These Regulations are adopted pursuant to Paragraph 3, Article 148-1 of the Insurance Act (the “Act”).
These Regulations shall also apply to insurance enterprises established pursuant to other laws, unless it is otherwise provided by such other laws or approved by the competent authority.

Except as otherwise approved by the Financial Supervisory Commission (the “FSC”), an insurance enterprise shall use calendar year as its fiscal year and establish its accounting system based on the nature of its accounting matters, actual business status, and development and management needs.
The accounting system referred to in the preceding paragraph shall, based on the nature of the insurance enterprise’s business operations, and in a way that accommodates the needs of preparation of consolidated financial reports and ensures consistency in the accounting policies of the insurance enterprise and its subsidiaries, contain the following items:
1. A general description;
2. A chart of journals and ledgers;
3. Financial statements;
4. Accounting items, account books, and accounting documents;
5. Accounting standards and procedures adopted; and
6. Other items prescribed by the FSC.
An insurance enterprise shall see to it that its subsidiaries establish their accounting systems in accordance with the preceding paragraph.

The financial reports of an insurance enterprise shall be prepared in accordance with these Regulations and other applicable laws and regulations. Matters not provided for therein shall be governed by the generally accepted accounting principles (GAAP).
The GAAP described in the preceding paragraph shall mean the following, as endorsed by the FSC: International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), and Interpretations developed by the International Financial Reporting Interpretations Committee (IFRIC) or the former Standing Interpretations Committee (SIC).

"Financial report" means financial statements, statements of major accounting items, and other disclosures and explanations helpful to the decision making of the primary users.
A complete set of financial statements shall comprise balance sheet, statement of comprehensive income, statement of changes in equity, statement of cash flows, and accompanying notes or supplementary schedules thereto.
An insurance enterprise, unless newly established, or under any of the circumstances set out in Paragraph 4 hereof, or otherwise required by the FSC, shall prepare the major financial statements and accompanying notes described in the preceding paragraph by presenting comparative information for two consecutive periods. The major financial statements shall also be signed or sealed on each page by the insurance enterprise’s chairperson, managerial officer, and chief accounting officer.
When an insurance enterprise applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial reports, or when it reclassifies items in its financial reports, it shall do so in accordance with the applicable provisions of IAS 1.
For the purposes of these Regulations, information is material if omitting, misstating or obscuring the information in the financial reports could reasonably be expected to influence decisions that the primary users of general purpose financial reports make on the basis of information in those financial reports. Judgments of materiality depend on qualitative factors and quantitative factors. Whether information is quantitatively material is assessed by considering not only the size of the impact recognized in the financial report, but also any unrecognized items that could ultimately affect primary users' overall perception of the insurance enterprise financial position, financial performance and cash flows (e.g., contingent liabilities or contingent assets). When assessing qualitative factors, consideration shall be given to both insurance enterprise-specific and external qualitative factors, including involvement of a related party, uncommon transactions or features of a transaction, unexpected variation or changes in trends, the insurance enterprise geographical location, its industry sector, or the state of the economy or economies in which it operates.

A financial report shall present fairly the financial position, financial performance, and cash flows of an insurance enterprise without being misleading to an interested party in making judgments and decisions.
If a financial report violates these Regulations or any other applicable requirements, for which the FSC as a result of an audit gives a notice requiring adjustment to be made, an insurance enterprise shall make the required adjustment and correction. If the adjusted amount reaches the threshold set by the FSC, a corrected financial report shall be publicly disclosed, together with a description of the reasons, items, and amount specified in the FSC notice for adjustment.

An insurance enterprise shall comply with the following provisions when making accounting change:
1. Change in accounting policy:
(1)"Accounting policies" refer to specific principles, bases, conventions, rules and practices adopted by an insurance enterprise in preparing and presenting financial statements.
(2)When an insurance enterprise changes an accounting policy voluntarily in a new fiscal year in order to produce financial reports that provide reliable and more relevant information about the effects of transactions or other events or conditions on the insurance enterprise’s financial position, financial performance, or cash flows, it shall request its certified public accountant (CPA) to provide an item-by-item analysis and review opinion on the reasonableness of the nature of the change in accounting policy, the reasons why applying the new accounting policy provides reliable and more relevant information, each line item affected and the estimated effect for the fiscal year preceding the earliest fiscal year affected by retrospective application of the new accounting policy, and the actual effect on the opening balance of retained earnings for the immediately preceding fiscal year. These shall be submitted as a proposal for adoption by resolution of the board of directors (council), after which they shall be submitted to the FSC for approval. Upon approval by the FSC, the insurance enterprise shall publicly announce the estimated effects arising from the application of the new accounting policy and the CPA review opinion.
(3)If, for the voluntary change in accounting policy in the new fiscal year, it is impracticable to determine either the period-specific effects or the cumulative effect of the change, as described in paragraph 23 of IAS 8, the insurance enterprise shall calculate the effects in accordance with paragraph 24 of IAS 8 and the preceding item, and shall request a CPA to provide an item-by-item analysis and review opinion on the reasonableness of the reasons why retrospective application is impracticable and how and from when the change in accounting policy has been applied, and also provide an opinion on the impact on the audit opinion for the fiscal year preceding the change in accounting policy. The insurance enterprise shall then follow the procedure described above.
(4)Unless it is impracticable to determine the effects as described in the preceding item, an insurance enterprise shall, within 2 months after the beginning of the fiscal year in which the new accounting policy is adopted, calculate the line items affected and the actual effect for the fiscal year preceding the earliest fiscal year affected by retrospective application of the new accounting policy and the actual effect on the opening balance of retained earnings for the immediately preceding fiscal year, and shall submit the calculations for adoption by the board of directors (council), after which they shall be publicly announced and filed and submitted to the FSC for recordation. If the difference between the actual effect of the change in accounting policy and the original estimated effect in public announcement and filing is NT$10 million or more, and exceeds 1% of the insurance revenue for the immediately preceding fiscal year or 5% of the paid-in capital, the insurance enterprise shall analyze the reasons for the difference and request a CPA to provide an opinion on its reasonableness. The analysis and the CPA's opinion shall also be publicly announced and filed with the FSC.
(5)Except when an insurance enterprise applies a new accounting policy to newly purchased assets, in which case the provisions of the preceding items need not apply, if a change in accounting policy is adopted without having been duly filed for approval, the financial reports for the fiscal year in which the new accounting policy was applied shall be restated, and the new accounting policy may only be applied starting from the next fiscal year after a supplementary filing has been made and approved.
(6)When an insurance enterprise voluntarily changes its accounting policy after the start date of a fiscal year in accordance with the provisions of the preceding paragraph, it shall publicly announce and file the change period that the new accounting policy applies retroactively, line items affected and the actual effect for the immediately preceding fiscal year, and the actual effect on the opening balance of retained earnings for the immediately preceding fiscal year, and add an explanation to the reasonableness and necessity of changing the accounting policy or accounting estimates after the start date of a fiscal year. The insurance enterprise shall also request a CPA to provide an item-by-item analysis and review opinion on the reasonableness of changes and other items. These shall be submitted as a proposal for adoption by resolution of the board of directors (council) and then handled the same according to the procedure set out in Item (2) of the Subparagraph 1. If the effect of an insurance enterprise’s retrospective application of a new accounting policy on the financial statements for any quarter of the current fiscal year reaches the threshold for restatement of financial reports set out in Paragraph 2, Article 5 of these Regulations, the insurance enterprise shall restate the financial report for the relevant period and request the attesting CPAs to re-audit or review the financial statements and then public announce and file the report again.
2.Changes in accounting estimates:
(1)"Accounting estimates" means amounts in financial statements that are subject to measurement uncertainty and are estimated by an insurance enterprise using measurement techniques and inputs.
(2)If a change in an accounting estimate arises from a change in the useful life or the depreciation or depletion method of depreciable or depletable assets, a change in the amortization period or amortization method of intangible assets, a change in the residual value of any such assets, or a change in a technique used to estimate the fair value thereof, the insurance enterprise shall request the attesting CPAs to provide an analysis and review opinion on the reasonableness of the nature of changes and the reasons why the changes can provide reliable and more relevant information. Those changes in accounting estimates shall then be submitted as a proposal for adoption by resolution of the board of directors (council), publicly disclosed and filed after approval by the FSC, and then handled the same according to the procedure set out in Item (5) of the preceding subparagraph. If the insurance enterprise makes a change in an accounting estimate during a fiscal year, the insurance enterprise shall do the same as described in Item (6) of the preceding subparagraph, and in addition, provide explanations on the reasonableness and necessity of the time of the change.
The expression "publicly announce and file" as used in this article means entering the information into the website designated by the FSC for the submission of electronic filings.
Where an insurance enterprise has established the position of independent director, when it submits proposals for adoption by resolution of the board of directors (council) pursuant to Paragraph 1 hereof, it shall take into full consideration each independent director's opinion; where an independent director has an objection or reservation, the objection or reservation shall be recorded in the minutes of the meeting of the board of directors.

An insurance enterprise shall prepare consolidated financial reports in accordance with Chapter II herein and IFRS 10, prepare annual parent company only financial reports in accordance with Chapter III and Chapter V herein, and prepare semi-annual parent company only financial reports in accordance with Chapter V herein.
An insurance enterprise that does not have a subsidiary shall prepare individual financial reports in accordance with Chapter II herein, and when preparing annual individual financial reports, shall prepare a section on “Additional Disclosures” in accordance with Chapter III herein and a section on “statements of major accounting items” in accordance with Article 29 herein.
An insurance enterprise preparing interim financial reports shall follow the provisions of Chapters II and IV herein as well as IAS 34 and IFRS17.

The terms "parent", "subsidiary", "associate " and "joint arrangement" as used in these Regulations shall be determined in accordance with IFRS 10, IFRS 11, and IAS 28.
The meaning of "control," "significant influence," or "joint control" as used in these Regulations shall be determined in accordance with IFRS 10, IFRS 11, and IAS 28.