Taiwan Insurers Explore Easing Rules to Reduce FX Hedging Costs

Taiwan’s insurance companies are exploring the possibility of easing accounting rules to reduce their surging foreign-exchange hedging costs.

Taiwan’s life insurance association has requested its member companies to establish a task force and work with their accounting firms to come up with a mechanism to minimize the impact of Taiwan dollar appreciation on the industry, according to a letter seen by Bloomberg News. The letter didn’t mention what the potential changes to accounting rules might be.

The move comes as hedging costs for Taiwan’s insurers have soared over the past few years and are weighing on the industry’s profitability.