed to reduce the rent by 20% from May to December 2021. The effect of said rent concession recognized by the Company from January 1 to September 30, 2021 was NT$49 thousand (stated as non-operating revenue and expense).

(IV) Other information of Leases

Short-term lease expenses Low-valued asset lease expenses Total amount of cash (outflow) of lease	From July 1 to September 30, 2021 $ 81 $ 7	From July 1 to September 30, 2020 $ 9 $ 65	From January 1 to September 30, 2021 $ 87 $ 244 ($ 25,004)	From January 1 to September 30,2020	From January 1 to September 30,2020
			(	(	$ 73 $ 104 $ 24,774)

• 35 -

XVI. Refundable Deposit

Refundable Deposit
Refundable deposit Bond of Insurance Enterprises Bond of Litigation Others	September 30, 2021 $ 609,130 3,337 75,669 $ 688,136	December 31, 2020 $ 622,187 18,377 87,353 $ 727,917	September 30, 2020
			$ 668,996 9,337 85,847 $ 764,180

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

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

XVII.	Other financial assets - Time deposits Cash and cash equivalents Reserve for liabilities Net defined benefit liability	September 30, 2021 $ 23,145 55,861 $ 79,006 September 30, 2021 $ 79,401	December 31, 2020 $ 18,145 87,585 $ 105,730 December 31, 2020 $ 82,378	September 30, 2020	September 30, 2020
				$ 26,645 68,539 $ 95,184 September 30, 2020
					$ 83,721

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:

Operating Expenses	From July 1 to September 30, 2021 $ 476	From July 1 to September 30, 2020 $ 542	From January 1 to September 30, 2021 $ 1,428	From January 1 to September 30, 2020	From January 1 to September 30, 2020
					$ 1,626

• 36 -

XVIII. Reinsurance contract asset and Insurance liabilities

Less benefits & claims recovered from reinsurers Less: allowance loss Due from reinsurers and ceding companies Due from reinsurers and ceding companies - Non-accrual loan Less: allowance loss Reinsurance reserve asset - net Ceding unearned premium reserves Ceding claims reserves Less: Accumulated impairment Insurance liabilities Unearned premium reserves Claim reserves Special reserves Premium deficiency reserves	September 30, 2021 $ 9,566 ( 48) $ 9,518 $ 129,498 6,927 ( 9,881) $ 126,544 $ 855,253 1,083,958 ( 314) $ 1,938,897 $ 4,109,501 3,327,606 2,154,892 5,842 $ 9,597,841	December 31, 2020 $ 21,187 ( 106) $ 21,081 $ 174,240 11,734 ( 14,958) $ 171,016 $ 802,184 925,404 ( 314) $ 1,727,274 $ 3,447,801 2,894,345 2,118,699 7,588 $ 8,468,433	September 30, 2020
	( ( (	( ( (	$ 7,123 ( 35) $ 7,088 $ 265,272 7,882 ( 15,500) $ 257,654 $ 823,304 907,702 ( 314) $ 1,730,692 $ 3,388,041 2,839,451 2,121,882 7,271 $ 8,356,645

(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.

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

(II) Due from reinsurers and ceding companies

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

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

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

Balance at January 1, 2020 Add: Provision (reversal) in the period Balance at September 30, 2020 Balance at January 1, 2021 Add: Reversal in the current period Balance at September 30, 2021	Impairment loss by individual assessment $ 7,928 ( 641) $ 7,287 $ 11,211 ( 4,565) $ 6,646	Impairment loss by group assessment $ 3,968 4,280 $ 8,248 $ 3,853 ( 570) $ 3,283		Total
	( (	(	(	$ 11,896 3,639 $ 15,535 $ 15,064 5,135) $ 9,929

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 September 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$6,646 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.

• 38 -

As of September 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$7,287 thousand.

• (V) Reinsurance reserve asset and Insurance liabilities

Movement of increase/decrease for reinsurance reserve assets and insurance liabilities during January 1 to September 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 $ 724,843 - 724,843 720,668 363,290 - 1,083,958 $ 1,808,801 $ 3,699,229 2,241,946 1,085,660 3,327,606 - - 42,261 42,261 5,842 $ 7,074,938		Recovery of the Period $ 671,774 - 671,774 557,847 367,557 - 925,404 $ 1,597,178 $ 3,037,529 1,858,918 1,035,427 2,894,345 6,068 - - 6,068 7,588 $ 5,945,530		Others $ - - - - - - - $ - $ - - - - - - - - - $ -	September 30, 2021	September 30, 2021
	(								(	$ 855,253 - 855,253 720,668 363,290 314) 1,083,644 $ 1,938,897 $ 4,109,501 2,241,946 1,085,660 3,327,606 171,940 796,548 1,186,404 2,154,892 5,842 $ 9,597,841

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

• 39 -

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 $ 734,812 - 734,812 542,438 365,264 - 907,702 $ 1,642,514 $ 3,046,776 1,809,528 1,029,923 2,839,451 $ - - 2,378 2,378 7,271 $ 5,895,876		Recovery of the Period $ 663,018 - 663,018 667,090 369,723 - 1,036,813 $ 1,699,831 $ 2,874,620 1,848,738 1,039,374 2,888,112 $ 6,068 - 16,377 22,445 7,154 $ 5,792,331		Others $ - - - - - 3,973 3,973 $ 3,973 $ - - - - $ - - - - - $ -	September 30, 2020	September 30, 2020
	(								(	$ 823,304 - 823,304 542,438 365,264 314) 907,388 $ 1,730,692 $ 3,388,041 1,809,528 1,029,923 2,839,451 $ 180,031 796,548 1,145,303 2,121,882 7,271 $ 8,356,645

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 contingency reserves.

Considering that the COVID-19 epidemic, the direct insurance premium revenues from the “notifiable infectious disease epidemic prevention insurance” amounted to NT$1.93 billion and claims payable therefrom amounted to NT$1.51 billion from January 1 to September 30, 2021, and stated claim reserves therefrom amounted to NT$190 million until September 30, 2021. The claims payable from such product amounted to NT$150 million from October 1 to October 29, 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

• 40 -

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 September 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 the Period $ 108,746 ) 113,601) $ 4,855		Earnings Per Share(EPS) $ 0.30 ) 0.31) $ 0.01	Total Liabilities	Total Liabilities	(	Equity
	( (		( (			$ 11,143,478 9,944,686 $ 1,198,792		$ 9,503,565 10,561,959 $ 1,058,394)

Effects posed by the Company’s application of, or failure to apply, the enhancing disaster reserve mechanism, and reserves of enhancing residential earthquake and nuclear energy insurance during January 1 to September 30, 2020 are summarized as following:

Amount applied Amount not applied Effects		Net Profit for the Period $ 555,070 550,215 $ 4,855		Earnings Per Share(EPS) $ 1.53 1.52 $ 0.01	Total Liabilities	Total Liabilities	(	Equity
						$ 9,744,742 8,537,858 $ 1,206,884		$ 9,267,131 10,319,051 $ 1,051,920)

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	September 30, 2021 600,000 $ 6,000,000 362,200 $ 3,622,004	December 31, 2020 600,000 $ 6,000,000 362,200 $ 3,622,004	September 30, 2020
				600,000 $ 6,000,000 362,200 $ 3,622,004

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(II) Capital surplus

Capital surplus
May be used for making up losses, or be distributed cash or provided as the share capital Premium in stock issuance Treasury stock transaction	September 30, 2021 $ 1,915 97,047 $ 98,962	December 31, 2020 $ 1,915 97,047 $ 98,962	September 30, 2020
				$ 1,915 97,047 $ 98,962

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

(III) Retained earnings and dividend policy

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

• 42 -

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 September 30, 2021 and 2020, the net provision was NT$191,891 thousand and NT$131,975 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 approved by FSC before the shareholders’ meeting, the legal reserve and capital surplus may be distributed in cash based on Article 241 of the Company Act.

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

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

2. The ratio of 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.

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

4. 43 -

5. 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) .

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

7. Healthy financial business with solvency.

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

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

10. following:

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

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

• (IV) Special reserve

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

Balance at January 1, 2020 Provision of the period Recovery of the Period Balance at September 30, 2020 Balance at January 1, 2021 Provision of the period Recovery of the Period Balance at September 30, 2021	Special reserves $ 1,735,507 - ( 49,751) $ 1,685,756 $ 1,907,604 - ( 23,017) $ 1,884,587	Provisions by initial application of IFRSs $ 671,714 - ( 14,267) $ 657,447 $ 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 - 64,018) $ 2,351,533 $ 2,571,709 - 27,858) $ 2,543,851

• 44 -

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

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

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

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 September 30,2021 $ 108,744 ( 25,554 ) 455,847 ( 94) 430,199 ( 169,293) $ 369,650	From January 1 to September 30,2020
	( ( (	( ( ( ( ( (	$ 46,941 ) 26,902 40,443 ) 71) 13,612 ) 10,427) $ 70,980)

• 45 -

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 July 1 to September 30, 2021 $ 7,390 8,349 ( 21,074 ) ( 1,246) ($ 6,581)	From July 1 to September 30, 2020 $ 6,985 9,809 ( 5,321 ) 243 $ 11,716	From January 1 to September 30, 2021 $ 29,586 8,349 13,425 ( 2,691) $ 48,669	From January 1 to September 30, 2020	From January 1 to September 30, 2020
	( ( (	(	(	(	$ 31,297 10,255 9,027 ) 7,959 $ 40,484

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

income
Dividend Gain (loss) on disposal	From July 1 to September 30, 2021 $ 130,012 1,808 $ 131,820	From July 1 to September 30, 2020 $ 118,676 - $ 118,676	From January 1 to September 30, 2021 $ 141,126 1,808 $ 142,934	From January 1 to September 30, 2020
					$ 137,204 4,054 $ 141,258

(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 July 1 to September 30, 2021 $ 27,293 - ( 8,647) $ 18,646	From July 1 to September 30, 2020 $ 28,459 3,026 ( 8,733) $ 22,752	From January 1 to September 30, 2021 $ 83,773 3,688 ( 28,409) $ 59,052	From January 1 to September 30, 2020	From January 1 to September 30, 2020
	(	(	(	(	$ 83,132 32,206 25,634) $ 89,704

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

Bond instruments measured at fair value through other comprehensive income	From July 1 to September 30, 2021 ($ 31)	From July 1 to September 30, 2020 ($ 12)	From January 1 to September 30, 2021 $ 94	From January 1 to September 30, 2020	From January 1 to September 30, 2020
	(	(			$ 71

(V) Gain (loss) of Foreign Currency Exchange

Gain (loss) of investment exchange Other gain (loss) of exchange	From July 1 to September 30, 2021 ( $ 721 ) ( 1,292) ($ 2,013)	From July 1 to September 30, 2020 ( $ 7,723 ) ( 1,431) ($ 9,154)	From January 1 to September 30, 2021 ( $ 15,138 ) ( 7,698) ($ 22,836)	From January 1 to September 30, 2020	From January 1 to September 30, 2020
	( ( (	( ( (	( ( (	( ( (	$ 23,642 ) 7,095) $ 30,737)

• 46 -

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

	From January1 to September 30,2021	From January1 to September 30,2021	From January1 to September 30,2021	From January1 to September 30,2020	From January1 to September 30,2020	From January1 to September 30,2020
	Classified as operating cost	Classified as operating expense	Total	Classified as operating cost	Classified as operating expense	Total
Employee fringe benefit expenses	$ 229,209	$ 496,558	$ 725,767	$ 183,887	$ 582,509	$ 766,396
Salaries expense	229,209	390,795	620,004	183,887	476,880	660,767
Expenses for labor and health insurance	-	54,791	54,791	-	46,099	46,099
Pension expense	-	24,704	24,704	-	22,162	22,162
Remuneration to directors	-	19,719	19,719	-	31,232	31,232
Other employee fringe benefit expenses	-	6,549	6,549	-	6,136	6,136
Depreciation expense - Property and equipment	-	10,615	10,615	-	11,092	11,092
Depreciation expense - Investment properties	14,233	-	14,233	14,542	-	14,542
Depreciation expense - Right-of-use assets	-	19,153	19,153	-	18,542	18,542
Amortization expenses	-	3,831	3,831	-	2,349	2,349

	From July1 to September	From July1 to September	30,2021	From July1 to September 30,2020	From July1 to September 30,2020	From July1 to September 30,2020
	Classified as operating cost	Classified as operating expense	Total	Classified as operating cost	Classified as operating expense	Total
Employee fringe benefit expenses	$ 60,342	$ 172,247	$ 232,589	$ 60,052	$ 196,894	$ 256,946
Salaries expense	60,342	140,529	200,871	60,052	160,813	220,865
Expenses for labor and health insurance	-	17,521	17,521	-	13,933	13,933
Pension expense	-	8,535	8,535	-	7,324	7,324
Remuneration to directors	-	4,136	4,136	-	11,750	11,750
Other employee fringe benefit expenses	-	1,526	1,526	-	3,074	3,074
Depreciation expense - Property and equipment	-	3,471	3,471	-	3,611	3,611
Depreciation expense - Investment properties	4,709	-	4,709	4,926	-	4,926
Depreciation expense - Right-of-use assets	-	6,616	6,616	-	6,243	6,243
Amortization expenses	-	1,381	1,381	-	818	818

• 47 -

Note: As of September 30, 2021 and 2020, the number of employees is 915 and 895, respectively; among them, 11 directors and 9 directors do not serve as employees concurrently.

(VII) Compensation to Employees and Remuneration to Directors

Based on the Articles of Incorporation, the Company provided the employees’ compensation and directors’ remuneration at 1~5% and no more than 5% of the pre-tax profit before distributing the compensation to employees and remuneration to directors of the year. No independent directors were allowed to participate in the allocation of remuneration to directors. From January 1 to September 30, 2021 and 2020, the estimated compensations to employees and directors are as the following:

Percentage of estimation

Percentage of estimation	Percentage of estimation	Percentage of estimation
Employee compensation Directors’ remuneration From July 1 to September 30, 2021 Employee compensation $ - Directors’ remuneration $ -			From January 1 to September 30,2021 From January 1 to September 30,2020 - 2.50% - 2.50% From July 1 to September 30, 2020 From January 1 to September 30, 2021 From January 1 to September 30, 2020 $ 6,313 $ - $ 16,217 $ 6,313 $ - $ 16,217		From January 1 to September 30,2020
			- - From July 1 to September 30, 2020 $ 6,313 $ 6,313			2.50% 2.50% From January 1 to September 30, 2020
		$ - $ -					$ 16,217 $ 16,217

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

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.

• 48 -

XXI. Income Tax of the Units in Continued Business Operation

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

The income tax (expenses) benefits are primarily composed of the following

items:

items:
Income tax for the current Those yielded in the current period Adjustment of previous year(s) Additional business profit tax levied on unappropriated retained earnings Those yielded in the current period Deferred income tax Those yielded in the current period Income tax (expenses) benefits recognized in profit and/or loss		From July 1 to September 30, 2021 $ - - - - 44,624) $ 44,624)		From July 1 to September 30, 2020 $ 20,378 ) - 20,378) - 3,868 $ 16,510)	From January 1 to September 30, 2021 $ - ( 615) ( 615) ( 95) 50,425 $ 49,715	From January 1 to September 30, 2020
	( (		( ( (		( ( (	( ( (	$ 80,405 ) 6,511 73,894) - 12,623 $ 61,271)

(II) Current tax assets

Current tax assets
September 30, 2021 Current tax assets Prepaid income tax $ 6,321 ncome tax liabilities of the period September 30, 2021 Income tax liabilities of the period Income tax payable $ 95	December 31, 2020 $ - December 31, 2020 $ 38,823	September 30, 2020
		$ - September 30, 2020
			$ 15,484

(III) Income tax liabilities of the period

(IV) Information related to tax credit against loss

The information related to tax credit against loss available until September 30,

2021 is stated as following:

ed as following:
Balance not yet deducted $ 193,520	The last year for deduction 2031

• 49 -

(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

Earnings (loss) per share
Basic earnings (loss) per share Diluted earnings (loss) per share	From July 1 to September 30, 2021 $ 0.43 $ 0.43	From July 1 to September 30, 2020 $ 0.62 $ 0.62	From January 1 to September 30, 2021 ($ 0.30) ($ 0.30)	From January 1 to September 30, 2020
			( (		$ 1.53 $ 1.53

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

Net Profit for the Period (loss)

Net profit (loss) attributed to the owner of the Company/net profit (loss) for calculating the basic earnings (loss) per share Net profit (loss) attributed to the owner of the Company/net profit (loss) for calculating the diluted earnings (loss) per share	From July 1 to September 30, 2021 $ 155,993 $ 155,993	From July 1 to September 30, 2020 $ 223,397 $ 223,397	From January 1 to September 30, 2021 ($ 108,746) ($ 108,746)	From January 1 to September 30, 2020	From January 1 to September 30, 2020
			( (		$ 555,070 $ 555,070

Share(s)

Share(s)
The weighted average number of common shares to be used to calculate basic earnings per share (EPS) Potential impact of common stock with dilution: Employee compensation The weighted average number of common shares to be used to calculate diluted earnings per share (EPS)	From July 1 to September 30, 2021 362,200 - 362,200	From July 1 to September 30, 2020 362,200 823 363,023	Unit: thousand shares From January 1 to September 30, 2021 From January 1 to September 30, 2020 362,200 362,200 - 1,187 362,200 363,387
					362,200 1,187 363,387

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

• 50 -

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.

The Company generated net losses from January 1 to September 30, 2021. Considering that the potential common shares allocated as remuneration to employees would render the anti-diluting effect when the Company was calculating the loss per share, the calculation of the loss per share from January 1 to September 30, 2021 didn’t take the effect to the remuneration to employees into account.

XXIII. Financial Instruments

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

1. Level of fair value

September 30, 2021

September 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 - 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 $ 251,667 125,666 - - $ 377,333 $ 3,510,119 - $ - - - - - $ 3,510,119		Level 2 $ - - - - $ - $ - - $ 609,130 99,998 103,669 706,587 - $ 1,519,384		Level 3 $ - 118,306 1,203,650 520,648 $ 1,842,604 $ - 445,107 $ - - - - 139,061 $ 584,168		Total
								$ 251,667 243,972 1,203,650 520,648 $ 2,219,937 $ 3,510,119 445,107 $ 609,130 99,998 103,669 706,587 139,061 $ 5,613,671

• 51 -

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 September 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		Level 1 $ 204,920 156,780 - - $ 361,700 $ 3,310,661 - - - - - - $ 3,310,661 Level 1 $ 201,073 152,502 - 10,050 $ 363,625		Level 2 $ - - - - $ - $ - - 622,187 49,998 104,110 693,692 - $ 1,469,987 Level 2 $ - - - - $ -		Level 3 $ - - 1,054,592 522,397 $ 1,576,989 $ - 358,056 - - - - 142,258 $ 500,314 Level 3 $ - - 1,154,710 521,712 $ 1,676,422		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 Total
								$ 201,073 152,502 1,154,710 531,762 $ 2,040,047

(To be continued)

• 52 -

(Continued)

Financial assets at fair value through other comprehensive income Investments in equity instruments - TWSE/GTSM listed shares and emerging shares - Unlisted domestic shares Investments in liability instruments - Domestic government bonds - Domestic financial bonds - Domestic corporate bonds - Overseas corporate bonds - Overseas financial bonds Total		Level 1 $ 3,120,962 - - - - - - $ 3,120,962		Level 2 $ - - 668,996 150,025 104,261 698,458 - $ 1,621,740		Level 3 $ 32,980 369,443 - - - - 145,354 $ 547,777		Total
								$ 3,153,942 369,443 668,996 150,025 104,261 698,458 145,354 $ 5,290,479

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

1. Reconciliation for the financial instruments measured at fair value level 3

From January 1 to September 30, 2021

Financial assets	Financial assets at fair value throughprofit or loss	Financial assets at fair value throughprofit or loss	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Total $ 2,077,303 ( 4,385 ) ( 3,200 ) 126,170 ( 34,777 ) 320,000 ( 54,339) $ 2,426,772 ($ 7,585)
	Liability instruments	Beneficiary certificates of funds	Liability instruments	Equity instrument
Balance - beginning Recognized in Profit/Loss (gain/loss on financial assets and liabilities at fair value through profit or loss) Recognized into income －exchange profit and/or loss Recognized in other comprehensive income (unrealized profit/loss at fair value through other comprehensive income) Disposition Purchase Others Balance - ending Other unrealized gain/loss of the current	$ 1,576,989 ( 2,691 ) - - - 200,000 ( 50,000) $ 1,724,298 ($ 2,691)	$ - ( 1,694 ) - - - 120,000 - $ 118,306 ($ 1,694)	$ 142,258 - ( 3,200 ) 3 - - - $ 139,061 ($ 3,200)	$ 358,056 - - 126,167 ( 34,777 ) - ( 4,339) $ 445,107 $ -

• 53 -

From January 1 to September 30, 2020

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 Purchase Others Balance - ending Other unrealized gain/loss of the current	Financial assets at fair value through profit or loss Liability instruments $ 1,398,128 8,294 - - - 300,000 ( 30,000) $ 1,676,422 $ 8,294	Financial assets at fair value through other comprehensive income Liability instruments Equity instrument $ 150,000 $ 365,862 - - ( 4,651 ) - 5 40,083 - ( 9,815 ) - 29,280 - ( 22,987) $ 145,354 $ 402,423 ($ 4,651) $ -	Total
		Liability instruments $ 150,000 - ( 4,651 ) 5 - - - $ 145,354 ($ 4,651)
	(		$ 1,913,990 8,294 ( 4,651 ) 40,088 ( 9,815 ) 329,280 ( 52,987) $ 2,224,199 $ 3,643

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

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

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

Categories of financial instruments Evaluation skills and inputs TSEC/GTSM listed Based on cash flow discount approach, the present bond investments value of incomes to be obtained by holding the investment. The material unobservable input is the discount factor (yield), is obtained by considering the premium reward of risks and the reference interest rate of corporate bonds.

Investments in unlisted Based on the asset-based approach, reflect the entire domestic shares and value of the enterprise or business in terms of the beneficiary total market values for the individual assets and certificates of funds liabilities applicable to the evaluated subject. The material unobservable input is the liquidity discount, minority interest discount, and financial information of the investees.

• 54 -

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:

Item	Inputs value	Ranges	Upward or downward changes	Effect of changes in fair value	Effect of changes in fair value
				Positive change	Negative change
September 30, 2021 ASSETS Bond investment Stock investment Beneficiary certificates of funds December 31, 2020 ASSETS Bond investment Stock investment September 30, 2020 ASSETS Bond investment Stock investment	Discount rate Financial Information of the Investees Liquidity Discount Minority Interest Discount Financial Information of the Investees Discount rate Financial Information of the Investees Liquidity Discount Minority Interest Discount Discount rate Financial Information of the Investees Liquidity Discount Minority Interest Discount PBR Price-to-earnings ratio (P/E) Price-to-earnings ratio (P/E) before Interest, Taxes, Depreciation	1.26%~3.94% $17,272 10% 10% $118,306 1.31%~4.01% $17,770~$19,710 10% 10% 1.36%~4.06% $18,188~$33,035 10%~20% 10% 3.48 32.36 10.19	100 bp change upward 5% change downward 10% change upward 10% change upward 5% change downward 100 bp change upward 5% change downward 10% change upward 10% change upward 100 bp change upward 5% change downward 10% change upward 10% change upward 10% change downward 10% change downward 10% change downward	$ - - - - - - - - - - - - - - - -	( $ 412,041 ) ( 337 ) ( 49,425 ) ( 49,425 ) ( 274 ) ( 385,466 ) ( 1,426 ) ( 39,554 ) ( 39,554 ) ( 405,037 ) ( 2,164 ) ( 43,115 ) ( 38,977 ) ( 506 ) ( 1,670 ) ( 1,135 )

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.

• 55 -

Shall the financial instrument is affected by one or more inputs, the table

above only reflect the effect incurred from one single input change, without considering the relativeness and variability among inputs.

(II) Categories of financial instruments

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)	September 30, 2021 $ 2,219,937 8,394,625 3,955,226 1,049,315 1,099,186	December 31, 2020 $ 1,938,689 8,239,511 3,668,717 990,058 1,029,277	September 30, 2020
			$ 2,040,047 7,620,679 3,523,385 1,098,098 913,121

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.

• 56 -

1. Market risk

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

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

(1) Foreign exchange rate risk

For the currency assets and currency liabilities denominated in non-functional currency on the balance sheet date, please refer to Note 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 September 30, 2021 From January 1 to September 30, 2020 $ 8,283 $ 8,097	Effects from RMB
	From January 1 to September 30, 2021 $ 8,283	From January 1 to September 30, 2021 From January 1 to September 30, 2020
		$ 3,059 $ 2,401

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

• 57 -

(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	September 30, 2021 $ 3,382,742	December 31, 2020 $ 3,189,233	September 30, 2020
			$ 3,453,567

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 September, 2021 and 2020 will decrease NT$475,549 thousand and NT$468,076 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$4,956 thousand and NT$3,536 thousand due to the increase/decrease in the fair value of financial assets at fair value through profit or loss from January 1 to September 30, 2021 and 2020. The other comprehensive income would have increased/decreased by NT$39,552 thousand and NT$35,234 thousand due to the increase/decrease in the fair value of other financial assets at

• 58 -

fair value through comprehensive income from January 1 to September 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 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

September 30, 2021

September 30, 2021
Financial assets	Taiwan	Asia	America	Others	Total
Cash and cash equivalents	$ 4,464,232	$ -	$ -	$ -	$ 4,464,232
Financial assets at fair value through profit or loss	1,724,298	-	-	-	1,724,298
Financial assets at fair value through other comprehensive income	1,106,015	151,029	27,944	373,457	1,658,445
Total	$7,294,545	$151,029	$ 27,944	$373,457	$7,846,975
% byterritory	92.96%	1.92%	0.36%	4.76%	100%

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%

September 30, 2020

September 30, 2020
Financial assets	Taiwan	Asia	America	Others	Total
Cash and cash equivalents	$ 2,867,239	$ -	$ -	$ -	$ 2,867,239
Financial assets at fair value through profit or loss	1,686,472	-	-	-	1,686,472
Financial assets at fair value through other comprehensive income	1,259,839	252,305	-	254,950	1,767,094
Total	$5,813,550	$252,305	$ -	$254,950	$6,320,805
% byterritory	91.98%	3.99%	-	4.03%	100.00%

• 59 -

3. Liquidity risk

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

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

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

September 30, 2021

September 30, 2021	September 30, 2021
On demand or shorter than 3 months Liabilities without interest $ 844,938 Lease liabilities 5,413 $ 850,351 December 31, 2020 On demand or shorter than 3 months Liabilities without interest $ 763,639 Lease liabilities 5,526 $ 769,165 September 30, 2020 On demand or shorter than 3 months Liabilities without interest $ 541,941 Lease liabilities 5,227 $ 547,168			3 months – 1 year $ 21,513 23,599 $ 45,112 3 months – 1 year $ 15,134 23,984 $ 39,118 3 months – 1 year $ 127,798 23,733 $ 151,531		1-5years $ 22,664 31,497 $ 54,161 1-5years $ 17,006 44,303 $ 61,309 1-5years $ 24,804 42,877 $ 67,681		More than 5 years
							$ 6,323 - $ 6,323 More than 5 years
							$ 7,410 - $ 7,410 More than 5 years
Liabilities without interest Lease liabilities
							$ 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 September 30, 2021 are as follows:

• 60 -

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	Marine hull insurance, temporary ceding reinsurance for aviation insurance, and cargo reinsurance.
Asia Capital Reinsurance Group Pte Ltd Hong Kong Branch Office	Temporary ceding reinsurance for commercial fire insurance, commercial fire reinsurance and cargo reinsurance.

The unqualified premium expense is NT$ 0 thousand, the reserves for unqualified reinsurance is NT$826 thousand, all belongs to the ceding claims reported but not claimed reserves.

Based on Article 7 of the “Regulations Governing Insurance Enterprises Engaging in Operating Reinsurance and Other Risk Spreading Mechanisms”, the unqualified counterparties for the ceding reinsurance of the Company by September 30, 2020 are as follows:

30, 2020 are as follows:
Counterparties of Reinsurance	Insurance type
Lemma Insurance Company	Temporary ceding reinsurance for marine hull insurance
Tugu Insurance Company Limited	Temporary ceding reinsurance for commercial fire insurance, marine cargo insurance,and marine hull insurance.
Trust International Insurance & Reinsurance Company B.S.C.(c), Trust Re	Temporary ceding reinsurance for commercial fire insurance, and marine hull insurance.
Asia Capital Reinsurance Group Pte Ltd	Marine hull insurance, temporary ceding reinsurance for 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 ineligible premium expense was NT$8 thousand; the ineligible reinsurance

reserves was NT$1,035 thousand. The components include ceding unearned premium reserves for NT$4 thousand and the ceding claims reported but not claimed reserves for NT$1,031 thousand.

• 61 -

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) Taiwan Fire and Marine Foundation Related party in substance Other related parties Directors, supervisors, chairman, president, managers, their spouses, and the relatives within 2nd degree of kinship

(II) Significant related-party transactions were as follows

1. Deposit

Checking deposits and Demand deposits:

Major Management Bank of Taiwan Co., Ltd. Related party in substance Taiwan Business Bank Hua Nan Commercial Bank	September 30, 2021 $ 1,170,742 99,557 2,019 $ 1,272,318	December 31, 2020 $ 638,950 65,498 1,468 $ 705,916	September 30, 2020	September 30, 2020
				$ 575,169 62,955 640 $ 638,764

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

• 62 -

Major Management Bank of Taiwan Co., Ltd. Related party in substance Taiwan Business Bank	September 30, 2021 $ 246,665 131,961 $ 378,626	December 31, 2020 $ 241,665 137,017 $ 378,682	September 30, 2020
			$ 250,085 140,017 $ 390,102

The time deposits in the related parties have the interest rate of 0.06%~2.55% as of September 30, 2021; as of December 31 and September 30, 2020, the interest rates were 0.06%~2.25%, with same transaction terms as non-related parties.

1. Premium income (direct policy writing)

Major Management Bank of Taiwan Co., Ltd. Related party in substance Goldsun Building Materials Co., Ltd. Sirtec International Co., Ltd. Taiwan Business Bank Other related parties	From July 1 to September 30, 2021 $ 873 607 102 23 966 $ 2,571	From July 1 to September 30, 2020 $ 925 184 93 24 744 $ 1,970	From January 1 to September 30, 2021 $ 2,200 12,168 1,334 2,915 4,092 $ 22,709	From January 1 to September 30, 2020	From January 1 to September 30, 2020
					$ 5,828 10,463 1,366 85 31,392 $ 49,134

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

3. Claims (direct policy writing)

Major Management Bank of Taiwan Co., Ltd. Related party in substance Goldsun Building Materials Co., Ltd. Other related parties	From July 1 to September 30, 2021 $ - - 77 $ 77	From July 1 to September 30, 2020 $ 74 - 1,968 $ 2,042	From January 1 to September 30, 2021 $ 23 363 6,067 $ 6,453	From January 1 to September 30, 2020	From January 1 to September 30, 2020
					$ 1,127 71 3,543 $ 4,741

• 63 -

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 July 1 to September 30, 2021 $ - 7,910 2,898 3,999 $ 14,807	From July 1 to September 30, 2020 $ 609 7,193 2,606 - $ 10,408	From January 1 to September 30, 2021 $ 1,805 22,791 19,818 44,296 $ 88,710	From January 1 to September 30, 2020	From January 1 to September 30, 2020
					$ 2,668 21,576 7,982 - $ 32,226

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

1. Lessor Agreement

Operating lease

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

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

Type/Name of the Related Parties Major Management Yong-Shin Development Co., Ltd. Investor with significant effects Navigator Real Estate Co., Ltd. Tong-Sheng Development Co., Ltd. Navigator Investment Co., Ltd.	September 30, 2021 $ 140 336 210 140	December 31, 2020 $ 220 528 330 220	September 30, 2020
			$ 250 600 375 250

(To be continued)

• 64 -

(Continued)

Type/Name of the Related Parties 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)	September 30, 2021 826 490 10,065 4,733 $ 16,940	December 31, 2020 1,298 770 15,035 11,193 $ 29,594	September 30, 2020	September 30, 2020
				1,475 875 4,462 13,393 $ 21,680

(1) The details of the rents received by leasing the investment properties to the related parties are as follows:

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 July 1 to September 30, 2021 $ 28 69 42 28 169 100 1,649 1,957 $ 4,042	From July 1 to September 30, 2020 $ 28 68 43 28 168 100 1,650 2,099 $ 4,184	From January 1 to September 30,2021		From January 1 to September 30,2020 $ 76 183 115 76 450 267 4,745 6,163 $ 12,075
				$ 76 183 114 76 450 267 4,742 5,685 $ 11,593		$ 76 183 115 76 450 267 4,745 6,163 $ 12,075

• 65 -

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

are as follows:
Major Management Yong-Shin Development Co., Ltd. Investor with significant effects Navigator Real Estate Co., Ltd. Tong-Sheng Development Co., Ltd. Navigator Investment Co., Ltd. Related party in substance Forland Auto Trade Holding Co., Ltd. Taipei Branch (Cayman) Taiwan Navigator Assets Sirtec International Co., Ltd. Taiming Assurance Broker Co., Ltd. (TABC)	September 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	September 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.

1. 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.	September 30, 2021 $ 1,279 $ 1,343	December 31, 2020 $ 2,960 $ 3,112	September 30, 2020
				$ 3,520 $ 3,693

• 66 -

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 July 1 to September 30, 2021 $ 8 $ 602	From July 1 to September 30, 2020	From July 1 to September 30, 2020	From January 1 to September 30,2021 $ 37 $ 1,806	From January 1 to September 30,2020	From January 1 to September 30,2020
			$ 24 $ 602			$ 83 $ 1,806

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

7. Donated

. Donated
Related party in substance Taiwan Fire and Marine Foundation	From July 1 to September 30, 2021 $ -	From July 1 to September 30, 2020 $ 8,000	From January 1 to September 30, 2021 $ -	From January 1 to September 30, 2020
					$ 8,000

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

• 67 -

(III) Incentive remuneration to key management level

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

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

Short-term employee benefits Post-employment benefits	From July 1 to September 30, 2021 $ 17,710 579 $ 18,289	From July 1 to September 30, 2020 $ 17,303 570 $ 17,873	From January 1 to September 30, 2021 $ 69,359 1,760 $ 71,119	From January 1 to September 30, 2020	From January 1 to September 30, 2020
					$ 69,684 1,723 $ 71,407

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.

XXV. Others

(I) Gross retained earned premium

1. As of September 30, 2021, the balance of the gross retained earned premium for the compulsory and non-compulsory insurance, and the calculation are as follows:

follows:	follows:	follows:	follows:	follows:	follows:	follows:	follows:
Insurance type Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－ (3) Compulsory insurance $ 586,987 $ 193,331 $ 274,597 $ 505,721 Non-Compulsory insurance 6,357,746 137,657 1,342,048 5,153,355 $ 6,944,733 $ 330,988 $ 1,616,645 $ 5,659,076 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net change in unearned premium reserves (9)=(5)－(6) +(7)－(8) Item Reserve (5) Recovery (6) Reserve (7) Recovery (8) Compulsory insurance $ 350,350 $ 348,534 $ 148,017 $ 146,159 $ 3,674 Non-Compulsory insurance 3,104,861 2,451,933 96,001 90,903 658,026 $ 3,455,211 $ 2,800,467 $ 244,018 $ 237,062 $ 661,700								Premium retained (4)＝(1)＋(2)－ (3)
Compulsory insurance Non-Compulsory insurance Item Compulsory insurance Non-Compulsory insurance									$ 505,721 5,153,355 $ 5,659,076 Net change in unearned premium reserves (9)=(5)－(6) +(7)－(8) $ 3,674 658,026 $ 661,700
		Reserve (5) $ 350,350 3,104,861 $ 3,455,211			Reserve (7) $ 148,017 96,001 $ 244,018		Recovery (8)
							$ 146,159 90,903 $ 237,062			$ 3,674 658,026 $ 661,700

• 68 -

Item Compulsory insurance Non-Compulsory insurance		Unearned premium reserves for cedingreinsurance inward Reserve (10) Recovery (11) $ 210,213 $ 209,123 514,630 462,651 $ 724,843 $ 671,774	Unearned premium reserves for cedingreinsurance inward Reserve (10) Recovery (11) $ 210,213 $ 209,123 514,630 462,651 $ 724,843 $ 671,774	Ceding net change in unearned premium reserves (12)=(10)－(11) $ 1,090 51,979 $ 53,069	Gross retained earned premium (13)= (4)－(9)+(12)	Gross retained earned premium (13)= (4)－(9)+(12)
		Reserve (10) $ 210,213 514,630 $ 724,843
						$ 503,137 4,547,308 $ 5,050,445

1. As of September 30, 2020, the balance of the gross retained earned premium for the compulsory and non-compulsory insurance, and the calculation are as follows:

follows:	follows:	follows:	follows:	follows:
Insurance type Premium revenues (1) Reinsurance premium revenues (2) Reinsurance premium outward (3) Premium retained (4)＝(1)＋(2)－ (3) Compulsory insurance $ 584,467 $ 188,321 $ 272,246 $ 500,542 Non-Compulsory insurance 4,259,822 133,036 1,302,185 3,090,673 $ 4,844,289 $ 321,357 $ 1,574,431 $ 3,591,215 Unearned premium reserves for direct insurance Unearned premium reserves for reinsurance inwards Net change in unearned premium reserves (9)=(5)－(6) +(7)－(8) Item Reserve (5) Recovery (6) Reserve (7) Recovery (8) Compulsory insurance $ 350,132 $ 338,780 $ 145,233 $ 144,516 $ 12,069 Non-Compulsory insurance 2,459,038 2,307,010 92,373 84,314 160,087 $ 2,809,170 $ 2,645,790 $ 237,606 $ 228,830 $ 172,156 Unearned premium reserves for cedingreinsurance inward Ceding net change in unearned premium reserves (12)=(10)－(11) Gross retained earned premium (13)= (4)－(9)+(12) Item Reserve (10) Recovery (11) Compulsory insurance $ 210,081 $ 203,272 $ 6,809 $ 495,282 Non-Compulsory insurance 524,731 459,746 64,985 2,995,571 $ 734,812 $ 663,018 $ 71,794 $ 3,490,853					Premium retained (4)＝(1)＋(2)－ (3)
Compulsory insurance Non-Compulsory insurance Item Compulsory insurance Non-Compulsory insurance Item
			Reserve (10) $ 210,081 524,731 $ 734,812
Compulsory insurance Non-Compulsory insurance						$ 495,282 2,995,571 $ 3,490,853

• 69 -

(II) Retained claims

1. As of September 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) $ 396,440 3,167,736 $ 3,564,176		Claims for reinsurance (2) $ 197,588 25,887 $ 223,475		Refundable Claims for Reinsurance (3) $ 234,829 217,390 $ 452,219	Retained claims (4)＝(1)＋(2)－ (3)	Retained claims (4)＝(1)＋(2)－ (3)
							$ 359,199 2,976,233 $ 3,335,432

1. As of September 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) $ 416,479 1,713,287 $ 2,129,766		Claims for reinsurance (2) $ 204,685 28,052 $ 232,737		Refundable Claims for Reinsurance (3) $ 244,667 362,258 $ 606,925	Retained claims (4)＝(1)＋(2)－ (3)	Retained claims (4)＝(1)＋(2)－ (3)
							$ 376,497 1,379,081 $ 1,755,578

• (III) Unearned premium reserves

• The balances of the retained unearned premium reserves for each insurance type as of September 30, 2021 are summarized as the followings:

Item General Personal Automobile Liability Insurance Miscellaneous 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 $ 2,265 31,727 6,036 20,908 - 794,317 855,253 - $ 855,253		Retained business
	Direct business $ 836,188 601,435 521,249 238,606 191,150 1,456,430 3,845,058 - $ 3,845,058		Reinsurance inward business
			$ 16 55 - 1,649 - 262,723 264,443 - $ 264,443				$ 833,939 569,763 515,213 219,347 191,150 924,836 3,254,248 - $ 3,254,248

• 70 -

• 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 September 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 $ 1,597 6,911 20,400 - 101,676 692,720 823,304 - $ 823,304		Retained business
	Direct business $ 789,068 490,097 240,757 184,562 169,460 1,260,491 3,134,435 - $ 3,134,435		Reinsurance inward business
			$ 96 - 1,693 - 66,782 185,035 253,606 - $ 253,606				$ 787,567 483,186 222,050 184,562 134,566 752,806 2,564,737 - $ 2,564,737

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

(IV) Claim reserves

1. As of September 30, 2021, the balance of the reported but not paid and unreported claim reserves, and the calculation are as follows:

2. (1) Claim reserves and ceding claims reserves

Item Reported but not yet paid Not yet reported Less: Accumulated impairment	Claim r	eserves Reinsurance inward business (2) $ 348,180 163,572 - $ 511,752		Ceding claims reserves Ceding reinsurance business (3) $ 720,668 363,290 314) $ 1,083,644	Retained business (4)=(1)+(2)-(3)	Retained business (4)=(1)+(2)-(3)
	Direct Insurance (1) $ 1,893,766 922,088 - $ 2,815,854
			(			$ 1,521,278 722,370 314 $ 2,243,962

• 71 -

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

• reserves

reserves
Item Reported but not yet paid Not yet reported		Direct Insurance Reserve (1) Recovery (2) $ 1,893,766 $ 1,539,543 922,088 869,734 $ 2,815,854 $ 2,409,277			Reinsurance inward business Reserve (3) Recovery (4) $ 348,180 $ 319,375 163,572 165,693 $ 511,752 $ 485,068		Net change in claims reserves (5)= (1)-(2)+(3)-(4)
		Reserve (1) $ 1,893,766 922,088 $ 2,815,854			Reserve (3) $ 348,180 163,572 $ 511,752
								$ 383,028 50,233 $ 433,261

Item Reported but not yet paid Not yet reported		Cedingreinsurance business Reserve (6) Recovery (7) $ 720,668 $ 557,847 363,290 367,557 $ 1,083,958 $ 925,404	Cedingreinsurance business Reserve (6) Recovery (7) $ 720,668 $ 557,847 363,290 367,557 $ 1,083,958 $ 925,404	Ceding net change in claims reserves (8)=(6)-(7)	Ceding net change in claims reserves (8)=(6)-(7)
		Reserve (6) $ 720,668 363,290 $ 1,083,958
				(	$ 162,821 4,267) $ 158,554

1. As of September 30, 2020, the balance of the reported but not paid and unreported claim reserves, and the calculation are as follows:

2. (1) Claim reserves and ceding claims reserves

Item Reported but not yet paid Not yet reported Less: Accumulated impairment	Claim r	Claim r	eserves Reinsurance inward business (2) $ 330,276 165,586 - $ 495,862		Ceding claims reserves Ceding reinsurance business (3) $ 542,438 365,264 314) $ 907,388	Retained business (4)=(1)+(2)-(3)	Retained business (4)=(1)+(2)-(3)
	Direct Insurance (1)
		$ 1,479,252 864,337 - $ 2,343,589		(			$ 1,267,090 664,659 314 $ 1,932,063

• (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		$ 1,479,252		$ 1,561,264	$	330,276 $		287,474	( $ 39,210 )
paid
Not yet	reported	864,337		873,230		165,586		166,144	( 9,451)
		$ 2,343,589		$ 2,434,494	$	495,862 $		453,618	($ 48,661)
				Cedingreinsurance			business		Ceding net
								change in claims
				Reserve			Recovery		reserves
	Item			(6)			(7)		(8)=(6)-(7)
Reported but not yet paid			$	542,438		$	667,090	(	$ 124,652 )
Not yet reported				365,264			369,723	(	4,459)
			$	907,702		$	1,036,813	(	$ 129,111)

• 72 -

(V) Premium deficiency reserves

1. As of September 30, 2021, the balance of the premium deficiency reserves of each insurance type, and the calculation are as follows:

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

Item Aviation Insurance Fishing Vessel Insurance	Premium deficiencyreserves Direct business Reinsurance inward business $ 3,022 $ 48 2,650 122 $ 5,672 $ 170	Premium deficiencyreserves Direct business Reinsurance inward business $ 3,022 $ 48 2,650 122 $ 5,672 $ 170		Ceding premium deficiency reserves Ceding reinsurance business $ - - $ -		Retained business
	Direct business $ 3,022 2,650 $ 5,672
						$ 3,070 2,772 $ 5,842

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

Item Aviation Insurance Fishing Vessel Insurance Miscellaneous Insurance Item Aviation Insurance Fishing Vessel Insurance Miscellaneous Insurance		Net change in premium deficiency reserves for direct business and reinsurance inward (5)=(1)-(2) +(3)-(4) Direct Insurance Reinsurance inward business Reserve (1) Recovery (2) Reserve (3) Recovery (4) $ 3,022 $ 2,431 $ 48 $ 146 $ 493 2,650 2,762 122 226 ( 216 ) - 1,999 - 24 ( 2,023) $ 5,672 $ 7,192 $ 170 $ 396 ($ 1,746) 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) Cedingreinsurance business Reserve (6) Recovery (7) $ - $ - $ - $ 493 - - - ( 216 ) - - - ( 2,023) $ - $ - $ - ($ 1,746)	Net change in premium deficiency reserves for direct business and reinsurance inward (5)=(1)-(2) +(3)-(4) Direct Insurance Reinsurance inward business Reserve (1) Recovery (2) Reserve (3) Recovery (4) $ 3,022 $ 2,431 $ 48 $ 146 $ 493 2,650 2,762 122 226 ( 216 ) - 1,999 - 24 ( 2,023) $ 5,672 $ 7,192 $ 170 $ 396 ($ 1,746) 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) Cedingreinsurance business Reserve (6) Recovery (7) $ - $ - $ - $ 493 - - - ( 216 ) - - - ( 2,023) $ - $ - $ - ($ 1,746)	Net change in premium deficiency reserves for direct business and reinsurance inward (5)=(1)-(2) +(3)-(4) Direct Insurance Reinsurance inward business Reserve (1) Recovery (2) Reserve (3) Recovery (4) $ 3,022 $ 2,431 $ 48 $ 146 $ 493 2,650 2,762 122 226 ( 216 ) - 1,999 - 24 ( 2,023) $ 5,672 $ 7,192 $ 170 $ 396 ($ 1,746) 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) Cedingreinsurance business Reserve (6) Recovery (7) $ - $ - $ - $ 493 - - - ( 216 ) - - - ( 2,023) $ - $ - $ - ($ 1,746)	Net change in premium deficiency reserves for direct business and reinsurance inward (5)=(1)-(2) +(3)-(4) Direct Insurance Reinsurance inward business Reserve (1) Recovery (2) Reserve (3) Recovery (4) $ 3,022 $ 2,431 $ 48 $ 146 $ 493 2,650 2,762 122 226 ( 216 ) - 1,999 - 24 ( 2,023) $ 5,672 $ 7,192 $ 170 $ 396 ($ 1,746) 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) Cedingreinsurance business Reserve (6) Recovery (7) $ - $ - $ - $ 493 - - - ( 216 ) - - - ( 2,023) $ - $ - $ - ($ 1,746)	Net change in premium deficiency reserves for direct business and reinsurance inward (5)=(1)-(2) +(3)-(4)
		Reserve (6) $ - - - $ -
				( ( (	$ 493 216 ) 2,023) $ 1,746)

• 73 -

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

1. As of September 30, 2020, the balance of the premium deficiency reserves of each insurance type, and the calculation are as follows:

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

Item Aviation Insurance Fishing Vessel Insurance Marine Hull Insurance Marine Cargo Insurance Miscellaneous Insurance	Premium deficiencyreserves Direct business Reinsurance inward business $ 2,528 $ 142 2,406 164 1,064 54 521 7 380 5 $ 6,899 $ 372	Premium deficiencyreserves Direct business Reinsurance inward business $ 2,528 $ 142 2,406 164 1,064 54 521 7 380 5 $ 6,899 $ 372		Ceding premium deficiency reserves Ceding reinsurance business $ - - - - - $ -		Retained business
	Direct business $ 2,528 2,406 1,064 521 380 $ 6,899
						$ 2,670 2,570 1,118 528 385 $ 7,271

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

Item Aviation Insurance Fishing Vessel Insurance Marine Hull Insurance Marine Cargo Insurance Miscellaneous Insurance		Direct Insurance Reserve (1) Recovery (2) $ 2,528 $ 2,881 2,406 2,946 1,064 783 521 139 380 - $ 6,899 $ 6,749	Direct Insurance Reserve (1) Recovery (2) $ 2,528 $ 2,881 2,406 2,946 1,064 783 521 139 380 - $ 6,899 $ 6,749		Reinsurance inward business Reserve (3) Recovery (4) $ 142 $ 103 164 234 54 66 7 2 5 - $ 372 $ 405	Reinsurance inward business Reserve (3) Recovery (4) $ 142 $ 103 164 234 54 66 7 2 5 - $ 372 $ 405	Net change in premium deficiency reserves for direct business and reinsurance inward (5)=(1)-(2) +(3)-(4)
		Reserve (1) $ 2,528 2,406 1,064 521 380 $ 6,899			Reserve (3) $ 142 164 54 7 5 $ 372
							($ 314) ( 610) 269 387 385 $ 117

• 74 -

Item Aviation Insurance Fishing Vessel Insurance Marine Hull Insurance Marine Cargo Insurance Miscellaneous Insurance		Cedingreinsurance business Reserve (6) Recovery (7) $ - $ - - - - - - - - - $ - $ -	Cedingreinsurance business Reserve (6) Recovery (7) $ - $ - - - - - - - - - $ - $ -		Ceding net change in premium deficiency reserves (8)=(6)-(7) $ - - - - - $ -	Loss recognized under the net provision of premium deficiency reserves for the period (9)=(5)-(8)	Loss recognized under the net provision of premium deficiency reserves for the period (9)=(5)-(8)
		Reserve (6) $ - - - - - $ -
						( (	$ 314 ) 610 ) 269 387 385 $ 117

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

(VI) Special reserves

1. As of September 30, 2021, the special reserves for the compulsory and non-compulsory insurance increase/decrease as the following:

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

Item Balance - beginning Provision of the Period Recovery of the Period Balance - ending		Amount
		$ 913,838 42,261 - $ 956,099

• (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 - ( 6,068) $ 171,940		$ 796,548 - - $ 796,548		$ 230,305 - - $ 230,305		$ 1,204,861 - ( 6,068) $ 1,198,793		$ 450,903 - - $ 450,903		$ 990,404 - ( 23,017) $ 967,387		$ 466,297 - - $ 466,297		$ 1,907,604 - ( 23,017) $ 1,884,587

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.

• 75 -

• As of September 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 Amount Balance - beginning $ 928,997 Provision of the Period 2,378 Recovery of the Period ( 16,377 ) Balance - ending $ 914,998

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

Item				Liabili	ties						Special	re	serve
		Material accidents $ 186,099 - ( 6,068) $ 180,031		Hazard changes $ 796,548 - - $ 796,548	Others		Total		Material accidents		Hazard changes		Others		Total
Balance - beginning Provision of the Period Recovery of the Period Balance - ending					$ 230,305 - - $ 230,305		$ 1,212,952 - ( 6,068) $ 1,206,884		$ 396,144 - - $ 396,144		$ 926,829 - ( 49,751) $ 877,078		$ 412,534 - - $ 412,534		$ 1,735,507 - ( 49,751) $ 1,685,756

Note: The recovery of the special reserves under the previous liability refers to the special reserves provided for non-compulsory automobile liability insurance before January 1, 2011.

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

• Detailed balance sheet of compulsory automobile liability insurance

Item		Amount		Item		Amount
ASSETS	September 30, 2021	December 31, 2020	September 30, 2020	Liabilities	September 30, 2021	December 31, 2020	September 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	$ 1,584,206 - 11,424 14,651 28,046 41,319 - - 210,213 280,956 2,216 -	$ 1,547,851 - 12,219 26,709 22,400 41,501 - - 209,123 291,759 43 -	$ 1,525,964 - 10,973 13,769 28,388 39,345 - - 210,081 272,232 86 -	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	$ - 4,045 - 34,591 498,367 677,136 956,099 - 2,793	$ - - - 42,559 494,693 698,726 913,838 - 1,789	$ - 862 - 14,874 495,365 673,505 914,998 - 1,234
Total assets	$2,173,031	$2,151,605	$2,100,838	Total liabilities	$2,173,031	$2,151,605	$2,100,838

• 76 -

2. Detailed income/cost statement of compulsory automobile liability insurance

Item	From January 1 to September 30,2021	From January 1 to September 30,2020
Operating Revenues Premium Income (including reinsurance revenue NT$193,331 thousand and NT$188,321 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$197,588 thousand and NT$204,685 thousand, respectively) Less: Claim recovered from reinsurer Retained claims Net change in claims reserves Net change in special reserves (Note) Total operatingcosts	$ 650,987 ( 274,597) ( 2,584) 373,806 5,175 $ 378,981 $ 594,028 ( 234,829) 359,199 ( 10,787) 42,261 $ 390,673	$ 642,062 ( 272,246) ( 5,260) 364,556 5,909 $ 370,465 $ 621,164 ( 244,667) 376,497 7,967 ( 13,999) $ 370,465

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

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

(VIII) Acquisition Cost of Insurance Contracts

1. As of September 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 Personal Accident Insurance Other Insurance (Note)		Commission expenditure $ 459,611 147,402 101,288 64,472 235,655 $ 1,008,428		Fee expenditure $ - - - - 79,919 $ 79,919		Reinsurance commission expenditure $ 8 4 - - 8,873 $ 8,885		Other cost $ - 3,175 590 72 7,390 $ 11,227		Total
										$ 459,619 150,581 101,878 64,544 331,837 $ 1,108,459

• 77 -

• 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.

1. As of September 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 Personal Accident Insurance Compulsory Automobile Liability Insurance One-year Residential General Fire Insurance One-year Commercial General Fire Insurance Other Insurance (Note)		Commission expenditure		Fee expenditure $ - - - 51,947 - - 32,868 $ 84,815		Reinsurance commission expenditure $ 20 - - - - 2,140 8,401 $ 10,561		Other cost $ 3,110 560 73 - 7,140 - 4 $ 10,887		Total
		$ 140,412 95,081 66,977 - 42,904 38,859 144,499 $ 528,732								$ 143,542 95,641 67,050 51,947 50,044 40,999 185,772 $ 634,995

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

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

• (IX) Analysis for business profit and loss

• The amount of the profits and losses at each insurance category and the calculations during January 1 to September 30, 2021 are as follows:

• (1) Direct Insurance

Direct Insurance
Item		Premium revenues (1) $ 451,873 1,189,281 735,443 248,256 385,971 119,487 313,136 184,891 202,481 3,113,914 $ 6,944,733		Net change in unearned premium reserves (2) $ - 18,121 11,272 ) 296 ) 39,129 1,530 1,504 ) 17,215 554 591,267 $ 654,744		Acquisition Cost of Insurance Contracts (3) $ 26,500 150,577 101,878 51,229 39,099 9,312 64,544 26,191 28,108 602,136 $ 1,099,574	Claims (including the claim expenses) (4) $ - 660,348 428,748 27,083 32,982 365 148,471 53,652 95,965 2,116,562 $ 3,564,176	c	Net change in laims reserves (5) $ - 34,787 12,425 ) 11,838 ) 161,106 444 ) 5,211 ) 3,889 ) 2,800 ) 247,291 $ 406,577	Profit (loss) of Insurance (6)=(1)-(2)-(3)- (4)-(5)
Residential Earthquake Insurance General Personal Automobile Liability Insurance General Personal Automobile Physical Damage Insurance One-year Residential General Fire Insurance One-year Commercial General Fire Insurance Commercial earthquake insurance Personal Accident Insurance General Liability Insurance Compulsory Motorcycle Liability Insurance Other Insurance (Note)			( ( (					( ( ( ( ( (		(	$ 425,373 325,448 228,514 182,078 113,655 108,724 106,836 91,722 80,654 443,342) $ 1,219,662

• 78 -

(2) Reinsurance assumed

Insurance type Residential Earthquake Insurance Commercial earthquake insurance Compulsory Automobile Liability Insurance Typhoon and Flood Insurance Nuclear Energy Insurance Engineering Insurance Other Insurance (Note)		Reinsurance premium revenues (1) $ 59,210 11,633 104,153 6,160 3,992 19,261 126,579 $ 330,988		Net change in unearned premium reserves (2) $ 7,043 951 1,275 1,158 ) 1,161 ) 552 ) 558 $ 6,956		Reinsurance commission expenditure (3) $ - 940 - 319 - 5,587 2,039 $ 8,885		Claims for reinsurance (4) $ - 4 83,430 44 2 8,828 131,167 $ 223,475	c	Net change in laims reserves (5) $ - 11 ) 12,216 134 239 775 13,331 $ 26,684	Profit (loss) of reinsurance inward (6)=(1)-(2)-(3)- (4)-(5)	Profit (loss) of reinsurance inward (6)=(1)-(2)-(3)- (4)-(5)
			( ( (						(		(	$ 52,167 9,749 7,232 6,821 4,912 4,623 20,516) $ 64,988

(3) Ceding reinsurance business

Insurance type Residential Earthquake Insurance Commercial earthquake insurance General Liability Insurance Compulsory Motorcycle Liability Insurance Other Insurance (Note)		Reinsurance premium outward (1) $ 451,873 84,789 95,047 95,936 889,000 $ 1,616,645		Ceding net change in unearned premium reserves (2) $ - 2,978 5,558 334 44,199 $ 53,069	i	Reinsurance commission ncome and fee income (3) $ 45,879 6,591 27,021 - 143,202 $ 222,693		Refundable Claims for Reinsurance (4) $ - 112 26,097 55,509 370,501 $ 452,219	c	Ceding net change in laims reserves (5) $ - 566 8,615 ) 1,802 ) 168,405 $ 158,554	Loss (profit) of Ceding reinsurance (6)=(1)-(2)-(3)- (4)-(5)	Loss (profit) of Ceding reinsurance (6)=(1)-(2)-(3)- (4)-(5)
									( (			$ 405,994 74,542 44,986 41,895 162,693 $ 730,110

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

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

2. (1) Direct Insurance

Direct Insurance
Item Residential Earthquake Insurance General Personal Automobile Liability Insurance One-year Commercial General Fire Insurance General Personal Automobile Physical Damage Insurance One-year Residential General Fire Insurance General Liability Insurance Personal Accident Insurance Commercial earthquake insurance Other Insurance (Note)		Premium revenues (1) $ 446,916 1,135,767 352,884 694,317 242,925 156,144 315,877 121,059 1,378,400 $ 4,844,289		Net change in unearned premium reserves (2) $ - 44,627 18,359 340 ) 6,482 756 ) 785 ) 130 95,663 $ 163,380		Acquisition Cost of Insurance Contracts (3) $ 25,995 143,522 38,859 95,641 50,044 21,050 67,050 9,589 172,684 $ 624,434	Claims (including the claim expenses) (4) $ 1,700 635,257 138,108 411,633 19,310 40,175 133,500 1,813 748,270 $ 2,129,766	c	Net change in laims reserves (5) $ - 48,073 17,524 ) 16,168 5,330 35,676 ) 14,682 ) 880 ) 91,714) $ 90,905)	Profit (loss) of Insurance (6)=(1)-(2)-(3)- (4)-(5)
			( ( (					( ( ( ( ( (			$ 419,221 264,288 175,082 171,215 161,759 131,351 130,794 110,407 453,497 $ 2,017,614

• 79 -

(2) Reinsurance assumed

Insurance type Residential Earthquake Insurance Compulsory Automobile Liability Insurance Marine Hull Insurance Commercial earthquake insurance Typhoon and Flood Insurance Nuclear Energy Insurance General Liability Insurance Compulsory Commercial Automobile Liability Insurance Personal Accident Insurance Foreign Inward Reinsurance - Aviation insurance Other Insurance (Note)		Reinsurance premium revenues (1) $ 52,138 101,604 1,569 11,215 6,538 4,027 1,062 18,152 2,706 469 121,877 $ 321,357		Net change in unearned premium reserves (2) $ 4,819 393 164 ) 2,812 146 ) 1,512 ) 5,050 ) 137 ) 132 246 7,383 $ 8,776		Reinsurance commission expenditure (3) $ - - 2 1,053 578 - 16 - - - 8,912 $ 10,561		Claims for reinsurance (4) $ 276 80,046 6,403 897 530 8 3,191 15,615 471 525 ) 125,825 $ 232,737	c	Net change in laims reserves (5) $ 366 ) 5,994 18,577 ) 746 ) 1,415 ) 74 ) 253 ) 73 ) - 917 ) 58,671 $ 42,244	Profit (loss) of reinsurance inward (6)=(1)-(2)-(3)- (4)-(5)	Profit (loss) of reinsurance inward (6)=(1)-(2)-(3)- (4)-(5)
			( ( ( ( (				(		( ( ( ( ( ( ( (		(	$ 47,409 15,171 13,905 7,199 6,991 5,605 3,158 2,747 2,103 1,665 78,914) $ 27,039

(3) Ceding reinsurance business

Insurance type Residential Earthquake Insurance One-year Commercial General Fire Insurance Commercial earthquake insurance General Liability Insurance Marine Hull Insurance Typhoon and Flood Insurance Compulsory Motorcycle Liability Insurance Other Insurance (Note)		Reinsurance premium outward (1) $ 446,916 228,391 81,115 72,923 35,273 51,463 95,099 563,251 $ 1,574,431		Ceding net change in unearned premium reserves (2) $ - 1,885 2,315 ) 9,797 ) 3,336 1,300 2,403 74,982 $ 71,794	i	Reinsurance commission ncome and fee income (3) $ 45,164 64,996 6,314 18,259 2,624 5,083 - 64,275 $ 206,715		Refundable Claims for Reinsurance (4) $ - 118,667 3,396 21,943 9,919 1,410 47,296 404,294 $ 606,925	c	Ceding net change in laims reserves (5) $ - 34,497 ) 3,084 ) 20,713 ) 42,239 ) 4,042 ) 798 ) 23,738) $ 129,111)	Loss (profit) of Ceding reinsurance (6)=(1)-(2)-(3)- (4)-(5)	Loss (profit) of Ceding reinsurance (6)=(1)-(2)-(3)- (4)-(5)
			( (						( ( ( ( ( ( ( (			$ 401,752 77,340 76,804 63,231 61,633 47,712 46,198 43,438 $ 818,108

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

collectively.

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

right for pursuit of recovery
Credit Insurance Miscellaneous Insurance Bonding Insurance Personal Comprehensive Insurance General Liability Insurance Engineering Insurance	September 30, 2021		December 31, 2020 $ 31,580 610 2,148 48 11 1 $ 34,398	September 30, 2020
		$ 24,605 587 1,933 48 65 1 $ 27,239			$ 33,398 2,010 2,148 48 11 1 $ 37,616

• 80 -

(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:

1. Government bond. Exchangeable government bonds are excluded.

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

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

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

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

• 81 -

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

• 82 -

XXVI. Claim Liabilities to Policyholders

• (I) As of September 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

Item General Personal Automobile Liability Insurance Compulsory Automobile Liability Insurance One-year Commercial Fire Insurance Marine Cargo Insurance Miscellaneous Insurance General Personal Automobile Physical Damage Insurance Compulsory Motorcycle Liability Insurance Other Insurance (Note)	Claimspayable Reported andpaid $ 562 2,044 - - 151 505 2,000 71 $ 5,333		Claim reserves
		Reported but not yetpaid $ 566,278 92,794 339,403 173,293 141,713 140,481 37,555 750,429 $ 2,241,946	Notyet reported $ 128,758 329,093 22,432 56,283 74,912 46,566 135,764 291,852 $ 1,085,660		Total
					$ 695,036 421,887 361,835 229,576 216,625 187,047 173,319 1,042,281 $ 3,327,606

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

Insurance type Compulsory Automobile Liability Insurance Compulsory Motorcycle Liability Insurance Fishing Vessel Insurance General Liability Insurance Engineering Insurance Marine Cargo Insurance Aviation Insurance Personal Accident Insurance Commercial Comprehensive Insurance Compulsory Commercial Automobile Liability Insurance Other Insurance (Note) Allowance loss		Claimpaid $ 17,762 7,363 5,205 4,854 4,400 2,244 1,251 978 574 494 38,051) 7,074 35) $ 7,039	Reported and paid $ 1,227 1,200 - 5 - - - 60 - - - 2,492 ( 13) $ 2,479		Total
	( (		(	( (	$ 18,989 8,563 5,205 4,859 4,400 2,244 1,251 1,038 574 494 38,051) 9,566 48) $ 9,518

• 83 -

• 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 $ 208,107 151,588 32,948 66,145 77,541 8,229 176,110 $ 720,668		Not yet reported $ 11,800 44,400 147,940 16,100 2,200 55,506 85,344 $ 363,290		Total
					(	$ 219,907 195,988 180,888 82,245 79,741 63,735 261,454 1,083,958 314) $ 1,083,644

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

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

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

Item General Personal Automobile Liability Insurance Compulsory Automobile Liability Insurance General Personal Automobile Physical Damage Insurance Compulsory Motorcycle Liability Insurance Marine Cargo Insurance One-year Commercial Fire Insurance Other Insurance (Note)	Claimspayable Reported and paid $ - - - - - - - $ -		Claim reserves
		Reported but not yetpaid $ 530,387 76,774 157,333 58,008 129,741 153,074 753,601 $ 1,858,918	Notyet 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

• 84 -

• 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

1. 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.

• 85 -

• (III) As of September 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

the policyholders
Claimspayable Claim reserves Item Reported and paid Reported but not yetpaid Notyet reported General Personal Automobile Liability Insurance $ 1,998 $ 490,628 $ 128,263 Compulsory Automobile Liability Insurance 406 74,598 337,891 One-year Commercial Fire Insurance - 196,959 15,959 General Personal Automobile Physical Damage Insurance 481 159,816 41,475 Compulsory Motorcycle Liability Insurance 415 51,722 132,126 Marine Cargo Insurance - 115,405 50,744 Other Insurance (Note) 362 720,400 323,465 $ 3,662 $ 1,809,528 $ 1,029,923 . Reinsurance reserve assets - Claim recoverable from reinsurers and paid claims to the policyholders Insurance type Claimpaid Reported and paid Compulsory Automobile Liability Insurance $ 19,882 $ 244 Marine Cargo Insurance 6,253 - Compulsory Commercial Automobile Liability Insurance 4,446 25 Engineering Insurance 4,119 - General Liability Insurance 3,908 - Compulsory Motorcycle Liability Insurance 3,543 248 Personal Accident Insurance 3,473 - Fishing Vessel Insurance 820 - Other Insurance (Note) ( 39,838) - 6,606 517 Allowance loss ( 32) ( 3) $ 6,574 $ 514		Claim reserves
						Total
				$ 618,891 412,489 212,918 201,291 183,848 166,149 1,043,865 $ 2,839,451 to the reported Total
				( (	$ 20,126 6,253 4,471 4,119 3,908 3,791 3,473 820 39,838) 7,123 35) $ 7,088

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

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3. 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 Other Insurance (Note) Accumulated impairment	Reported but notyetpaid $ 26,120 97,043 121,413 67,972 6,399 49,024 174,467 $ 542,438		Not yet reported $ 152,412 40,100 6,300 24,300 53,087 4,800 84,265 $ 365,264		Total
				(	$ 178,532 137,143 127,713 92,272 59,486 53,824 258,732 907,702 314) $ 907,388

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:

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• From January 1 to September 30, 2021

Insurance type One-year Commercial General Fire Insurance Cargo Insurance Aviation Insurance Engineering Insurance	Estimated amount $ 185,905 97,617 30,190 20,000 $ 333,712	Amount after changes
		$ 186,219 97,617 30,190 20,000

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

1. From January 1 to September 30, 2020

Insurance type One-year Commercial General Fire Insurance Cargo Insurance Aviation Insurance	Estimated amount $ 150,968 69,138 30,190 $ 250,296	Amount after changes
		$ 92,065 69,138 30,190

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

(II) The Company evaluates the premium deficiency reserve based on the expected cost method, while considering the individual cases not satisfying Article 10 of the “Regulations Governing Insurance Enterprises Engaging in Operating Reinsurance and Other Risk Spreading Mechanisms” However, the estimation and assumption are uncertain, and may not be consistent to the actual loss rate and actual general fee rate in the future. The said estimation may, due to the changes of future economic situations, cause the provision of premium deficiency reserve to increase or decrease. When the expected loss rate increases of decrease 5%, the amount of the provision of premium deficiency reserve for the period of January 1 to September 30, 2021 and 2020 may increase NT$172 thousand or NT$1,024 thousand, or decrease NT$172 thousand or NT$985 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.

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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 <==

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

Risk management strategies of the Company:

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

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

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

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

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

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Risk management procedure of the Company:

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

1. The functions of each unit are as follows:

2. (1) Board of Directors

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

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

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

3. (2) Risk Management Committee

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

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

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

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

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

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5. (3) Risk Management Dept.

6. A. Charge of the executions of daily risk monitor, measurement, and evaluation, and independent from the business to perform the duties.

7. 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.

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

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

10. 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.

11. 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.

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

14. 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.

15. 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.

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

17. (5) Audit Dept.

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

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

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

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

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

When the sales of each insurance of the Company solicit business, the “Regulations Governing Business Solicitation” of the Company shall be followed. The insurance approver of each insurance shall be strictly required for their qualification, authorities and duties based on the “Regulations Governing Insurance

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Approval and Claims”, and they shall follow the established operational process of insurance approval for the insurance type when approving insurance, to ensure the proper risk categorization and premium levels, as well as to control the insurance risks.

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

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

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

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

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September 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

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

Unit: NT$ Thousand Highest retention NT$ 1,500,000 NT$ 480,000 US$ 5,000 US$ 1,000 US$ 25,000 US$ 3,000 US$ 1,200 US$ 3,000 NT$ 1,500,000 NT$ 300,000 NT$ 300,000 NT$ 300,000 NT$ 300,000 NT$ 1,200,000 NT$ 1,200,000 NT$ 40,000 NT$ 40,000 NT$ 10,000 NT$ 30,000 NT$ 120,000

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

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September 30, 2020

Unit: NT$ Thousand

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

Note: the special businesses are not subjected to the above restrictions for the

maximum self-retained amount.

• (VI) Approaches of Managing Assets and Liabilities

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

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

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

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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 September 30, 2021 From January 1 to September 30, 2020	The impact to the profit/loss when the expected loss ratio increase 5% Before holding the reinsurance After holding the reinsurance ($ 69,855) ($ 51,555) ($ 67,880) ($ 52,080)	The impact to the profit/loss when the expected loss ratio increase 5% Before holding the reinsurance After holding the reinsurance ($ 69,855) ($ 51,555) ($ 67,880) ($ 52,080)	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 ($ 69,855) ($ 67,880)		Before holding the reinsurance $ 63,005 $ 64,215	After holding the reinsurance
	( (	( (			$ 46,305 $ 48,615

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

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(X) Development Trend of Claims

1. The development trend of claims during January 1 to September 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 3,350,738	24 $ 2,087,243 2,298,119 2,204,071 2,458,292	36 $ 2,073,409 2,263,292 2,206,224	48 $ 2,070,556 2,266,001	60
					$ 2,073,849

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

• The development trend of claims during January 1 to September 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 1,670,119	24 $ 2,499,139 2,087,243 2,298,082 2,214,727	36 $ 2,452,145 2,073,409 2,269,854	48 $ 2,417,893 2,071,407	60
					$ 2,404,342

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	September 30,	September 30,	2021	Dec	ember 31,	2020	September 30,	September 30,	2020
	Foreign Currency	Exchan ge rate	Carrying Amount	Foreign Currency	Exchan ge rate 28.48 4.31 28.48	Carrying Amount	Foreign Currency	Exchan ge rate	Carrying Amount
	$ 30,795 70,985 1,043	27.84 4.31 27.84	$ 857,324 305,947 29,050	$ 30,521 55,942 241		$ 869,245 241,109 6,862	$ 28,070 56,228 244	29.10 4.27 29.10	$ 816,825 240,093 7,105
Monetary items USD RMB Foreign liabilities
Monetary items USD

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

follows:
Foreign Currency USD RMB	From January 1 to September 30, 2021 Exchange rate Foreign exchange income or loss,net 27.84 ($ 14,111 ) 4.31 ( 480) ($ 14,591)	From January 1 to September 30, 2020
	Exchange rate 27.84 4.31	Exchange rate 29.10 4.27	Foreign exchange income or loss,net
			($ 22,012) ( 43) ($ 22,055)

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

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Company is considered as a single operating segment, and the financial information of operating segments need not to be disclosed.

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

Unit: NT$ Thousand

										Unit: NT$	Thousand
Name of Investor	Name of Investee	Location	Main Activities	Original investment amount		Holdings at end of		period	Net income (losses) of the investee in period	Investment income (loss) recognized in period	Remarks
				End of the period	End of previous period	Shares (thousand shares)	%	Carrying Amount
Taiwan Fire & Marine Insurance Co., Ltd.	Top Taiwan X Venture Capital Co., Ltd.	Taipei City	INVESTMENTS	$ 198,000	$ 198,000	19,800	24.75	$ 273,258	$ 137,697	$ 34,080

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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.

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