Mercuries Life Insurance Co., Ltd. Corporate governance

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DECENT WORKAND ECONOMIC GROWTH

2022 Goals and Achievements

- Total assets of NT$ 1,458.233 billion, net loss after tax of NT$ 13.659 billion, and total premium income of NT$ 114.93 billion.
- Rated top 6%~20% in Corporate Governance Evaluation by Taiwan Stock Exchange
- Held the entity shareholders' meeting, supplemented with TOCC auxiliary platform, to strengthen communication with stakeholders.
- Set up the home office environment for employees and strengthened the home office asset security control; passed system-wide ISO27001: 2013Information Security Management System(ISMS) verification; passed the verification of the British Standards Institute BSI 10012:2017 Personal Information Management System (PIMS); qualified rate of all the internal staff in the information security advocacy course reached 100%;participated in the F-SOC to enhance the quality of financial security monitoring through sharing and communication among financial institutions
- Conducted dishonest conduct risk assessment project, analyzed and evaluated business activities with high risk of dishonest conduct in the business area, and analyzed and reviewed accordingly.
- Optimized the law change management system to strengthen the law change management and effectively improve the law compliance culture.
- Optimized the money laundering and terrorism risk assessment mechanism and anti-money laundering system functions.

2023 Goals

- Complete and expand BS 10012:2017 Personal Information Management System (PIMS) verification to the whole company.
- Continuously carry out ISO27001:2013 Information Security Management System (ISMS) verification, to maintain certificate validity.
- Handle the maturity assessment of capital security management, establish a self-assessment mechanism, and continue to deepen and implement capital security management.
- Introduce ISO22301 Operation Continuity Management System to strengthen the resilience of financial services.
- Conduct compliance risk assessment (CRA), including compliance risk assessment report and risk improvement plan, propose the weaknesses of compliance risk management and supervise the improvement plan and schedule for the whole company operation situation.
- Improve the integrity and correctness of the stakeholder management system database, and implement the stakeholder transaction control mechanism.
- Conduct quality assurance (QA) for compliance, assist and supervise business units to identify and manage compliance risks.
- Expand the effectiveness of anti-money laundering system and enhance the awareness of employees.

Since the establishment, Mercuries Life Insurance continues to maintain the interests of shareholders and enhance the functions of Board of Directors with dedication, and also honestly discloses material operation information to the public. In order to enhance the professionalism and independence of the Board of Directors, the external performance evaluation of board of directors was carried out.

In addition, the "Corporate Governance and Nomination Committee" was set up to enhance the functions of the Board of Directors, and the selection mechanism of directors and senior executives was established by the committee to construct professional and diversified directors and to promote the ethical management of the Company. Mercuries Life Insurance has actively promoted the corporate governance, and also have received the honor of being rated top 6%~20% in the seventh term Corporate Governance Evaluation by Taiwan Stock Exchange for seven consecutive years.

This Company values the interests and rights of every shareholder and treats all shareholders equally. Through the interactions from orientation meeting and shareholders' meeting, the shareholders' meeting, by means of electronic voting, makes the exercise of the shareholders' rights and interests free from the limitation of time and space, and further protect the shareholders' rights and interests. In 2022, the shareholders’ meeting was often held with the help of video form, and in response to the epidemic, the shareholders can report online, vote, ask questions, and watch the live broadcast of the meeting; Investor and shareholder contact information is also provided on the company website to ensure that investors are fully informed of important company information.

Corporate Governance Structure

According to the Mercuries Life Insurance Board Performance Evaluation Method, the Corporate Governance and Nominating Committee shall conduct an annual internal performance evaluation of the Board and functional committees and an external performance evaluation every three years. Taiwan Corporate Governance Association will be appointed in 2023 to evaluate the performance of the board of directors from December 1, 2021 to November 30, 2022.

Board performance evaluation focuses on ESG issues such as "corporate governance", to promote the formulation of corporate governance measures, support the Company to participate in stock exchange’s corporate governance evaluation, and fully protect the shareholders' rights and interests. In addition, the Board of Directors also actively promotes the fair customer treatment culture, provides the quality customer service, establishes the performance goals in business plans, supervises the implementation of the management team, and continuously strengthens the operational efficiency of the Board of Directors based on the results of the performance evaluation of the Board of Directors, improves the corporate governance culture, and actively promotes the vision of sustainable development.

The performance evaluation results of the Board of Directors of the Company shall be used as a reference for the selection or nomination of directors; the performance evaluation results of individual directors shall be used as the reference basis for determining their individual salaries and remuneration. The remuneration committee may make recommendations to the Corporate Governance and Nomination Committee on the indicators and contents of the performance evaluation.

In 2022, the internal performance evaluation results of the Board of Directors, Audit Committee, Remuneration Committee, Risk Management Committee, Corporate Governance and Nomination Committee all reached "excellent", indicating that the functions and operational efficiency of the Board of Directors are implemented and brought into full play.

Operation of Board of Directors and Functional Committees

Establish Corporate Governance and Nomination Committee

In response to the "Corporate Governance 3.0" of the Taiwan Stock Exchange to set up the Nomination Committee and include in the corporate governance evaluation index in 2021, we have established the "Corporate Governance and Nomination Committee" in September 2020 to strengthen the director selection mechanism for constructing professional and diversified director members, and promote the formulation and implementation of corporate governance culture and ethical management policies. Justin Tsai, an independent director, was appointed as the Chairman of this committee, with five members and three of whom are independent directors.

In 2020, we have also formulated the "Director Selection and Succession Plan" , through which the Corporate Governance and Nomination Committee will assist the Company in assessing the professional knowledge required by director. At the same time, the independence of directors and their experience in supervising economic, environmental and social topics (ESG) should be taken into consideration to formulate an appropriate diversification policy in terms of operation, business pattern and development needs, so as to find, review and nominate director candidates with basic conditions and values (gender, age, nationality and culture, etc.) and professional knowledge, skills and background (such as law, accounting, industry, finance, marketing, financial technology and information security) to effectively improve the operation of insurance business.

Corporate Governance Supervisor

To enhance the functions of the corporate governance unit of the Company and to assist the directors in the performancing duties,the Board of Directors appointed the Vice President, Yu-Ping Tien, of the Executive Office to act as the corporate governance supervisor, whose main duties include "Handling matters relating to the Board of Directors' meetings and shareholders' meetings pursuant to laws", "Preparing meeting minutes of Board of Directors' meetings and shareholders' meetings", "Assisting in onboarding and continuing education of directors", "Providing documents required for business executed by directors" and "Assisting directors with compliance" as well as building a perfect communication bridge between the Board of Directors and the management team.