Corporate Governance and Nomination Committee subordinate to the Board of Directors is designated as the specialized unit for ethical management, responsible for formulating and supervising the implementation of ethical management policies. The regulatory compliance and corporate governance units affiliated to the General Manager shall assist the Corporate Governance and Nomination Committee to promote and implement the ethical management policy, report to the Board of Directors on the compliance with ethical management every year, conduct the education and training for employees regularly, convey the ethical management ideas, and deeply cultivate the ethical management culture.
In order to establish the corporate culture and sound development of ethical management, and establish a good business structure, the Board of Directors has approved the formulation of "Code of Ethical Management" and "Ethical Management Operation Procedure and Behavior Management Policy". All forms of dishonest behavior, including improper gifts or entertainments, are prohibited, and the Company has the "Operation Method for Accepting Gifts and Entertainment", which stipulates that any person who receives the gifts or entertainments valued at more than NT$3,000 or cannot be evaluated objectively, shall immediately report to the Headquarters Regulatory Compliance Office. The complaint e-mail address shall be set, so that any person who has objective evidence and reasonable belief that any employee of the Company is involved in any crime, malpractice or violation of laws or regulations while performing his/her duties may be reported. According to evaluations from the head office and its subsidiaries, there was no incident related to honest operation involving fraud, insider trading, anti-competitive behavior, anti-trust and monopoly behavior, as well as market manipulation in 2022.
The Board of Directors is the highest decision-making unit of the Company to establish an effective risk management system, and takes the ultimate responsibility for overall risk management. The Board of Directors shall make decisions according to the overall business environment and strategy, and ensure the effective operation of risk management mechanism. The Board of Directors has a risk management committee, currently composed of 5 directors (including all independent directors), and the independent director serves as the convenor, responsible for formulating the risk management policies and procedures, implementing the risk management decisions of the Board of Directors, and reporting the overall risk management operation to the Board of Directors quarterly, as well as managing all kinds of risks and establishing the management indicators, and coordinating the interaction and communication of risk management functions across units. With the approval of the Board of Directors, a risk controller is appointed to be responsible for the overall risk management of the Company. And the Risk Management Department is set to take charge of daily risk monitoring, measurement, evaluation and other executive affairs of the Company and exercise its powers independently from business units.
Mercuries Life Insurance adopts a 'three-line of defense' in the risk management to ensure a layered and accountable risk management mode. Through the establishment of the above "three-line of defense", we strive to achieve the principle of "internal containment" and avoid the blind spots and loopholes in the risk management.
Through the process of risk identification, risk measurement and risk response, we comprehensively monitor and respond to various risks in real time, and make good use of close information exchange and communication, so as to minimize the risks. In addition, we also actively design the corresponding control mechanism for the known risks, and strive to establish an effective risk protection network by combining the professional knowledge and experience.
- Market risk limit control of the whole investment portfolio
- Foreign exchange risk value limit control
- Establish the stop-loss mechanisms for stocks and bonds
- Perform the stress tests on a regular basis
- Credit risk control of whole investment portfolio
- Credit risk limit monitoring of countries, industries and issuers
- Capital flow ratio and cash flow management
- Reinsurance planning
- Product structure design
- Reserve risk management
- Risk and control self-assessment(RCSA)
- Key risk indicator(KRI)
- Monitor the duration and convexity of assets and liabilities
- Monitor the capital flow ratio
- Disaster backup and support
- Security monitoring of important core systems
- Establish the code of conduct for information security
- Formulate the regulatory compliance events reporting standards and actively manage
- Management Measures on Climate Change Risk (covering governance, strategy, risk management, indicators and targets, etc.)
- Establish the project team, and actively introduce the reporting standards
- Perform regular ground trials and parallel tests to monitor capital standards
- Operation continuity management plan
- Operational abnormal event handling standard and operating procedure
- Major contingencies reporting regulation
- Operation crisis responding measures
(1) Staff information security training - including malware and threats, password security and management, e-mail security and social engineering techniques, information system protection and emerging technologies (such as Internet of Things, mobile devices, and blockchain), etc.
(2) To conduct the monthly e-mail social engineering drill, and conduct the educational training for those who fail to pass, so as to enhance the awareness of e-mail security risk. The average rate of mistaken opening of letters in 2021 was 1.16%, which was lower than that in 2021.
(3) To conduct the workplace environment visit of head office, branch offices, service centers and 50% communication offices, share the result of environment visit, and ask each unit to strengthen the control, so as to enhance the staff's awareness of information security risk.
The Company introduces the personal information management system to consider the complete operation process of policyholder’s personal data collection, processing and utilization. In 2022, the Company passed the British Standard Institution BSI 10012: 2017 Personal Information Management System (PIMS) certification, and conducted the "Personal Data Protection Law Advocacy Educational Training Course" at least once a year, to ensure that the data can be properly protected.
The Company has signed the compliance statement to the "Code of Due Diligence Governance of Institutional Investors", and revealed the due diligence governance performance report on the website; to fulfill the due diligence governance of institutional investors, for important assets investment, the Company has participated in all the investment company’s corporate orientation meeting, or through the brokers arranged visits, direct dialogued with the invested company's management, to learn about the investee company's business strategy, operation overview, financial status, and other issues, and pay attention to whether the investee company has good integrity and corporate governance. And the Company has also arranged to participate in the shareholders' meetings of some investee companies, so as to increase the interaction with the management, further deepen the understanding of the operation of investee companies, and demonstrate the importance of the Company to the operation of investee companies. In 2022, the attendance rate of shareholders' meetings of listed companies reached 97.16%. It has far exceeded the target set by the competent authority for the insurance industry to attend the shareholders' meetings of listed companies by 70% in 2020.
The Company sold investment-linked insurance products, with connection to overseas funds, bonds, or ETF investment targets, also completed the revision of "Review Specifications for Recommendation of Investment Policy Connected Fund" and "Review Specifications for Recommendation of Investment Policy Connected Index Fund" in November 2021, and the ESG has been included in the investment target inspection standard, to implement the sustainable development, and to confirm whether the fund has incorporated ESG factors into the investment decision-making process, incorporated the local political and investment risks into the assessment, and excluded the investment in human rights disputes and arms and other related industries.
In response to the government's "5+2" investment in key innovative industries, the amount of sustainable investment in 2022 exceeded NT$54.58 billion, including biotechnology and medicine, green energy technology and environmental circular economy. In addition, we increase the proportion of sustainable investment every year to achieve the goal of strengthening green energy investment. In the life insurance industry, the sustainable investment initiatives to properly use the capital, not only promot the transformation of domestic industry, but also assist the development of green industry, to contribute to environmental sustainability.