Nanjing East Rd, - centralre.com · Net Income 765,790 780,140 98.16 (III) Profitability Analysis The table below shows an analysis on the profitability ratios of 2016 as compared

Nanjing East Rd,

2016

Printed on 2 April, 2017

Annual Report

封面_429.4x297.pdf 1 17/5/19 下午12:12

封面_429.4x297.pdf 2 17/5/19 下午12:12

CONTENTS

ONE. LETTER TO SHAREHOLDERS 1 A. 2016 Operating Report 3 B. Summary of the 2017 Business Plan 10 C. Future Development Strategies 12 D. Influences of the External Competition, Regulatory Environment and Macro Environment 13

TWO. COMPANY PROFILE 18 A. Date of Incorporation 18 B. Company History 18

THREE. CORPORATE GOVERNANCE REPORT 19 A. Organization 19 B. Directors and Management Team 20 C. Implementation of Corporate Governance 29 D. Corporate Social Responsibility 44 E. Ethical Corporate Management 55 F. Material Resolutions of Shareholders Meeting and Board of Directors Meeting 64 G. Information on CPA Professional Fees and Replacement of Certified Public Accountant 67 H. Changes in Shareholdings and Shares Pledged by Directors, Managers and Major Shareholders 69

FOUR. CAPITAL OVERVIEW 71 A. Source of Capital Stock 71 B. Shareholders Structure 72 C. Diffusion of Ownership and List of Principal Shareholders 72 D. Disclosure of the Share Prices and Related Information for the Past Two Fiscal Years 73 E. Dividend Policy and Earnings Distribution Implementation Status 74

FIVE. BUSINESS OPERATIONS OVERVIEW 75 A. Business Activities 75 B. Market Overview 80 C. Human Resources 82 D. Labor Relations 82 E. Important Contracts 86

SIX. FINANCIAL INFORMATION 88 A. Financial Statement for Recent Five Years 88 B. Financial Analyses for Recent Five Years 92 C. Audit Committee’s Review Report 94 D. Financial Statements and Report of Independent Accountants 94

Central Reinsurance Corporation Annual Report 20161

ONE. LETTER TO SHAREHOLDERS

Dear Shareholders,

Since its establishment in 1968, Central Reinsurance Corporation (Central Re) has been

diligently contributing to Taiwan's reinsurance market for nearly fifty years. To actively

expand our international reinsurance business, the Company has also established the

Offshore Insurance Units (OIU) in 2016. Adhering to our steady and prudent

philosophy, we have been fully devoted to the development of our core business in

reinsurance as well as optimized fund utilization. Looking back on 2016, non-life

insurance industry in Taiwan was suffered from Meinong earthquake which resulted in

higher loss ratio than the previous years. In addition, the fluctuation in international

financial market and the continuous low interest rate have both affected the efficiency

of fund utilization. Therefore, Central Re has been facing a very challenging business

environment. Despite these, the Company still reported good business results in 2016 -

thanks for the efforts of all employees and the support of our shareholders. The

operating revenue for the year is NTD13.444 billion, after-tax profit amount to

NTD766 million and earnings per share (after tax) is NTD1.36. These are roughly the

same as those of the preceding year. The distributable earning, nevertheless, is slightly

lower than that of the preceding year after setting apart the legal and special reserves

required by law.

In terms of financial strength and capital structure, the Company has been continuously devoted to solidifying its financial basis and improving the effectiveness of fund utilization. As a whole, the Company maintains a robust financial structure. The total amount of technical reserves for retained business has reached NTD22.168 billion. The paid-in capital is NTD5.623 billion and the equity before distribution of dividends is NTD9.499 billion, being the highest in recent years.

In 2017, Standard & Poor's affirmed our credit rating of "A" with stable outlook based

on the Company’s very strong capital and earnings, solid domestic market position and

strong liquidity profile. Taiwan Ratings Corp. also confirmed our rating of "twAA+".

In addition, another international rating agency A.M. Best has continuously recognized our operation performance and reaffirmed our A rating and stable outlook in July 2016. Long term good credit ratings will not only be beneficial for the acquisition of quality business, but also demonstrate our good solvency capability to protect our commitment to our customers.

Central Reinsurance Corporation Annual Report 2016 2

Looking forward, the management team will commit to the corporate spirits of "Challenge, Innovation and Teamwork" to diligently cultivate the domestic market, build up international perspective and prudently expand business. In the meantime, we will also practice appropriate capital management and sound investment activities to achieve our goals of steady increase of revenue and profit and sustainable development of our enterprise, thereby fulfilling our vision to become "The Best Professional Reinsurer in Asia". We thank all shareholders for your continuous support and guidance from you and hope you will all have good health and wishes come true.

Chairman


A. 2016 Operating Report

Central Reinsurance Corporation is the sole domestic professional reinsurance

company in Taiwan, mainly engaged in non-life and life reinsurance business for

domestic and overseas insurance firms. Adhering to its business philosophy of ethical

management, stability and integrity, the Company is devoted to maintaining the good

order of the insurance market, diversifying risk for its customers, facilitating the

development of insurance industry and fulfilling its corporate responsibilities. To

ensure the sustainable development of the Company and keep pace with the market

trend, the Company has been actively improving its service to domestic customers; in

the meantime expanding its international market through robust strategies. The ultimate

purpose is to enlarge its operational foundation and diversify the risk of geographical

concentration.

With the collective efforts of all its employees, the Company reports a net income of

NT$765,790 thousand for the year of 2016. Appended below is the Company's

operating report for 2016:

(I) Implementation of the Operating Plan

1. Business Performance:

The gross premium written for the year is NT$14,041,751 thousand, being

NT$741,511 thousand or approximately 5.6% over the budgeted

NT$13,300,240 thousand. An analysis is provided below based on business

type:

(1) Non-life Reinsurance:

The gross premium written NT$10,071,595 thousand, being NT$532,585

thousand or approximately 5.6% over the budgeted NT$9,539,010

thousand. The difference was mainly because of the increase in automobile

insurance and casualty insurance.

(2) Life Reinsurance:

The gross premium written NT$3,970,156 thousand, being NT$208,926

thousand or approximately 5.6% over the budgeted NT$3,761,230

thousand. The difference was mainly because of the increase from health

insurance.


2. Financial Management:

(1) Capital Management:

As at the end of 2016, the total paid-in capital of the Company is

NT$5,622,750 thousand. Total shareholders' equity before distribution is

NT$9,499,209 thousand. The capital structure of the Company remains

strong.

(2) Reserve Adequacy:

In order to build up a solid financial basis and strengthen its solvency, the

Company provides adequate reserves. At the end of 2016, the sum of

various reserves is NT$22,168,024 thousand.

(3) Fund Investment:

The investment income is NT$171,419 thousand, being NT$208,688

thousand or 54.9% less than the budgeted NT$380,107 thousand.

3. Credit Ratings:

In 2017, Standard & Poor's affirmed its credit rating of "A" with stable outlook

based on the Company’s very strong capital and earnings, solid domestic market

position and strong liquidity profile. Taiwan Ratings Corp. also confirmed the

Company’s rating of "twAA+".

Meanwhile, A. M. Best affirmed the Company’s "A" rating with stable outlook

in July 2016 in recognition of its management performance. Good credit ratings

are helpful for developing reinsuring high-quality business. They also prove the

Company's strong solvency to fulfill its commitment to customers.

The latest ratings are shown as follows.

Rating Agency Rating Outlook

A.M. Best A Stable

Standard & Poor’s A Stable

Taiwan Ratings twAA+ Stable


(II) Budget Implementation and Financial Status

The comparison between the actual and budgeted of the year was shown as

follows:

NT$ thousands Item Actual Budget Achievement (%)

Operating Revenues 13,444,095 13,158,222 102.17

Operating Costs 12,220,148 11,884,690 102.82

Gross Operating Income 1,223,947 1,273,532 96.11

Operating Expenses 310,036 331,972 93.39

Net Operating Income 913,911 941,560 97.06

Non-Operating Income and Expenses

-1,190 0 -100.00

Income from Continuing Operations Before Tax

912,721 941,560 96.94

Income Tax Expense 146,931 161,420 91.02

Net Income 765,790 780,140 98.16

(III) Profitability Analysis

The table below shows an analysis on the profitability ratios of 2016 as

compared to those of 2015: The earing per share (after tax) for 2016 is NT$1.36,

the same as that of 2015.

Year Ratio

2016 2015 Average

Profitability

Return on Assets (%) 2.29 2.28 2.29 Return on Equity (%) 8.13 8.14 8.14 Net Operating Income / Paid-Up Capital (%) 16.25 17.49 16.87 Income from Continuing Operations Before Tax/Paid-Up Capital (%) 16.23 17.46 16.85

Net Profit Margin (%) 5.70 5.44 5.57 Earnings Per Share (After Tax)(NT$) 1.36 1.36 1.36


(IV) Research & Development

1. Research & Development/Customer Service

(1) To strengthen its internal control and increase the efficiency at work, the

Company has been continuously developing integrated information

management system. An off-site back-up system has also been established

to ensure the smooth operation of the system. In future, the Company will

continue making system adjustments and upgrades to support the

development plan of the Company and accommodate to statutory

requirements. The implementation of data warehouse enables multi-faceted

information analysis to assist with the strategic and business

decision-making by the management team.

(2) The Company endeavors to absorb and adopt the most advanced concepts

and technologies from the global market to achieve integrated risk

management on a continuous basis. Based on its successful experience in

risk management, the Company also provides relevant consulting services

to customers and assists the competent authority in facilitating risk

management policies and regulations for the industry. It is hoped that the

collective efforts would help improving the technology standards in risk

management for the industry.

(3) By means of market analysis and consumer demand observation, the

Company provides tailored services to achieve higher quality standard and

build up marketing competitiveness. Various supporting programs are

offered to customers on a timely basis, including new product design,

underwriting and claim management expertise, regulatory and actuarial

consulting services, etc. The purpose is to solidify customer relationship and

create superior business opportunities and platforms on an ongoing basis.

(4) In order to render value-added services to customers and improve its

professional image, the Company has organized many professional

seminars in 2016.


Seminars or programs for our non-life insurance clients:

a. Executive Summit of Non-life Insurance Companies

b. Future Talent -Reinsurance Principles and Practices

c. Seminars for Reinsurance Managers in Non-Life Insurance Industry- A

Brief Overview of the Management of Accident and Health Insurance

coverage for Less than 3 Years by Non-Life Insurance Companies

based on the Life Insurance industry's experience

d. New Definition of Critical Illnesses and Interpretation of Pathology

Reports

e. Tumor Underwriting

Seminars or programs for our life insurance clients:

a. Seminar on Aging Products of Life Insurance in Japan

b. Seminar Series for Underwriting and Claims of Life Insurance: Tumor

Underwriting, Financial Underwriting, Underwriting Assessment of

Abnormal ECG and Relevant Heart Diseases, Basics of Reinsurance

for Underwriters

c. Medical Insurance Seminar: Underwriting and Claims Assessment of

Common Mental Illnesses

The Company has provided various professional seminars to satisfy our

clients’ needs for years. Participants were given the opportunities to discuss

the market status and future trends, share information and improve their

professional expertise. The course and seminars also contributed to the

tightening of customer relationship for the Company.

2. Talent Development

(1) The Company administers the following on-job training through its training

system:

a. Regular Training: Internally, the Company organizes regular internal

training to improve employees' work attitude, job competency and

encourage self-growth.

Organized "Orientation for New Employees", which was attended

by 6 persons.

Organized "Compliance training and promotion": total four sessions,


which were attended by 180 persons.

Organized "Internal Audit - Internal Control Self-Assessment"

training, which was attended by 57 persons.

Organized "Money Laundering Prevention Training and Promotion

": 2 sessions were conducted, which were attended by 77 persons.

Organized "Personal Information Protection - Basic Awareness

Course", which was attended by 52 persons.

Organized "Ethical Corporate Management Training", which was

attended by 44 persons.

Organized "2016 Risk Management Training": 4 sessions were

conducted, which were attended by 107 persons.

b. Professional training: to enhance the employees' professional

knowledge and expertise and elevate their work efficiency, the

Company also organizes various courses to accommodate the needs of

staff at different levels, including professional know-how, techniques,

concepts and practices:

Assigned employees for external courses or seminars on shareholder

services, general administration, labor safety and human resources

management, etc.: total 9 persons.

Assigned employees to attend external professional training or

seminars on financial, accounting and investment: total 50 persons.

Assigned employees to attend external professional reinsurance and

actuarial training: total 221 persons.

Assigned employees to attend external professional

training/seminars on risk management and loss control: total 38

persons.

c. Statutory Training: According to the "Regulations Governing

Implementation of Internal Control and Auditing System of Insurance

Enterprises", the Company requires its auditors and compliance

personnel to attend the statutory training and meet the required training

hours, in the meantime improve their professional expertise thereof.

External training for auditors: attended by 36 persons.

External training for compliance personnel: attended by 14 persons.


(2) To support its operating plan and develop reinsurance professionals, the

Company also sent employees overseas to attend international conventions,

to observe best practices and to participate in training courses: total 10

persons.

(3) On an ongoing basis, the Company encourages its employees to obtain

professional licenses for their jobs. So far, a total of 59 employees have

acquired domestic or international licenses on non-life/life insurance and

financial management.

a. The certificate as a qualified insurance underwriter of non-life

insurance: 20

b. The certificate as a qualified claim adjuster of non-life insurance: 9

c. The certificate as a qualified insurance underwriter of life insurance: 5

d. The certificate as a qualified claim adjuster of life insurance: 3

e. Fellow of the Actuarial Institute of Chinese Taipei: 2

f. International Certificates: CPCU 2 persons, ACII 1 person, DipCII 1

person, SOA ASA 2 persons, CAS ACAS 1 person, ALU 1 person,

FLMI 5 persons, LOMA ACS 3 persons, LOMA AAPA 1 person,

FRM 2 persons, ARM 1 person.

(4) To optimize its human resources, the Company endeavors to place

employees at the most suitable positions in terms of personal interest and

strengths, in the meantime fulfill the human resources strategies. During

the year, therefore, the Company has recruited 6 new employees, arranged

job transfer for 10 employees and promoted 12 employees.


B. Summary of the 2017 Business Plan

Based on the competitive market, the regulatory influence and business environment,

the Company has established its 2017 operating plan as follows:

(I) Business Strategies

1. Strengthen capital structure management; improve the effectiveness of capital

utilization.

(1) Solidify the financial strength and capital base, so as to expand the

underwriting capacity and elevate risk tolerance.

(2) Conduct proper assessment on asset/return relationship, exercise caution in

asset allocation to improve the effectiveness of capital utilization and create

shareholder value.

2. Constantly improve the Company's risk management abilities; in the meantime

ensure full implementation of the risk management mechanisms.

(1) Apply strategically risk management; align business decisions with risk

management policies.

(2) Grasp the development trend of emerging risks to ensure prudent control of

catastrophe risk accumulation.

(3) Ensure the suitability of the risk transactions undertaken; execute the risk

control procedures effectively.

(4) Instill a culture of risk awareness; incorporate risk management into daily

routines.

3. Focus on customer demands and provide feedback to the insurance market.

(1) Grasp market trends and organize professional seminars, aiming to

providing value-added service to customers and enhance customer

relationship.

(2) Accommodate customer needs by providing tailored reinsurance services;

create a business development platform with good quality.


(3) Actively participate in research programs relating to actuarial and statistics,

insurance operations, risk management and corporate governance, etc., to

contribute to the professional development of the local insurance market.

4. Adhere to sound investment strategies.

Adopt safe and steady investment strategies, supported by prudent risk

management. The purpose is to achieve stable business income to ensure the

sustainable development of reinsurance business.

(II) Sales Forecast and Basis

Looking forward to this year, we expect the global economy to recover at a slow

pace. However, the soft market trend continued in the reinsurance market, and

rating agencies remain holding a conservative outlook toward the global

reinsurance industry. This could partly offset the positive effects of increased

insurance demand accompanying the economic growth. The Company expects

that the sales performance of the year will be the same as that of last year, or will

have a moderate growth.

(III) Important Production and Sales Policies

Facing the challenging environment, the Company will, as a rating A evaluated

by international credit rating agencies, adhere to the principles of prudent

underwriting and cautious expanding to develop its domestic and overseas

business; in the meantime establish a best business portfolio with integrated risk

management and optimized profitability.


C. Future Development Strategies

The Company is committed to becoming the "The Best Professional Reinsurer in

Asia". It has built up the following development strategies based on the changes in

business environment and market trends:

� Continue cultivating domestic market; achieve good business performance on a

long-term basis by optimizing the domestic resources.

� Steadily expand international business; optimize the business portfolio;

consolidate resources for developing international facultative reinsurance

business; strengthen quality control to grow overseas business, both in terms of

quality and quantity.

� Provide customer-oriented services to increase service effectiveness and

customer satisfaction.

� Steadily improve the efficiency of fund utilization; enhance fund structure

management to ensure the sustainable management of the Company.

� Enhance compliance and internal audit/control procedures; strengthen risk

management; implement good corporate governance.

� Fulfill corporate social responsibilities; achieve sound ethical corporate

management to facilitate the continuous development of the insurance market.

� Devote to talent development to create motivating visions for employees.


D. Influences of the External Competition, Regulatory Environment and Macro Environment

(I) External Competition

As at the end of 2016, there were three reinsurance companies in Taiwan. Apart

from the Company, the other two were General Reinsurance AG Taiwan Branch

and RGA Global Reinsurance Company Limited Taiwan Branch. While the

high retention ratio maintained by domestic insurers has led to the slowdown of

domestic reinsurance market, the momentum in global reinsurance capacity

remains abundance. The Company, therefore, is still facing a challenging

business environment.

(II) Regulatory Environment

1. The Insurance Act

In order to encourage insurance enterprises to participate in public infrastructure

investment, the competent authority amended Article 146-5 of the Insurance

Act in 2016. According to the amended version, investments made by insurance

enterprises in public utilities are no longer subject to the restrictions set forth in

relevant articles of the Act. However, when the insurance enterprise or its

representative serves as a director or supervisor of the invested company, the

number of directors or supervisors appointed by the insurance enterprise shall

not exceed one third of the total number of directors or supervisors of the

invested company, and the insurance enterprise shall not appoint any person to

act as manager of the invested company.

The Company will comply with the aforementioned amendments when

engaged in such investment in future.

2. Regulations Governing Foreign Exchange Business Operated by Insurance

Enterprises

To support the insurance enterprises to develop the market and secure new

business opportunities, the competent authority has partially amended the

Regulations respectively on March 23 and December 30, 2016. The competent

authority has, in the meantime, incorporated relevant provisions to allow


insurance enterprises to operate foreign currency loan business. The major

amendments are as follows:

(1) A new provision was added, stipulating that insurance enterprises may

operate foreign currency loans in its role as a participant of a foreign

currency syndicated loan. The relevant compliance requirements for

managing such business are incorporated into the amendments as well.

(Amendments of Article 3 and 14)

(2) If an insurance enterprise applies for foreign exchange business that is not

yet approved by the Central Bank of the R.O.C., the Central Bank may

specify the relevant compliance requirements in the letter of approval.

(Amendment of Article 4)

(3) When an insurance enterprise applies for foreign exchange business, its

heads of compliance, audit and accounting units shall issue a statement to

confirm their compliance with the applicable laws, relevant regulations and

accounting standards of the competent authority. (Amendment of Article 6)

The Company will comply with the aforementioned amendments when

applying for such foreign exchange business in future.

3. Regulations Governing Use of Insurer’s Funds in Special Projects, Public

Utilities and Social Welfare Enterprises

In order to encourage the insurance enterprises to invest in public utilities, social

welfare enterprises, domestic entrepreneurs and the five major innovative

industries, the competent authority has partially amended the Regulations on

February 3 and August 31, 2016 respectively. The major amendments are as

follows:

(1) A new provision was added, stipulating that insurance enterprises may

invest in lawfully-established limited partnership. The relevant compliance

requirements for investing in such business are incorporated into the

amendment as well. (Amendment of Article 5)

(2) Insurance enterprises are no longer required to submit their investment

plans and provide investment purposes when investing in the companies

prescribed in Article 3 and Article 4 of the Regulations, subject to that they


have presented the assessment opinions issued by qualified CPA regarding

the financial adequacy of the investment and opinions provided by a

qualified lawyer confirming the legality thereof. If the invested company

has been established for less than one year, it is not necessary for the

insurance enterprise to present the financial report of such invested

companies. (Amendment of Article 8)

(3) Insurance enterprises investing in limited partnership in accordance with

the Regulations are still required to submit relevant documents and obtain

approval from the competent authority in advance. Once the approval is

acquired, however, the insurance enterprise may participate in the cash

capital increase of the invested enterprise without further approval, subject

to that there is no increase to its original share against the total investment

in the project and that the relevant documents are submitted to the

competent authority for subsequent review. For insurance enterprises

investing in one and the same venture investment enterprise, the competent

authority has also relaxed the threshold amount for exemption of the

approval procedures. (Amendment of Article 9)

The Company has established/revised relevant internal rules to comply

with the aforementioned Regulations.

4. Money Laundering Control Act

To strengthen the money laundering prevention system, meet international

standards and increase the transparency of fund flow, the competent authority

announced significant amendments on the Act on December 28, 2016, which

shall enter into force six months thereafter. The main amendments are as

follows:

(1) Amended the behavior patterns of money laundering. (Amendment of

Article 2)

(2) Revised the minimum punishment against serious crimes to an

imprisonment of 6 months; extended the scope of serious crimes used in the

Act and removed the threshold on the property or property interests

obtained from committing such crimes. (Amendment of Article 3)


(3) Included new provisions to set forth the punishment against avoiding,

refusing or hampering the inspection by the competent authority.

(Amendment of Article 6)

(4) Included the obligations on customer due diligence and retention of

transaction records. (Amendments of Article 7 and 8)

(5) Added the exemption clause on confidentiality obligations when a financial

institution reports large cash transactions and suspicious transactions to

meet statutory requirements. (Amendments of Article 9 and 10)

(6) Included the provision that the competent authority may apply

countermeasures against high-risk countries or regions of money

laundering and terrorism financing. (Amendment of Article 11)

(7) Set forth the punishment against behaviors of evading the anti-money

laundering obligations or the attempts to do so, as well as the disposal of

property or property interests acquired thereby; expand the scope of

confiscation to include the property or property interests obtained through

money laundering activities. (Amendments of Article 15 and 18)

The Company will enhance its compliance operations in respect of

anti-money laundering and countering the financing of terrorism in

accordance with the aforementioned amendments of Money Laundering

Control Act and relevant regulations.

(III) Macro Environment

According to the updated statistics announced by a number of international

economic institutes such as World Bank, Global Insight and International

Monetary Fund, higher growth rates in global economy and trade are expected

in 2017, as compared to those of 2016. The macro-economy is expected to

recover at a slow speed. However, there are still concerns about the potential

fluctuation in global finance market caused by changes in economic/trade

policies by the US new government, the uncertainty in the political and

economic situation of the European countries, and the probability of debt crisis

in the emerging markets caused by the outflow of funds and currency

devaluation.


In the "National Income and Domestic Economic Outlook" issued by the

Directorate General of Budget, Accounting and Statistics (DGBAS) in February,

2017, the forecast made by Global Insight was cited: The global economic

growth rate for 2017 is estimated at 2.8%, of which USA is expected to have a

moderate growth of 2.3%, EU 1.6%, China 6.5%, South Korea 2.7%, Hong

Kong 1.8%, and Singapore 1.5%. As to Taiwan, the increase in overseas market

demand and the government's active efforts in revitalizing the economy will

both lead to gradual warm-up of the domestic demand. DGBAS therefore

forecast a growth rate of 1.92% for year 2017, a slight rise when compared with

last year.

Looking at the world economic situation as a whole, the growth will remain

being impacted by the potential risks in spite of the gradual warming trend. The

insurance industry will inevitably be influenced by the economic environment.

In terms of the management of reinsurance industry, the results of contract

renewal for the year reflect the abundance of capital and the weak rate in the

market. Regardless of the slight deviation in different markets, the overall

environment remains challenging. To achieve its business objectives in this

challenging environment, the Company will adhere to its principles of robust

management; focus on its core business and strengthen capital management.


TWO. COMPANY PROFILE

A. Date of Incorporation

October 31, 1968

B. Company History

Central Re was established by the Ministry of Finance (MOF) on October 31, 1968

with the mission of promoting the sound development and sustainable growth of the

domestic insurance industry. Central Re was founded with capital stock of NT$15

million, but after numerous capital injections, the company’s paid-up capital reached

its current NT$5,622.75 million.

Central Re is the sole domestic reinsurance company in Taiwan and specializes in

undertaking reinsurance of domestic and international non-life and life insurance

companies. In line with the trends of liberalization and globalization, Central Re

completed its privatization process on July 11, 2002. However, at present, the

Taiwan’s Ministry of Finance remains the second-largest shareholder of Central Re.

Meanwhile, the Evergreen Group, one of the top transportation groups in the world, is

Central Re’s largest shareholder.

Central Re was approved to set up OIU in September 2015 and started doing business

on January 1, 2016. With the establishment of OIU and its tax benefit, Central Re will

be able to enhance its competitiveness and improve the quality of its overseas

business to achieve a better mixture of overall portfolios.

To increase its competitiveness, Central Re adopted the Evergreen Group’s motto of

“Challenge, Innovation and Teamwork”. The company will continue to become a

market paradigm to enhance clients’ value. Its vision is to become "The Best

Professional Reinsurer in Asia".

THREE. CORPORATE GOVERNANCE REPORT

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Chi

na

Ever

gree

n In

tern

atio

nal C

orp.

-

2014

. 06

.11

3 Ye

ars

2002

.10.

29

197,

541,

037

35.1

3 19

7,54

1,03

7 35

.13

- -

0 0

- -

- -

-

Rep

rese

ntat

ive:

C

hang

, Kuo

-Che

ng

M

2014

. 06

.11

3 Ye

ars

2007

.06.

12

0 0

6,54

1,89

9 1.

16

0 0

0 0

Cha

irman

, Ev

ergr

een

Mar

ine

Cor

p. (T

aiw

an) L

td.

Bos

ton

Uni

vers

ity(B

SBA

)

Dire

ctor

:

Cha

ng Y

ung-

Fa

Cha

rity

Foun

datio

n

Supe

rvis

or:

Ev

ergr

een

Inte

rnat

iona

l Cor

p.

- -

-

20

Title

N

atio

nalit

y or

Pla

ce o

f R

egis

tratio

n N

ame

Gen

der

Dat

e El

ecte

d Te

nure

(Y

ears

)

Dat

e of

In

itial

El

ectio

n,

App

oint

- m

ent

Shar

ehol

ding

whe

n El

ecte

d Pr

esen

t

Shar

ehol

ding

Sp

ouse

& D

epen

dent

s Sh

areh

oldi

ng

Shar

ehol

d- i

ng b

y O

ther

N

omin

ee

Expe

rienc

e &

Ed

ucat

ion

Oth

er P

ositi

on

Oth

er M

anag

ers,

Dire

ctor

s or S

uper

viso

rs

Rel

ated

by

Mar

riage

or

With

in S

econ

d-de

gree

ki

nshi

p of

Eac

h O

ther

Shar

es

Sh

ares

Shar

es

Sh

are

s

Title

N

ame

Rel

a-

tion

Dire

ctor

R

epub

lic o

f C

hina

Ever

gree

n In

tern

atio

nal C

orp.

-

2014

. 06

.11

3 Ye

ars

2002

.10.

29

197,

541,

037

35.1

3 19

7,54

1,03

7 35

.13

- -

0 0

- -

- -

-

Rep

rese

ntat

ive:

Ta

i, Ji

in-C

hyua

n M

20

14.

06.1

1 3

Year

s 20

14.0

6.11

0

0 0

0 0

0 0

0

Lega

l Exe

cutiv

e V

ice

Pres

iden

t, Ev

ergr

een

Inte

rnat

iona

l Cor

p.

Mas

ter d

egre

e in

M

ariti

me

Law

, N

atio

nal T

aiw

an

Oce

an U

nive

rsity

Pres

iden

t, Ev

ergr

een

Inte

rnat

iona

l Cor

p.

Dire

ctor

:

EVA

Airw

ays C

orp.

, Ev

ergr

een

Inte

rnat

iona

l St

orag

e &

Tran

spor

t C

orp.

, Eve

rgre

en

Inte

rnat

iona

l Cor

p.,

Uni

Airw

ays C

orp.

, Ev

ergr

een

Sky

Cat

erin

g C

orp.

, Ev

ergr

een

Secu

rity

Cor

p., S

hun

An

Ente

rpris

e C

orp.

, Ev

ergr

een

Avia

tion

Tech

nolo

gies

Cor

p.,

Taip

ei P

ort C

onta

iner

Te

rmin

al C

orp.

, Sup

er

Max

Eng

inee

ring

Ente

rpris

e C

orp.

, C

hang

Yun

g-Fa

Fo

unda

tion,

Cha

ng

Yung

-Fa

Cha

rity

Foun

datio

n

- -

-

Dire

ctor

R

epub

lic o

f C

hina

R

epre

sent

ativ

e:

Ku

Lai,

Mei

-Hsu

eh

F 20

14.

06.1

1 3

Year

s 20

11.0

6.15

0

0 0

0 0

0 0

0

Seni

or V

ice

Pres

iden

t, Fi

nanc

e D

ivis

ion

of

Ever

gree

n In

tern

atio

nal C

orp.

Fina

nce

Exec

utiv

e Vi

ce P

resi

dent

, Ev

ergr

een

Inte

rnat

iona

l Cor

p.

- -

-

21

Title

N

atio

nalit

y or

Pla

ce o

f R

egis

tratio

n N

ame

Gen

der

Dat

e El

ecte

d Te

nure

(Y

ears

)

Dat

e of

In

itial

El

ectio

n,

App

oint

- m

ent

Shar

ehol

ding

whe

n El

ecte

d Pr

esen

t

Shar

ehol

ding

Sp

ouse

& D

epen

dent

s Sh

areh

oldi

ng

Shar

ehol

d- i

ng b

y O

ther

N

omin

ee

Expe

rienc

e &

Ed

ucat

ion

Oth

er P

ositi

on

Oth

er M

anag

ers,

Dire

ctor

s or S

uper

viso

rs

Rel

ated

by

Mar

riage

or

With

in S

econ

d-de

gree

ki

nshi

p of

Eac

h O

ther

Shar

es

Sh

ares

Shar

es

Sh

are

s

Title

N

ame

Rel

a-

tion

Min

g Ch

uan

Uni

vers

ity

Supe

rvis

or:

Ev

ergr

een

Mar

ine

Cor

p. (T

aiw

an) L

td.,

EV

A A

irway

s Cor

p.,

Ev

ergr

een

Sky

Cat

erin

g C

orp.

,

Uni

Airw

ays C

orp.

, Ev

er A

ccor

d C

onst

ruct

ion

Cor

p.,

Ever

gree

n Lo

gist

ics

Cor

p.

Dire

ctor

R

epub

lic o

f C

hina

M

inist

ry o

f Fin

ance

, R

.O.C

. -

2014

. 06

.11

3 Ye

ars

1968

.10.

31

127,

539,

689

22.6

8 12

3,26

6,68

9 21

.92

- -

0 0

- -

- -

-

Dire

ctor

R

epub

lic o

f C

hina

R

epre

sent

ativ

e:

Lee,

Yi-F

en

F 20

14.

06.1

1 3

Year

s 20

11.0

6.15

0

0 0

0 0

0 0

0

Seni

or E

xecu

tive

Offi

cer,

Dep

artm

ent

of P

lann

ing,

M

inist

ry o

f Fin

ance

, R

.O.C

.

Mas

ter G

radu

ate,

In

stitu

te o

f Pub

lic

Polic

y Sc

ienc

e,

Nat

iona

l Chu

ng

Hsi

ng U

nive

rsity

Dep

uty

Dire

ctor

G

ener

al, D

epar

tmen

t of

Pla

nnin

g, M

inis

try

of F

inan

ce, R

.O.C

.

- -

-

Dire

ctor

R

epub

lic o

f C

hina

R

epre

sent

ativ

e:

Che

n, K

uan-

Pao

M

2014

. 07

.25

2.83

Ye

ars

2014

.07.

25

0 0

0 0

0 0

0 0

Dire

ctor

, N

orth

ern

Reg

ion

Offi

ce, N

atio

nal

Prop

erty

A

dmin

istra

tion

Dep

uty

Dire

ctor

Act

ing

Dire

ctor

G

ener

al,

Trai

ning

Inst

itute

, M

inist

ry o

f Fin

ance

, R

.O.C

- -

-

22

Title

N

atio

nalit

y or

Pla

ce o

f R

egis

tratio

n N

ame

Gen

der

Dat

e El

ecte

d Te

nure

(Y

ears

)

Dat

e of

In

itial

El

ectio

n,

App

oint

- m

ent

Shar

ehol

ding

whe

n El

ecte

d Pr

esen

t

Shar

ehol

ding

Sp

ouse

& D

epen

dent

s Sh

areh

oldi

ng

Shar

ehol

d- i

ng b

y O

ther

N

omin

ee

Expe

rienc

e &

Ed

ucat

ion

Oth

er P

ositi

on

Oth

er M

anag

ers,

Dire

ctor

s or S

uper

viso

rs

Rel

ated

by

Mar

riage

or

With

in S

econ

d-de

gree

ki

nshi

p of

Eac

h O

ther

Shar

es

Sh

ares

Shar

es

Sh

are

s

Title

N

ame

Rel

a-

tion

Gen

eral

, Nat

iona

l Pr

oper

ty

Adm

inist

ratio

n,

Min

istry

of F

inan

ce,

R.O

.C.

Dep

artm

ent o

f Lan

d Ec

onom

ics,

Nat

iona

l C

heng

chi U

nive

rsity

Inde

pend

ent

Dire

ctor

R

epub

lic o

f C

hina

Y

au, S

ea-W

ain

M

2014

. 06

.11

3 Ye

ars

2008

.06.

13

0 0

0 0

0 0

0 0

Dea

n, C

olle

ge o

f La

w, C

hine

se

Cul

ture

Uni

vers

ity

Juris

Doc

tor,

Uni

vers

ity o

f Iow

a

Dea

n, O

ffice

of

Inte

rnat

iona

l &

Cro

ss-S

trait

Aca

dem

ic

Exch

ange

, Soo

chow

U

nive

rsity

Prof

esso

r, Sc

hool

of

Law,

Soo

chow

U

nive

rsity

Exec

utiv

e D

irect

or &

C

hief

Exe

cutiv

e O

ffice

r, Jo

hn T

ung

Foun

datio

n

-

-

-

Inde

pend

ent

Dire

ctor

R

epub

lic o

f C

hina

Ts

en, R

on-S

you

M

2014

. 06

.11

3 Ye

ars

2014

.06.

11

0 0

0 0

0 0

0 0

Life

Insu

ranc

e Pr

oduc

ts R

evie

w

Com

mitt

ee M

embe

r, In

sura

nce

Bur

eau,

Fi

nanc

ial

Supe

rvis

ory

Com

mis

sion

Dire

ctor

, Glo

bal L

ife

Insu

ranc

e C

ompa

ny

Mas

ter o

f Sci

ence

,

- -

- -

23

Title

N

atio

nalit

y or

Pla

ce o

f R

egis

tratio

n N

ame

Gen

der

Dat

e El

ecte

d Te

nure

(Y

ears

)

Dat

e of

In

itial

El

ectio

n,

App

oint

- m

ent

Shar

ehol

ding

whe

n El

ecte

d Pr

esen

t

Shar

ehol

ding

Sp

ouse

& D

epen

dent

s Sh

areh

oldi

ng

Shar

ehol

d- i

ng b

y O

ther

N

omin

ee

Expe

rienc

e &

Ed

ucat

ion

Oth

er P

ositi

on

Oth

er M

anag

ers,

Dire

ctor

s or S

uper

viso

rs

Rel

ated

by

Mar

riage

or

With

in S

econ

d-de

gree

ki

nshi

p of

Eac

h O

ther

Shar

es

Sh

ares

Shar

es

Sh

are

s

Title

N

ame

Rel

a-

tion

Dep

artm

ent o

f Risk

M

anag

emen

t and

In

sura

nce,

Geo

rgia

St

ate

Uni

vers

ity,

USA

MB

A, N

atio

nal

Taiw

an U

nive

rsity

Mas

ter d

egre

e of

In

sura

nce,

Fen

g C

hia

Uni

vers

ity

Inde

pend

ent

Dire

ctor

R

epub

lic o

f C

hina

C

hou,

Yu-

Che

ng

M

2014

. 06

.11

3 Ye

ars

2014

.06.

11

0 0

0 0

0 0

0 0

Partn

er,

Pric

ewat

erho

useC

oo-p

ers

Mas

ter o

f A

ccou

ntin

g,

Uni

vers

ity o

f A

laba

ma

Vic

e Pr

esid

ent,

Yua

nta

Futu

res C

o.,

Ltd.

- -

-

24


1. Major Shareholders of Institutional Shareholders

April 2, 2017

Name of Institutional Shareholders

Major Shareholders of the Institutional Shareholders

Name Percentage (%)

Evergreen International Corp.

Chang Yung-Fa Foundation 28.86%

Chang, Kuo-Cheng 16.67%

Chang, Kuo-Hua 12.90%

Chang, Kuo-Ming 12.19%

Lee, Yu-Mei 7.14%

Chen, Hui-Chu 5.81%

Yang, Mei-Chen 5.10%

Chang Yung-Fa Charity Foundation 5.00%

Chang, Yung-Fa 5.00%

Tseng, Chiung-Hui 1.33%

Ministry of Finance, R.O.C. Government NA

2. If the shareholders of above-mentioned table are corporation, the principal shareholders of

these corporations are as follows:

April 2, 2017

Legal Entity Name of Institutional

Shareholders

Major Shareholders of the Institutional Shareholders

Name Percentage (%)

Evergreen International Corp.

Chang Yung-Fa Foundation

Non-profit organization NA Chang Yung-Fa Charity Foundation


3. Professional qualifications and independence analysis of directors

April 2, 2017

Criteria Name

Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work

Experience Independence Criteria(Note)

Number of Other Public Companies

in Which the Individual is Concurrently Serving as an Independent

Director

An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting, or Other Academic Department Related to the Business Needs of the Company in a Public or Private Junior College, College or University

A Judge, Public Prosecutor, Attorney, Certified Public Accountant, or Other Professional or Technical Specialist Who has Passed a National Examination and been Awarded a Certificate in a Profession Necessary for the Business of the Company

Have Work Experience in the Areas of Commerce, Law, Finance, or Accounting, or Otherwise Necessary for the Business of the Company

1 2 3 4 5 6 7 8 9 10

Yang, Cheng-Tui � � � � � � � � � � 0

Chang, Kuo-Cheng � � � � � � 0

Yau, Sea-Wain � � � � � � � � � � � � � 0

Tsen, Ron-Syou � � � � � � � � � � � � 0

Chou, Yu-Cheng � � � � � � � � � � � � � 0

Lee, Yi-Fen � � � � � � � � � 0

Chen, Kuan-Pao � � � � � � � � � 0

Tai, Jiin-Chyuan � � � � � 0

Ku Lai, Mei-Hsueh � � � � � � 0

Note: Please tick the corresponding boxes if directors or supervisors have been any of the following during the two years prior to being elected or during the term of office.

1. Not an employee of the Company or any of its affiliates. 2. Not a director or supervisor of the Company or any of its affiliates. Not applicable in cases where the person is an

independent director of the Company, its parent company, or any subsidiary as appointed in accordance with the Act or with the laws of the country of the parent or subsidiary.

3. Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings.

4. Not a spouse, relative within the second degree of kinship, or lineal relative within the fifth degree of kinship, of any of the persons in the preceding three subparagraphs.

5. Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of outstanding shares of the Company or that holds shares ranking in the top five in holdings.

6. Not a director, supervisor, officer, or shareholder holding 5% or more of the share, of a specified company or institution that has a financial or business relationship with the Company.

7. Not a professional individual who is an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that provides commercial, legal, financial, accounting services or consultation to the Company or to any affiliate of the Company, or a spouse thereof. These restrictions do not apply to any member of the remuneration committee who exercises powers pursuant to Article 7 of the “Regulations Governing the Establishment and Exercise of Powers of Remuneration Committees of Companies whose Stock is Listed on the TWSE or Traded on the TPEx“.

8. Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company. 9. Not been a person of any conditions defined in Article 30 of the Company Law. 10. Not a governmental, juridical person or its representative as defined in Article 27 of the Company Law.

(II)

In

form

atio

n on

Man

agem

ent T

eam

Apr

il 2,

201

7

Title

N

atio

nalit

y N

ame

Gen

der

Dat

e of

A

cces

sion

Shar

ehol

ding

Sp

ouse

&

Dep

ende

nts

Shar

ehol

ding

Shar

ehol

ding

by

Oth

er

Nom

inee

Pr

inci

pal W

ork

Expe

rienc

e an

d A

cade

mic

Qua

lific

atio

ns

Cur

rent

Po

sitio

n(s)

in

Oth

er C

ompa

nies

Spou

se o

r Rel

ativ

es

with

in th

e Se

cond

D

egre

e H

oldi

ng

Posi

tion

as M

anag

er

Shar

es

%

Shar

es

%

Shar

es

%

Title

N

ame

Rel

atio

n-sh

ip

Pres

iden

t R

epub

lic o

f C

hina

Ju

ang,

C

hong

-Tsa

ng

M

2006

.08.

07

0 0

0 0

0 0

1.

Exec

utiv

e V

ice

Pres

iden

t, R

isk

Man

agem

ent D

ivis

ion

of E

verg

reen

In

tern

atio

nal C

orp.

2.

B

.B.A

. in

Mar

itim

e Sc

ienc

e an

d M

anag

emen

t, N

atio

nal T

aiw

an

Oce

an U

nive

rsity

Non

e N

one

Exec

utiv

e V

ice

Pres

iden

t

Rep

ublic

of

Chi

na

Tsai

, Bai

-Lon

g M

20

12.0

7.25

0

0 0

0 0

0

1.

Seni

or V

ice

Pres

iden

t, R

isk

Man

agem

ent D

ivis

ion

of E

verg

reen

In

tern

atio

nal C

orp.

2.

B

.S. i

n M

ariti

me

Scie

nce,

Nat

iona

l Ta

iwan

Oce

an U

nive

rsity

Non

e N

one

Chi

ef

Aud

itor

Rep

ublic

of

Chi

na

Lin,

Che

ng-Y

en

M

2016

.07.

01

227

0.00

0

0 0

0

1.

Seni

or V

ice

Pres

iden

t, R

isk

Man

agem

ent D

epar

tmen

t of

Cen

tral R

e

2.

M.S

. in

Chem

ical

Eng

inee

ring,

N

atio

nal C

heng

Kun

g U

nive

rsity

Non

e N

one

Exec

utiv

e V

ice

Pres

iden

t

Rep

ublic

of

Chi

na

Che

ng, C

hing

-Fen

F

2006

.01.

01

33,7

36

0.01

0

0 0

0

1.

Juni

or V

ice

Pres

iden

t, Fi

nanc

e D

ivis

ion

of E

verg

reen

Inte

rnat

iona

l C

orp.

2.

M

.B.A

., C

hung

Hua

Uni

vers

ity

Non

e N

one

Seni

or V

ice

Pres

iden

t R

epub

lic o

f C

hina

C

hang

, Yun

g-N

ing

F 20

11.0

1.01

0

0 0

0 0

0

1.

Juni

or V

ice

Pres

iden

t, C

ompu

ter

Div

isio

n of

Eve

rgre

en In

tern

atio

nal

Cor

p.

2.

B.B

.A, N

atio

nal T

aiw

an U

nive

rsity

Non

e N

one

Appo

inted

A

ctua

ry

(SV

P)

Rep

ublic

of

Chi

na

Lin,

Yu-

Te

M

2016

.01.

01

0 0

0 0

0 0

1.

Dep

uty

Seni

or V

ice

Pres

iden

t, Pr

ojec

t Div

isio

n of

Cen

tral R

e

2.

M.B

.A. i

n A

ctua

rial S

cien

ce, F

eng

Chi

a U

nive

rsity

Non

e N

one

27

A

pril

2, 2

017

Title

N

atio

nalit

y N

ame

Gen

der

Dat

e of

A

cces

sion

Shar

ehol

ding

Sp

ouse

&

Dep

ende

nts

Shar

ehol

ding

Shar

ehol

ding

by

Oth

er

Nom

inee

Pr

inci

pal W

ork

Expe

rienc

e an

d A

cade

mic

Qua

lific

atio

ns

Cur

rent

Po

sitio

n(s)

in

Oth

er C

ompa

nies

Spou

se o

r Rel

ativ

es

with

in th

e Se

cond

D

egre

e H

oldi

ng

Posi

tion

as M

anag

er

Shar

es

%

Shar

es

%

Shar

es

%

Title

N

ame

Rel

atio

n-sh

ip

Seni

or V

ice

Pres

iden

t R

epub

lic o

f C

hina

C

hung

, Chi

h-H

ung

M

2015

.04.

01

51,0

00

0.01

0

0 0

0 1.

Se

nior

Vic

e Pr

esid

ent,

Proj

ect

Div

isio

n of

Cen

tral R

e 2.

M

.B.A

., N

atio

nal T

aipe

i Uni

vers

ity

Non

e N

one

Dep

uty

Seni

or V

ice

Pres

iden

t

Rep

ublic

of

Chi

na

Hsu

, Tzu

-Che

ng

M

2014

.06.

16

5,00

0 0.

00

0 0

0 0

1.

Juni

or V

ice

Pres

iden

t, Pe

rson

nel

Div

isio

n of

Eve

rgre

en In

tern

atio

nal

Cor

p.

2.

B.L

., N

atio

nal C

hung

Hsi

ng

Uni

vers

ity

Non

e N

one

Dep

uty

Seni

or V

ice

Pres

iden

t

Rep

ublic

of

Chi

na

Hsi

ung,

Pei

-Chi

ng

F 20

08.0

1.01

0

0 0

0 0

0 1.

Ju

nior

Vic

e Pr

esid

ent,

Inve

stm

ent

Dep

artm

ent o

f Cen

tral R

e 2.

B

.B.A

, Nat

iona

l Tai

wan

Uni

vers

ity

Non

e N

one

Dep

uty

Seni

or V

ice

Pres

iden

t

Rep

ublic

of

Chi

na

Ting

, Wen

-Che

ng

M

2013

.01.

01

288,

809

0.05

0

0 0

0

1.

Juni

or V

ice

Pres

iden

t, Le

gal &

C

laim

Dep

artm

ent o

f Cen

tral R

e 2.

M

.B.A

., C

olle

ge o

f Ins

uran

ce, N

ew

York

City

, U.S

.A.

Non

e N

one

Dep

uty

Seni

or V

ice

Pres

iden

t

Rep

ublic

of

Chi

na

Liu,

Yu-

Hsu

eh

F 20

12.0

1.01

0

0 0

0 0

0

1.

Juni

or V

ice P

resi

dent

, Life

& H

ealth

D

epar

tmen

t of C

entra

l Re

2.

B.B

.A. i

n St

atis

tics,

Nat

iona

l C

heng

chi U

nive

rsity

Non

e N

one

Dep

uty

Juni

or V

ice

Pres

iden

t (P

rinci

pal

Acc

ount

ing

Offi

cer)

Rep

ublic

of

Chi

na

Yeh,

Shi

h-H

suan

F

2016

.04.

01

0 0

0 0

0 0

1.

Man

ager

, Acc

ount

ing

Dep

artm

ent

of C

entra

l Re

2.

B.B

.A, F

u Je

n C

atho

lic U

nive

rsity

N

one

Non

e

28


C. Implementation of Corporate Governance

(I) The Composition and Operations of the Board of Directors

1. The Board of Directors consists of nine directors (three independent directors

are included).

2. The Board Meetings were convened eight (A) times in 2016. The directors’ attendance status is as follows:

Title Name Attendance in Person

(B)

By Proxy

Attendance Rate in

Person (%)B/A

Remarks

Chairman Evergreen International Corp. Representative : Yang, Cheng-Tui

8 0 100% None

Vice Chairman

Evergreen International Corp. Representative : Chang, Kuo-Cheng

5 3 62.5% None

Independent Director Yau, Sea-Wain 8 0 100% None

Independent Director Tsen, Ron-Syou 8 0 100% None

Independent Director Chou, Yu-Cheng 8 0 100% None

Director Ministry of Finance, R.O.C. Representative: Lee, Yi-Fen

8 0 100% None

Director Ministry of Finance, R.O.C. Representative: Chen, Kuan-Pao

8 0 100% None

Director Evergreen International Corp. Representative: Tai, Jiin-Chyuan

5 3 62.5% None

Director Evergreen International Corp. Representative: Ku Lai, Mei-Hsueh

8 0 100% None


(II) The Composition and Operations of the Audit Committee

1. The Audit Committee consists of all of the independent directors of the

Company. Six (A) regular meetings were convened in 2016.

2. The members’ attendance status is as follows.

Title Name Attendance in Person (B) By Proxy

Attendance Rate (%)

B/A Remark

Independent Director Yau, Sea-Wain 6 0 100 % None

Independent Director Tsen, Ron-Syou 6 0 100 % None

Independent Director Chou, Yu-Cheng 6 0 100 % None


(III

) C

orpo

rate

Gov

erna

nce

Exec

utio

n St

atus

and

Dev

iatio

ns fr

om th

e “C

orpo

rate

Gov

erna

nce

Bes

t-Pra

ctic

e Pr

inci

ples

fo

r TW

SE/G

TSM

Lis

ted

Com

pani

es”

Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

1

Dev

iatio

ns fr

om “

the

Cor

pora

te G

over

nanc

e B

est-P

ract

ice

Prin

cipl

es fo

r TW

SE/T

PEx

List

ed

Com

pani

es”

and

Rea

sons

Yes

No

Brie

f Exp

lana

tion

1. D

oes t

he c

ompa

ny e

stab

lish

and

disc

lose

the

Cor

pora

te G

over

nanc

e B

est-P

ract

ice

Prin

cipl

es

base

d on

“C

orpo

rate

Gov

erna

nce

Best

-Pra

ctic

e Pr

inci

ples

for T

WSE

/TPE

x Li

sted

Com

pani

es”?

○

The

Com

pany

has

est

ablis

hed

the

Cor

pora

te G

over

nanc

e B

est-P

ract

ice

Prin

cipl

es b

ased

on

“Cor

pora

te G

over

nanc

e B

est-P

ract

ice

Prin

cipl

es

for

TWSE

/TPE

x Li

sted

C

ompa

nies

”.

The

info

rmat

ion

has

been

di

sclo

sed

on th

e C

ompa

ny’s

web

site

and

MO

PS.

Non

e

2.

Shar

ehol

ding

stru

ctur

e &

shar

ehol

ders

’ rig

hts

(1)

Doe

s th

e co

mpa

ny

esta

blis

h an

in

tern

al

oper

atin

g pr

oced

ure

to

deal

w

ith

shar

ehol

ders

’ su

gges

tions

, do

ubts

, di

sput

es

and

litig

atio

ns, a

nd im

plem

ent

base

d on

the

pr

oced

ure?

(2)

Doe

s th

e co

mpa

ny p

osse

ss t

he l

ist

of i

ts m

ajor

sha

reho

lder

s as

wel

l as

the

ulti

mat

e ow

ners

of t

hose

shar

es?

○ ○

(1

) Th

e de

dica

ted

unit

of

the

Com

pany

ha

ndle

s sto

ck

affa

irs

incl

udin

g le

gal

and

non-

lega

l is

sues

acc

ordi

ng t

o th

e ex

istin

g pr

oced

ure.

All

shar

ehol

ders

of

the

Com

pany

are

abl

e to

ask

for

ou

r sto

ck se

rvic

e vi

a th

e ho

tline

, em

ail o

r the

Com

pany

’s w

ebsi

te.

(2)

The

Com

pany

sub

mits

a m

onth

ly r

epor

t lis

ting

the

shar

ehol

ding

s of

di

rect

ors,

man

ager

s an

d m

ajor

sh

areh

olde

rs

(ove

r 10

%

shar

ehol

ding

s) t

o th

e au

thor

ities

acc

ordi

ng t

o A

rticl

e 25

of

Secu

ritie

s an

d Ex

chan

ge

Act

. M

oreo

ver,

the

Com

pany

al

so

disc

lose

s th

e la

test

sha

reho

ldin

gs o

f maj

or s

hare

hold

ers

(ove

r 5%

Non

e

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

1

Dev

iatio

ns fr

om “

the

Cor

pora

te G

over

nanc

e B

est-P

ract

ice

Prin

cipl

es fo

r TW

SE/T

PEx

List

ed

Com

pani

es”

and

Rea

sons

Yes

No

Brie

f Exp

lana

tion

(3)

Doe

s the

com

pany

est

ablis

h an

d ex

ecut

e th

e ris

k m

anag

emen

t and

fire

wal

l sys

tem

w

ithin

its c

ongl

omer

ate

stru

ctur

e?

(4)

Doe

s the

com

pany

est

ablis

h in

tern

al ru

les

agai

nst i

nsid

ers t

radi

ng w

ith u

ndis

clos

ed

info

rmat

ion?

○ ○

shar

ehol

ding

s) a

nd t

he t

op t

en s

hare

hold

ers

on t

he C

ompa

ny’s

an

nual

repo

rt.

(3)

Rul

es a

re m

ade

to s

trict

ly r

egul

ate

the

activ

ities

of

tradi

ng,

endo

rsem

ent a

nd lo

ans b

etw

een

the

Com

pany

and

its a

ffilia

tes.

(4)

To p

rote

ct s

hare

hold

ers’

right

s an

d fa

irly

treat

sha

reho

lder

s, th

e C

ompa

ny h

as e

stab

lishe

d th

e in

tern

al r

ules

to

forb

id i

nsid

ers

tradi

ng

on

undi

sclo

sed

info

rmat

ion.

The

C

ompa

ny

has

also

st

rong

ly a

dvoc

ated

thes

e ru

les i

n or

der t

o pr

even

t any

vio

latio

ns.

Non

e

Non

e

3. C

ompo

sitio

n an

d R

espo

nsib

ilitie

s of t

he B

oard

of

Dire

ctor

s

(1)

Doe

s th

e B

oard

dev

elop

and

im

plem

ent

a di

vers

ified

pol

icy

for t

he c

ompo

sitio

n of

its

mem

bers

?

○

(1

) In

acc

orda

nce

with

par

agra

ph 3

of

Arti

cle

22 o

f “C

orpo

rate

G

over

nanc

e B

est

Prac

tice

Prin

cipl

es”

of

the

Com

pany

, di

vers

ifica

tion

of

the

Boar

d m

embe

rs

shal

l be

ta

ken

into

co

nsid

erat

ion.

Acc

ordi

ng to

par

agra

ph 4

of

the

sam

e A

rticl

e, a

ll m

embe

rs o

f th

e B

oard

sha

ll ha

ve t

he p

rofe

ssio

nal

know

ledg

e,

skill

s, an

d ex

perie

nce

nece

ssar

y to

per

form

thei

r dut

ies.

The

Skill

M

atrix

of t

he B

oard

mem

bers

is a

s fol

low

s:

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

1

Dev

iatio

ns fr

om “

the

Cor

pora

te G

over

nanc

e B

est-P

ract

ice

Prin

cipl

es fo

r TW

SE/T

PEx

List

ed

Com

pani

es”

and

Rea

sons

Yes

No

Brie

f Exp

lana

tion

(2)

Doe

s th

e co

mpa

ny

volu

ntar

ily

esta

blis

h ot

her

func

tiona

l co

mm

ittee

s in

add

ition

to

the

Rem

uner

atio

n C

omm

ittee

and

the

Aud

it C

omm

ittee

?

(3)

Doe

s th

e co

mpa

ny e

stab

lish

a st

anda

rd t

o m

easu

re th

e pe

rfor

man

ce o

f the

Boa

rd, a

nd

○ ○

Title

Nam

e Ge

nder

Man

agem

ent I

nsur

ance

Fina

nce /

Ac

coun

ting

Risk

M

anag

emen

t La

w

Asse

t M

anag

emen

t

Chair

man

Ya

ng,

Chen

g-Tui

M

�

�

�

Vice

Ch

airm

an

Chan

g, Ku

o-Che

ng

M

�

Direc

tor

Tai,

Jiin-C

hyua

n M

�

�

Direc

tor

Ku La

i, M

ei-Hs

ueh

F �

�

Direc

tor

Lee, Y

i-Fen

F

�

�

Direc

tor

Chen

, Ku

an-P

ao

M

�

�

Indep

ende

nt Di

rector

Ya

u, Se

a-Wain

M

�

�

�

Indep

ende

nt Di

rector

Ts

en,

Ron-S

you

M

�

�

�

Indep

ende

nt Di

rector

Ch

ou,

Yu-C

heng

M

�

�

(2)

In

orde

r fo

r th

e so

und

supe

rvis

ion

and

rein

forc

emen

t of

m

anag

emen

t, th

e C

ompa

ny

esta

blis

hed

the

Ente

rpris

e Ri

sk

Man

agem

ent

Com

mitt

ee

in

addi

tion

to

the

Rem

uner

atio

n C

omm

ittee

an

d th

e A

udit

Com

mitt

ee.

Thes

e fu

nctio

nal

com

mitt

ees s

hall

be re

spon

sibl

e fo

r the

Boa

rd o

f Dire

ctor

s.

(3)

The

Com

pany

has

form

ulat

ed ru

les

and

proc

edur

es fo

r eva

luat

ing

the

Boa

rd’s

per

form

ance

and

con

duct

ed i

t. Th

e C

ompa

ny u

ses

Non

e

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

1

Dev

iatio

ns fr

om “

the

Cor

pora

te G

over

nanc

e B

est-P

ract

ice

Prin

cipl

es fo

r TW

SE/T

PEx

List

ed

Com

pani

es”

and

Rea

sons

Yes

No

Brie

f Exp

lana

tion

impl

emen

t it a

nnua

lly?

(4)

Doe

s th

e co

mpa

ny r

egul

arly

eva

luat

e th

e in

depe

nden

ce o

f CPA

s?

○

two

met

hods

to e

valu

ate

the

perf

orm

ance

of t

he B

oard

. a.

Self-

asse

ssm

ent o

f Boa

rd m

embe

rs:

Boa

rd m

embe

rs f

ill i

n th

e "S

elf- A

sses

smen

t Q

uest

ionn

aire

for

B

oard

Mem

bers

" at t

he e

nd o

f eac

h ye

ar.

b. A

sses

smen

t of t

he B

oard

: Th

e de

dica

ted

unit

of th

e C

ompa

ny c

ondu

cts

the

asse

ssm

ent o

f th

e B

oard

’s p

erfo

rman

ce a

t the

end

of e

ach

year

.

(4)

The

Com

pany

ass

esse

s th

e pr

ofes

sion

al s

ervi

ce p

erfo

rmed

and

in

depe

nden

ce o

f CP

As

annu

ally

, and

CPA

s, in

the

mea

ntim

e, a

re

issu

e a

decl

arat

ion

of in

depe

nden

ce f

or a

uditi

ng o

f th

e fin

anci

al

stat

emen

ts.

The

enga

gem

ent,

rem

uner

atio

n an

d in

depe

nden

ce

asse

ss o

f C

PAs

for

finan

cial

sta

tem

ents

aud

iting

and

cor

pora

te

inco

me

tax

retu

rn c

ompl

ianc

e in

201

7 ha

s be

en a

ppro

ved

by th

e B

oard

of D

irect

ors o

n M

arch

22,

201

7.

The

CPA

s ap

poin

ted

by th

e C

ompa

ny a

re in

com

plia

nce

with

the

Com

pany

's in

depe

nden

t eva

luat

ion

stan

dard

s an

d ar

e el

igib

le f

or

audi

ting

the

Com

pany

.

Non

e

4. D

oes

the

com

pany

se

t up

a

corp

orat

e go

vern

ance

un

it or

ap

poin

t pe

rson

nel

resp

onsi

ble

for

corp

orat

e go

vern

ance

mat

ters

(in

clud

ing

but

not

limite

d to

pr

ovid

ing

○ Th

e Su

perv

isor

y D

ivis

ion

is in

cha

rge

of c

orpo

rate

gov

erna

nce

affa

irs,

and

the

finan

cial

off

icer

is in

cha

rge

of s

uper

visi

on. T

he m

ain

duty

are

as

follo

ws:

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

1

Dev

iatio

ns fr

om “

the

Cor

pora

te G

over

nanc

e B

est-P

ract

ice

Prin

cipl

es fo

r TW

SE/T

PEx

List

ed

Com

pani

es”

and

Rea

sons

Yes

No

Brie

f Exp

lana

tion

info

rmat

ion

for

dire

ctor

s an

d su

perv

isor

s to

pe

rfor

m t

heir

func

tions

, ha

ndlin

g w

ork

rela

ted

to m

eetin

gs o

f th

e B

oard

of

Dire

ctor

s an

d th

e sh

areh

olde

rs'

mee

tings

, fil

ing

com

pany

re

gist

ratio

n an

d ch

ange

s to

co

mpa

ny

regi

stra

tion,

and

pro

duci

ng m

inut

es o

f bo

ard

mee

tings

and

shar

ehol

ders

’ mee

tings

)?

(1)T

o pr

oduc

e ag

enda

of

Boa

rd M

eetin

g an

d pr

ovid

e m

eetin

g no

tice

with

suf

ficie

nt m

eetin

g m

ater

ial

to e

ach

dire

ctor

no

late

r th

an 7

da

ys p

rior

to t

he B

oard

Mee

ting

date

. T

o re

min

d di

rect

or t

o re

cuse

him

self

or h

erse

lf fro

m th

e di

scus

sion

and

vot

ing

whe

n th

e di

rect

or h

as p

erso

nal i

nter

est i

n th

e pr

opos

al. T

o pr

ovid

e m

inut

es to

di

rect

ors

with

in 2

0 da

ys a

fter

the

mee

ting

and

publ

ic a

nnou

nce

acco

rdin

g to

the

regu

latio

ns.

(2)T

o re

gist

er t

he d

ate

of S

hare

hold

ers’

Mee

ting,

pro

duce

mee

ting

notic

e, m

eetin

g ha

ndbo

ok a

nd m

inut

es,

and

appl

y to

MO

EA f

or

regi

stra

tion

afte

r am

endm

ent

of “

Arti

cles

of

Inco

rpor

atio

n” o

r el

ectio

n of

dire

ctor

s. (3

)To

Ass

ist

Cha

irman

in

th

e m

eetin

g (in

clud

ing

Shar

ehol

ders

’ M

eetin

g, B

oard

Mee

ting,

mee

ting

of R

emun

erat

ion

Com

mitt

ee a

nd

Aud

it C

omm

ittee

), in

clud

ing

expl

anat

ion

of r

egul

atio

ns r

elat

ed t

o pr

opos

al c

onte

nt a

nd p

roce

dure

s for

the

mee

ting.

5. D

oes

the

com

pany

est

ablis

h a

com

mun

icat

ion

chan

nel

and

build

a d

esig

nate

d se

ctio

n on

its

w

ebsi

te

for

stak

ehol

ders

(in

clud

ing

but

not

limite

d to

sha

reho

lder

s, em

ploy

ees,

cust

omer

s, an

d su

pplie

rs),

as w

ell

as h

andl

e al

l th

e is

sues

th

ey

care

fo

r in

te

rms

of

corp

orat

e so

cial

re

spon

sibi

litie

s?

○ Th

e C

ompa

ny

prov

ides

de

taile

d co

ntac

t in

form

atio

n,

incl

udin

g te

leph

one

num

bers

and

em

ail

addr

esse

s in

the

“St

akeh

olde

r A

rea”

se

ctio

n of

the

corp

orat

e w

ebsi

te. I

n ad

ditio

n, p

erso

nnel

are

in p

lace

to

excl

usiv

ely

deal

with

iss

ues

of s

ocia

l re

spon

sibi

lity,

ens

urin

g th

at

vario

us i

nter

este

d pa

rties

hav

e ch

anne

ls t

o co

mm

unic

ate

with

the

C

ompa

ny.

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

1

Dev

iatio

ns fr

om “

the

Cor

pora

te G

over

nanc

e B

est-P

ract

ice

Prin

cipl

es fo

r TW

SE/T

PEx

List

ed

Com

pani

es”

and

Rea

sons

Yes

No

Brie

f Exp

lana

tion

6. D

oes

the

com

pany

ap

poin

t a

prof

essi

onal

sh

areh

olde

r se

rvic

e ag

ency

to

de

al

with

sh

areh

olde

r affa

irs?

○

The

Com

pany

doe

s no

t as

sign

any

age

ncy

to b

e in

cha

rge

of i

ts

shar

ehol

der’s

mee

tings

. W

here

as

stoc

k de

partm

ent i

s m

anag

ed

by th

e C

ompa

ny it

self,

th

e Sh

areh

olde

rs’

Mee

ting

is c

ondu

cted

fo

llow

ing

gove

rnm

ent

regu

latio

n an

d co

rpor

ate

guid

elin

e to

en

sure

its

law

fuln

ess,

effe

ctiv

enes

s an

d sa

fene

ss.

7. I

nfor

mat

ion

Dis

clos

ure

(1)

Doe

s th

e co

mpa

ny

have

a

corp

orat

e w

ebsi

te to

dis

clos

e bo

th fi

nanc

ial s

tand

ings

an

d th

e st

atus

of c

orpo

rate

gov

erna

nce?

(2)

Doe

s th

e co

mpa

ny h

ave

othe

r in

form

atio

n di

sclo

sure

ch

anne

ls

(e.g

. bu

ildin

g an

En

glis

h w

ebsi

te,

appo

intin

g de

sign

ated

pe

ople

to h

andl

e in

form

atio

n co

llect

ion

and

○ ○

(1

) Th

e C

ompa

ny h

as se

t up

a C

hine

se/E

nglis

h w

ebsi

te

(http

://w

ww.

cent

ralre

.com

) to

disc

lose

info

rmat

ion

rega

rdin

g th

e C

ompa

ny’s

fina

ncia

ls, b

usin

ess a

nd c

orpo

rate

gov

erna

nce

stat

us.

(2)

The

Com

pany

ha

s as

sign

ed

appr

opria

te

pers

ons

to

hand

le

info

rmat

ion

colle

ctio

n an

d di

sclo

sure

. Th

e C

ompa

ny

has

esta

blis

hed

a sp

okes

man

sys

tem

. The

Com

pany

will

hol

d or

join

in

one

inve

stor

con

fere

nce

in th

e ye

ar 2

017.

Non

e

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

1

Dev

iatio

ns fr

om “

the

Cor

pora

te G

over

nanc

e B

est-P

ract

ice

Prin

cipl

es fo

r TW

SE/T

PEx

List

ed

Com

pani

es”

and

Rea

sons

Yes

No

Brie

f Exp

lana

tion

disc

losu

re,

crea

ting

a sp

okes

man

sys

tem

, w

ebca

stin

g in

vest

or c

onfe

renc

es)?

8. I

s th

ere

any

othe

r im

porta

nt i

nfor

mat

ion

to

faci

litat

e a

bette

r un

ders

tand

ing

of

the

com

pany

’s c

orpo

rate

gov

erna

nce

prac

tices

(e.g

., in

clud

ing

but

not

limite

d to

em

ploy

ee r

ight

s, em

ploy

ee w

elln

ess,

inve

stor

rel

atio

ns,

supp

lier

rela

tions

, rig

hts

of s

take

hold

ers,

dire

ctor

s’ an

d su

perv

isor

s’ tra

inin

g re

cord

s, th

e im

plem

enta

tion

of

risk

man

agem

ent

polic

ies

and

risk

eval

uatio

n m

easu

res,

the

impl

emen

tatio

n of

cus

tom

er r

elat

ions

pol

icie

s, an

d pu

rcha

sing

in

sura

nce

for

dire

ctor

s an

d su

perv

isor

s)?

○

Pl

ease

refe

r to

the

deta

ils a

s fol

low

s: N

one


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

1

Dev

iatio

ns fr

om “

the

Cor

pora

te G

over

nanc

e B

est-P

ract

ice

Prin

cipl

es fo

r TW

SE/T

PEx

List

ed

Com

pani

es”

and

Rea

sons

Yes

No

Brie

f Exp

lana

tion

(1)

Stat

us o

f em

ploy

ee ri

ghts

and

em

ploy

ee w

elln

ess:

Th

e C

ompa

ny h

as e

stab

lishe

d pe

rson

nel p

olic

ies

(for

exa

mpl

e, w

ork

rule

s) a

nd h

as o

rgan

ized

the

Empl

oyee

Wel

fare

Com

mitt

ee a

nd L

abor

Pen

sion

Fun

d M

onito

ring

Com

mitt

ee a

ccor

ding

to th

e re

gula

tions

. The

Com

pany

has

als

o pr

ovid

ed a

ded

icat

ed w

eb-p

age

on th

e C

ompa

ny's

web

site

ena

blin

g in

tere

sted

pa

rties

and

inve

stor

s to

cons

ult o

r file

com

plai

nts.

In a

dditi

on, i

nsur

ance

bus

ines

s uni

t has

its r

espe

ctiv

e cu

stom

er se

rvic

e te

am b

y th

e lin

e-of

-bus

ines

s.

(2)

Exec

utio

n of

risk

man

agem

ent p

olic

ies a

nd ri

sk m

easu

rem

ent c

riter

ia:

The

Com

pany

has

est

ablis

hed

a R

isk

Man

agem

ent

Com

mitt

ee u

nder

the

boa

rd o

f di

rect

ors.

The

com

mitt

ee i

s co

mpo

sed

of i

ndep

ende

nt d

irect

ors,

the

pres

iden

t and

the

sen

ior

man

ager

of

each

bus

ines

s un

it. T

he c

omm

ittee

mee

ting

is c

onve

ned

by t

he in

depe

nden

t dire

ctor

(s).

Ther

e w

ere

six

com

mitt

ee

mee

tings

in 2

016.

As

requ

ired

by la

w, th

e m

eetin

g m

inut

es h

ave

been

sub

mitt

ed to

the

boar

d of

dire

ctor

s fo

r rep

ortin

g. In

add

ition

to th

e "O

rgan

izat

iona

l R

egul

atio

ns f

or t

he R

isk

Man

agem

ent

Com

mitt

ee",

the

Com

pany

has

als

o es

tabl

ishe

d va

rious

gui

delin

es f

or d

aily

ris

k m

anag

emen

t, in

clud

ing

Ris

k M

anag

emen

t Po

licie

s an

d Pr

oced

ural

Gui

delin

es,

Risk

Man

agem

ent

Ope

ratio

nal

Proc

edur

es,

Ris

k M

anag

emen

t M

echa

nism

s, an

d O

wn

Ris

k an

d So

lven

cy A

sses

smen

t (O

RSA

) Mec

hani

sms.

The

Com

pany

has

, in

the

mea

ntim

e, e

stab

lishe

d va

rious

lim

its in

clud

ing

risk

appe

tite,

risk

tole

ranc

e le

vel,

etc.

, ai

min

g to

stre

ngth

en i

ts c

apita

l m

anag

emen

t, m

aint

ain

soun

d so

lven

cy c

apab

ility

and

ens

ure

good

con

trol

of t

he m

ajor

ris

ks w

hich

are

rea

sona

bly

pred

icta

ble.

(3)

The

Com

pany

has

pur

chas

ed D

&O

insu

ranc

e fo

r its

dire

ctor

s and

man

ager

s sin

ce y

ear 2

015

and

rene

wal

yea

r 201

7.

(4)

Dire

ctor

s’ tr

aini

ng re

cord

s in

the

year

of 2

016

and

2017

:

Title

N

ame

Trai

ning

ho

urs

Stud

y D

ate

Spon

sorin

g O

rgan

izat

ion

Cou

rse

Cha

irman

Ya

ng, C

ehng

-Tui

3H

20

16/1

0/11

Ta

iwan

Cor

pora

te G

over

nanc

e A

ssoc

iatio

n A

naly

zatio

n of

Ent

erpr

ise

treat

men

t–Fo

cusi

ng o

n La

test

Lab

or

Man

agem

ent D

ispu

te

3H

2016

/11/

23

Taiw

an C

orpo

rate

Gov

erna

nce

Ass

ocia

tion

Frau

d R

isk

Gov

erna

nce–

Rec

ogni

tion

of R

isk

Man

agem

ent o

f Fr

aud


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

1

Dev

iatio

ns fr

om “

the

Cor

pora

te G

over

nanc

e B

est-P

ract

ice

Prin

cipl

es fo

r TW

SE/T

PEx

List

ed

Com

pani

es”

and

Rea

sons

Yes

No

Brie

f Exp

lana

tion

Title

N

ame

Trai

ning

ho

urs

Stud

y D

ate

Spon

sorin

g O

rgan

izat

ion

Cou

rse

Vic

e C

hairm

an

Cha

ng,

Kuo

-Che

ng

3H

2016

/10/

11

Taiw

an C

orpo

rate

Gov

erna

nce

Ass

ocia

tion

Ana

lyza

tion

of E

nter

pris

e tre

atm

ent–

Focu

sing

on

Late

st L

abor

M

anag

emen

t Dis

pute

Inde

pend

ent

Dire

ctor

Ya

u, S

ea-W

ain

3H

2016

/10/

11

Taiw

an C

orpo

rate

Gov

erna

nce

Ass

ocia

tion

Ana

lyza

tion

of E

nter

pris

e tre

atm

ent–

Focu

sing

on

Late

st L

abor

M

anag

emen

t Dis

pute

3H

2016

/10/

13

Wbc

sd G

loba

l Net

wor

k Pa

rtner

Th

e Tr

end

of L

ow C

arbo

n D

evel

opm

ent a

fter P

aris

Agr

eem

ent,

Taip

ei S

essi

on

3H

2016

/11/

23

Taiw

an C

orpo

rate

Gov

erna

nce

Ass

ocia

tion

Frau

d R

isk

Gov

erna

nce–

Rec

ogni

tion

of R

isk

Man

agem

ent o

f Fr

aud

Inde

pend

ent

Dire

ctor

Ts

en, R

on-S

you

3H

2016

/3/1

5 Ta

iwan

Cor

pora

te G

over

nanc

e A

ssoc

iatio

n H

ow to

Pro

tect

Tra

de–S

ecre

t and

Pre

vent

Fra

ud to

Stre

ngth

en

Cor

pora

te G

over

nanc

e

3H

2016

/7/2

2 Ta

iwan

Cor

pora

te G

over

nanc

e A

ssoc

iatio

n Ef

fect

iven

ess o

f Ind

epen

dent

Dire

ctor

s

3H

2016

/7/2

9 Ta

iwan

Cor

pora

te G

over

nanc

e A

ssoc

iatio

n Th

e Pr

actic

e of

Inde

pend

ent D

irect

ors a

nd F

unct

iona

l C

omm

ittee

s

3H

2016

/10/

11

Taiw

an C

orpo

rate

Gov

erna

nce

Ass

ocia

tion

Ana

lyza

tion

of E

nter

pris

e tre

atm

ent–

Focu

sing

on

Late

st L

abor

M

anag

emen

t Dis

pute

3H

2016

/11/

23

Taiw

an C

orpo

rate

Gov

erna

nce

Ass

ocia

tion

Frau

d R

isk

Gov

erna

nce–

Rec

ogni

tion

of R

isk

Man

agem

ent o

f Fr

aud

3H

2017

/3/2

4 Ta

iwan

Cor

pora

te G

over

nanc

e A

ssoc

iatio

n A

naly

zatio

n of

Glo

bal–

Ris

k Tr

end

and

Opp

ortu

nity

3H

2017

/3/3

1 Ta

iwan

Cor

pora

te G

over

nanc

e A

ssoc

iatio

n Th

e In

tern

atio

nal T

rend

of L

ong-

term

Enc

oura

gem

ent a

nd

Des

ign

of B

onus

Sys

tem

for D

irect

ors a

nd S

enio

r Offi

cers


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

1

Dev

iatio

ns fr

om “

the

Cor

pora

te G

over

nanc

e B

est-P

ract

ice

Prin

cipl

es fo

r TW

SE/T

PEx

List

ed

Com

pani

es”

and

Rea

sons

Yes

No

Brie

f Exp

lana

tion

Title

N

ame

Trai

ning

ho

urs

Stud

y D

ate

Spon

sorin

g O

rgan

izat

ion

Cou

rse

Inde

pend

ent

Dire

ctor

C

hou,

Yu-

Che

ng

3H

2016

/1/1

3 Ta

iwan

Sec

uriti

es A

ssoc

iatio

n Th

e In

trodu

ctio

n of

the

New

est T

ax L

aw a

nd R

egul

atio

n

3H

2016

/1/2

6 Se

curit

ies a

nd F

utur

es In

stitu

te

2016

Cor

pora

te G

over

nanc

e Fo

rum

– In

side

r Tra

ding

and

C

orpo

rate

Soc

ial R

espo

nsib

ility

3H

2016

/3/1

6 Ta

iwan

Sec

uriti

es A

ssoc

iatio

n D

igita

l Fin

ance

– C

halle

nges

, Opp

ortu

nitie

s and

Cor

pora

te

Gov

erna

nce

3H

2016

/6/1

5 Ta

iwan

Sec

uriti

es A

ssoc

iatio

n Le

gal L

iabi

lity

and

Cas

e Ana

lysi

s of T

rade

Sec

rets

Act

3H

2016

/7/2

1 Ta

iwan

Sec

uriti

es A

ssoc

iatio

n A

pply

fo

r Se

curit

ies

Trad

ing

on

the

Stoc

k Ex

chan

ge

or

Ove

r-the

-Cou

nter

Mar

ket

(OTC

) Li

stin

g an

d C

orpo

rate

Soc

ial

Res

pons

ibili

ty

3H

2016

/10/

11

Taiw

an C

orpo

rate

Gov

erna

nce

Ass

ocia

tion

Ana

lyza

tion

of E

nter

pris

e tre

atm

ent–

Focu

sing

on

Late

st L

abor

M

anag

emen

t Dis

pute

3H

2016

/11/

23

Taiw

an C

orpo

rate

Gov

erna

nce

Ass

ocia

tion

Frau

d R

isk

Gov

erna

nce–

Rec

ogni

tion

of R

isk

Man

agem

ent o

f Fr

aud

Dire

ctor

Le

e, Y

i-Fen

12H

20

16/4

/28&

20

16/4

/29

The

Inst

itute

of I

nter

nal

Aud

itors

-Chi

nese

Tai

wan

20

16 S

emin

ar: I

nves

t you

rsel

f & In

nova

tion

of v

alue

3H

2016

/10/

6 Ta

iwan

Cor

pora

te G

over

nanc

e A

ssoc

iatio

n 20

16 C

orpo

rate

Gov

erna

nce

sum

mit

XII

3H

2016

/10/

13

Wbc

sd G

loba

l Net

wor

k Pa

rtner

Th

e Tr

end

of L

ow C

arbo

n D

evel

opm

ent a

fter P

aris

Agr

eem

ent,

Taip

ei S

essi

on

3H

2016

/10/

20

Fina

ncia

l Sup

ervi

sory

C

omm

issi

on R

.O.C

.(Tai

wan

) Th

e 11

th T

aipe

i Cor

pora

te G

over

nanc

e Fo

rum


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

1

Dev

iatio

ns fr

om “

the

Cor

pora

te G

over

nanc

e B

est-P

ract

ice

Prin

cipl

es fo

r TW

SE/T

PEx

List

ed

Com

pani

es”

and

Rea

sons

Yes

No

Brie

f Exp

lana

tion

Title

N

ame

Trai

ning

ho

urs

Stud

y D

ate

Spon

sorin

g O

rgan

izat

ion

Cou

rse

Dire

ctor

Le

e, Y

i-Fen

3H

20

16/1

1/23

Ta

iwan

Cor

pora

te G

over

nanc

e A

ssoc

iatio

n Fr

aud

Ris

k G

over

nanc

e-R

ecog

nitio

n of

Ris

k M

anag

emen

t of

Frau

d

Dire

ctor

C

hen,

Kua

n-Pa

o

3H

2016

/1/2

6 Se

curit

ies a

nd F

utur

es In

stitu

te

2016

Cor

pora

te G

over

nanc

e Fo

rum

– In

side

r Tra

ding

and

C

orpo

rate

Soc

ial R

espo

nsib

ility

3H

2016

/10/

11

Taiw

an C

orpo

rate

Gov

erna

nce

Ass

ocia

tion

Ana

lyza

tion

of E

nter

pris

e tre

atm

ent-F

ocus

ing

on L

ates

t Lab

or

Man

agem

ent D

ispu

te

3H

2016

/10/

13

Wbc

sd G

loba

l Net

wor

k Pa

rtner

Th

e Tr

end

of L

ow C

arbo

n D

evel

opm

ent a

fter P

aris

Agr

eem

ent,

Taip

ei S

essi

on

3H

2016

/10/

26

Trai

ning

Inst

itute

, Min

istry

of

Fina

nce,

R.O

.C.

The

Boa

rd M

eetin

g an

d In

tern

al A

udit

and

Inte

rnal

Con

trol

Syst

em

3H

2016

/11/

14

Trai

ning

Inst

itute

, Min

istry

of

Fina

nce,

R.O

.C.

Mon

ey L

aund

erin

g C

ontro

l Act

and

Cas

e Ana

lysi

s I

3H

2016

/11/

23

Trai

ning

Inst

itute

, Min

istry

of

Fina

nce,

R.O

.C.

Mon

ey L

aund

erin

g C

ontro

l Act

and

Cas

e Ana

lysi

s II

Dire

ctor

Ta

i, Ji

in-C

hyua

n 3H

20

16/1

0/11

Ta

iwan

Cor

pora

te G

over

nanc

e A

ssoc

iatio

n A

naly

zatio

n of

Ent

erpr

ise

treat

men

t–Fo

cusi

ng o

n La

test

Lab

or

Man

agem

ent D

ispu

te

3H

2016

/11/

23

Taiw

an C

orpo

rate

Gov

erna

nce

Ass

ocia

tion

Frau

d R

isk

Gov

erna

nce–

Rec

ogni

tion

of R

isk

Man

agem

ent o

f Fr

aud

Dire

ctor

K

u La

i, M

ei-H

sueh

3H

2016

/6/1

6 Se

curit

ies a

nd F

utur

es In

stitu

te

The

Seco

nd E

ditio

n Aw

ardi

ng C

erem

ony

and

Lect

ure

of

Eval

uatio

n of

Cor

pora

te G

over

nanc

e

3H

2016

/10/

11

Taiw

an C

orpo

rate

Gov

erna

nce

Ass

ocia

tion

Ana

lyza

tion

of E

nter

pris

e tre

atm

ent–

Focu

sing

on

Late

st L

abor

M

anag

emen

t Dis

pute

3H

2016

/11/

23

Taiw

an C

orpo

rate

Gov

erna

nce

Ass

ocia

tion

Frau

d R

isk

Gov

erna

nce–

Rec

ogni

tion

of R

isk

Man

agem

ent o

f Fr

aud


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

1

Dev

iatio

ns fr

om “

the

Cor

pora

te G

over

nanc

e B

est-P

ract

ice

Prin

cipl

es fo

r TW

SE/T

PEx

List

ed

Com

pani

es”

and

Rea

sons

Yes

No

Brie

f Exp

lana

tion

9. P

leas

e ex

plai

n th

e im

prov

emen

ts w

hich

hav

e be

en m

ade

in a

ccor

danc

e w

ith th

e re

sults

of t

he

Cor

pora

te

Gov

erna

nce

Eval

uatio

n Sy

stem

re

leas

ed b

y th

e C

orpo

rate

Gov

erna

nce

Cen

ter,

Taiw

an

Stoc

k Ex

chan

ge,

and

prov

ide

the

prio

rity

enha

ncem

ent m

easu

res.

(1)T

he C

ompa

ny h

as p

ublic

ly a

nnou

nced

the

Engl

ish

mat

eria

l inf

orm

atio

n on

MO

PS.

(2)T

he C

ompa

ny e

ncou

rage

s di

rect

ors

for

educ

atio

n co

ntin

uous

ly a

ccor

ding

to

the

“Dire

ctio

ns f

or t

he

Impl

emen

tatio

n of

Con

tinui

ng E

duca

tion

for D

irect

ors

and

Supe

rvis

ors

of T

WSE

Lis

ted

and

TPEx

Lis

ted

Com

pani

es”.

Not

e: E

xpla

natio

n sh

ould

be

prov

ided

in th

e fie

ld o

f "B

rief E

xpla

natio

n" re

gard

less

whe

ther

the

answ

er to

"Im

plem

enta

tion

Stat

us"

is "

Yes"

or "

No"

.


(IV) The Composition and Operations of the Remuneration Committee

1. The Remuneration Committee was established in 2011 and consists of three

independent directors.

2. The duties of the Remuneration Committee are as follows:

(1) Establish and periodically review the performance evaluation and

remuneration policy, system, standards, and structure for directors and

managerial officers.

(2) Periodically evaluate and establish the remuneration of directors and

managerial officers.

3. The Remuneration Committee convened three (A) meetings in 2016.

The members' attendance status is as follows:

Title Name Attendance in Person (B)

By Proxy

Attendance Rate (%)

B/A Remark

Convener Yau, Sea-Wain 3 0 100% None

Member Tsen, Ron-Syou 3 0 100% None

Member Chou, Yu-Cheng 3 0 100% None

D.

Co

rpora

te S

oci

al

Res

po

nsi

bil

ity

Eval

uat

ion

Ite

m

Imple

men

tati

on S

tatu

s (Note

1)

Dev

iati

ons

fro

m “

the

Co

rpo

rate

So

cial

Res

po

nsi

bil

ity B

est-

Pra

ctic

e

Pri

nci

ple

s fo

r T

WS

E/T

PE

x

Lis

ted

Co

mp

anie

s” a

nd

Rea

son

s

Yes

N

o

Bri

ef E

xpla

nat

ion

(No

te 2

)

1.I

mple

men

tati

on

of

Co

rpora

te G

over

nan

ce

(1)

Has

the

Co

mp

any e

stab

lish

ed i

ts c

orp

ora

te

soci

al re

spo

nsi

bil

ity p

oli

cies

o

r sy

stem

s?

Has

a p

erfo

rman

ce r

evie

w b

een

co

nduct

ed

ther

eof?

○

(1

) T

he

Com

pan

y h

as e

stab

lish

ed the

"Cen

tral

Rei

nsu

ran

ce C

orp

ora

tio

n

- C

orp

ora

te S

oci

al R

esponsi

bil

ity P

oli

cy"

and

"C

entr

al R

ein

sura

nce

Corp

ora

tion -

Corp

ora

te S

oci

al R

esp

on

sibil

ity P

rin

cip

les"

as

the

guid

elin

es f

or

fulf

illi

ng t

he

Corp

ora

te S

oci

al R

esp

onsi

bil

itie

s an

d a

s

the

bas

is f

or

rele

van

t m

anag

emen

t m

easu

res.

All

bu

sin

ess

unit

s sh

all

set

up t

hei

r an

nual

oper

atin

g p

lan

s b

ased

on

th

e af

ore

men

tio

ned

poli

cies

and p

rinci

ple

s an

d t

o i

mp

lem

ent

the

pla

ns

acco

rdin

gly

.

Eac

h y

ear,

the

Com

pan

y c

ond

uct

s re

gu

lar

per

form

ance

rev

iew

on

such

act

ivit

ies.

The

revie

w r

esult

s w

ill

be

use

d a

s th

e b

asis

for

makin

g t

he

annual

CS

R p

lans

for

the

fort

hco

min

g y

ear,

an

d w

ill

be

inco

rpora

ted i

nto

the

"Corp

ora

te S

oci

al R

esp

on

sib

ilit

y R

epo

rt"

of

the

Com

pan

y. T

he

"2016 C

orp

ora

te S

oci

al R

esp

on

sib

ilit

y R

eport

"

of

the

Com

pan

y h

as b

een d

iscl

ose

d o

n t

he

Mar

ket

Ob

serv

atio

n P

ost

Syst

em:

htt

p:/

/mops.

twse

.com

.tw

/mo

ps/

web

/t1

00sb

11

as w

ell

as t

he

off

icia

l w

ebsi

te o

f th

e C

om

pan

y:

htt

p:/

/ww

w.c

entr

alre

.com

/conte

nt/

info

rmat

ion

/in

form

atio

n0

9.h

tm.

No

ne


http://mops.twse.com.tw/mops/web/t100sb11

http://www.centralre.com/content/information/information09.htm


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e1)

Dev

iatio

ns fr

om “

the

Cor

pora

te S

ocia

l R

espo

nsib

ility

Bes

t-Pra

ctic

e Pr

inci

ples

for T

WSE

/TPE

x Li

sted

Com

pani

es”

and

Rea

sons

Ye

s N

o B

rief E

xpla

natio

n (Not

e 2)

(2)

Has

th

e C

ompa

ny

arra

nged

re

gula

r tra

inin

g on

co

rpor

ate

soci

al

resp

onsi

bilit

ies?

(3

) H

as t

he C

ompa

ny a

ppoi

nted

a f

ull-t

ime

(par

t-tim

e)

busi

ness

un

it to

fa

cilit

ate

CSR

-rela

ted

mat

ters

? H

as t

he b

oard

of

dire

ctor

s de

lega

ted

a se

nior

man

agem

ent

leve

l to

adm

inis

ter

thes

e m

atte

rs a

nd t

o pr

ovid

e up

date

d st

atus

to th

e bo

ard?

○ ○

(2)

Each

yea

r, th

e C

ompa

ny o

rgan

izes

reg

ular

CSR

- rela

ted

train

ings

in

clud

ing

ethi

cal

corp

orat

e m

anag

emen

t, pe

rson

al

info

rmat

ion

prot

ectio

n, c

ompl

ianc

e an

d in

tern

al a

udit/

cont

rol.

From

tim

e to

tim

e, it

also

ass

igns

our

em

ploy

ees t

o pa

rtici

pate

in e

xter

nal t

rain

ing

or

sem

inar

s on

co

rpor

ate

gove

rnan

ce

and

corp

orat

e so

cial

re

spon

sibi

lity.

(3)

Und

er th

e lea

ders

hip

of th

e Pre

side

nt an

d fo

cusi

ng o

n th

e fou

r maj

or

aspe

cts

of “

impl

emen

ting

corp

orat

e go

vern

ance

”, “

deve

lopi

ng a

su

stai

nabl

e en

viro

nmen

t”,

“pre

serv

ing

publ

ic

wel

fare

” an

d “e

nhan

cing

info

rmat

ion

disc

losu

re”,

the

Com

pany

has

app

oint

ed it

s Pr

ojec

t D

ivis

ion

as t

he r

espo

nsib

le d

epar

tmen

t to

fac

ilita

te t

he

proj

ect a

nd c

oord

inat

e al

l dep

artm

ent h

eads

to im

plem

ent v

ario

us

initi

ativ

es b

ased

on

the

annu

al o

pera

ting

plan

of

the

resp

ectiv

e bu

sine

ss u

nit.

The

impl

emen

tatio

n st

atus

and

ach

ieve

men

ts a

re

inco

rpor

ated

into

the

“Cor

pora

te S

ocia

l Res

pons

ibili

ty R

epor

t” o

f th

e C

ompa

ny,

whi

ch w

ill b

e re

gula

rly p

rese

nted

to

the

boar

d of

di

rect

ors e

ach

year

.

Non

e

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e1)

Dev

iatio

ns fr

om “

the

Cor

pora

te S

ocia

l R

espo

nsib

ility

Bes

t-Pra

ctic

e Pr

inci

ples

for T

WSE

/TPE

x Li

sted

Com

pani

es”

and

Rea

sons

Ye

s N

o B

rief E

xpla

natio

n (Not

e 2)

(4)

Has

the

Com

pany

est

ablis

hed

reas

onab

le

rem

uner

atio

n po

licie

s? H

as i

t al

igne

d th

e em

ploy

ee p

erfo

rman

ce e

valu

atio

n sy

stem

w

ith

its

corp

orat

e so

cial

re

spon

sibi

lity

polic

ies?

Is

ther

e a

spec

ific

and

effe

ctiv

e re

war

d an

d di

scip

linar

y sy

stem

?

○

(4)

The

Com

pany

has

est

ablis

hed

fair

and

reas

onab

le r

emun

erat

ion

polic

ies

to f

ully

ach

ieve

the

pur

pose

s of

attr

actin

g an

d re

tain

ing

tale

nts.

Empl

oyee

per

form

ance

rev

iew

s ar

e co

nduc

ted

base

d on

cr

iteria

suc

h as

“W

ork

perf

orm

ance

”, “

Cha

ract

er”,

“K

now

ledg

e,

Expe

rienc

e &

Ski

lls”

and

“Rel

iabi

lity”

.

Supp

ose

that

em

ploy

ees

have

vio

late

d re

gula

tions

or i

nter

nal r

ules

, su

ch a

s w

ork

rule

s, pr

inci

ples

of

ethi

cal c

orpo

rate

man

agem

ent o

r co

de o

f eth

ical

con

duct

s, th

e vi

olat

ed b

ehav

iors

will

be

asse

ssed

in

the

perf

orm

ance

app

rais

al,

and

subj

ect

to d

isci

plin

ary

actio

ns

pres

crib

ed in

the

wor

k ru

les,

base

d on

the

seve

rity

of th

e vi

olat

ion.

Si

mila

rly, e

mpl

oyee

s ha

ving

con

tribu

tion

to th

e C

ompa

ny w

ill b

e re

war

ded

base

d on

thei

r ext

ent o

f con

tribu

tion.

Non

e

2. S

usta

inab

le E

nviro

nmen

t Dev

elop

men

t

(1)

Is th

e C

ompa

ny d

evot

ed to

impr

ovin

g th

e ef

ficie

ncy

in r

esou

rce

utili

zatio

n? D

oes

it us

e re

usab

le

mat

eria

l w

ith

low

en

viro

nmen

tal i

mpa

ct?

○

(1

) Th

e C

ompa

ny e

ndea

vors

to

impr

ove

the

effic

ienc

y of

ene

rgy

utili

zatio

n by

adj

ustin

g its

ope

ratio

nal/s

ervi

ce p

roce

dure

s an

d ad

optin

g hi

gh-p

erfo

rman

ce

equi

pmen

t. Th

e m

easu

res

take

n in

clud

e: m

akin

g an

noun

cem

ents

thro

ugh

onlin

e ch

anne

ls, r

educ

ing

phot

ocop

ies,

prom

otin

g pa

perle

ss

mee

tings

, ra

isin

g th

e te

mpe

ratu

re s

ettin

g of

cen

tral

air-c

ondi

tione

rs a

nd c

hang

ing

to

ener

gy-s

avin

g lig

htin

g sy

stem

s com

preh

ensi

vely

.

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e1)

Dev

iatio

ns fr

om “

the

Cor

pora

te S

ocia

l R

espo

nsib

ility

Bes

t-Pra

ctic

e Pr

inci

ples

for T

WSE

/TPE

x Li

sted

Com

pani

es”

and

Rea

sons

Ye

s N

o B

rief E

xpla

natio

n (Not

e 2)

(2)

Has

th

e C

ompa

ny

esta

blis

hed

suita

ble

envi

ronm

enta

l m

anag

emen

t sy

stem

bas

ed

on th

e ch

arac

teris

tics o

f the

indu

stry

?

(3)

Is t

he C

ompa

ny a

lert

to t

he i

nflu

ence

of

clim

ate

chan

ge

on

its

oper

atio

nal

activ

ities

? H

as

it im

plem

ente

d a

Gre

enho

use

Gas

Inv

ento

ries

Syst

em a

nd

esta

blis

hed

stra

tegi

es

for

ener

gy

cons

erva

tion/

carb

on r

educ

tion

and

GH

G

redu

ctio

n?

○ ○

(2)

The

Com

pany

is

a pr

ofes

sion

al r

eins

urer

, no

t w

ithin

sig

nific

ant

pollu

tion

and

ener

gy i

nten

sive

ind

ustri

es.

Hen

ce,

ISO

1400

1 or

re

leva

nt e

nviro

nmen

tal m

anag

emen

t sys

tem

s ar

e no

t app

licab

le to

th

e Co

mpa

ny.

Nev

erth

eles

s, th

e C

ompa

ny h

as m

ade

effo

rts i

n na

tura

l en

viro

nmen

t pr

otec

tion

and

esta

blis

hed

the

"Cen

tral

Rei

nsur

ance

C

orpo

ratio

n -

Gui

delin

es

for

Prom

otin

g En

ergy

C

onse

rvat

ion/

Car

bon

Red

uctio

n."

The

Gen

eral

Affa

irs D

epar

tmen

t is

resp

onsi

ble

for f

orm

ulat

ion,

impl

emen

tatio

n an

d m

aint

enan

ce o

f re

leva

nt e

nviro

nmen

tal m

anag

emen

t sys

tem

s an

d ac

tion

plan

s. Th

e G

ener

al A

ffairs

Dep

artm

ent a

lso

arra

nges

env

ironm

enta

l edu

catio

n fo

r all

empl

oyee

s dul

y.

(3)

The

Com

pany

's m

anag

emen

t obj

ectiv

e of

ene

rgy

cons

erva

tion

and

carb

on

redu

ctio

n is

0.

5%

redu

ctio

n in

w

ater

an

d el

ectri

city

co

nsum

ptio

n an

nual

ly.

The

met

hods

are

as f

ollo

ws:

a.

Pro

mot

e th

e co

ncep

t of w

ater

and

ele

ctric

ity c

onse

rvat

ion

on a

re

gula

r bas

is.

b. S

et th

e ai

r-con

ditio

ner a

t a te

mpe

ratu

re o

f 26-

28 d

egre

es; c

lean

an

d m

aint

ain

the

air-c

ondi

tione

rs o

n a

regu

lar b

asis

to im

prov

e th

e en

ergy

effi

cien

cy.

Non

e

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e1)

Dev

iatio

ns fr

om “

the

Cor

pora

te S

ocia

l R

espo

nsib

ility

Bes

t-Pra

ctic

e Pr

inci

ples

for T

WSE

/TPE

x Li

sted

Com

pani

es”

and

Rea

sons

Ye

s N

o B

rief E

xpla

natio

n (Not

e 2)

c. U

se T

5 lig

hts t

o re

plac

e tra

ditio

nal l

ight

ing

devi

ces;

save

pow

er

cons

umpt

ion;

tur

n of

f th

e lig

hts

for

one

hour

dur

ing

lunc

h br

eaks

. d.

Pur

chas

e th

e el

ectri

cal g

oods

affi

xed

with

ene

rgy-

savi

ng la

bels

.

The

follo

win

g m

easu

res a

re a

lso

bein

g st

reng

then

ed:

a. F

acsi

mile

s are

tran

smitt

ed v

ia el

ectro

nic f

iles w

ithou

t prin

ting

to

redu

ce th

e us

e of

pap

er a

nd c

arbo

n to

ner.

b. E

ncou

rage

em

ploy

ees

to c

omm

ute

by p

ublic

tran

spor

tatio

n or

by

bic

ycle

.

3. P

rese

rvin

g Pu

blic

Wel

fare

(1

) H

as

the

Com

pany

es

tabl

ishe

d re

leva

nt

man

agem

ent

polic

ies

and

proc

edur

es

base

d on

the

Inte

rnat

iona

l B

ill o

f H

uman

R

ight

s and

rele

vant

regu

latio

ns?

(2

) H

as t

he C

ompa

ny e

stab

lishe

d em

ploy

ee

grie

vanc

e m

echa

nism

s an

d ch

anne

ls?

Are

th

e co

mpl

aint

s pro

perly

dea

lt w

ith?

○ ○

(1

) In

acc

orda

nce

with

the

requ

irem

ent s

set

for

th in

the

Em

ploy

men

t Se

rvic

e A

ct a

nd A

ct o

f G

ende

r Eq

ualit

y in

Em

ploy

men

t, th

e C

ompa

ny is

com

mitt

ed to

ens

urin

g eq

ual e

mpl

oym

ent o

ppor

tuni

ty

to a

ll its

em

ploy

ees

and

job

cand

idat

es. F

urth

erm

ore,

the

Com

pany

ne

ither

com

pels

em

ploy

ees

to la

bor n

or h

ire c

hild

wor

kers

. All

the

hum

an r

esou

rces

pol

icie

s of

the

Com

pany

are

est

ablis

hed

in

acco

rdan

ce w

ith th

e La

bor S

tand

ards

Act

and

rele

vant

regu

latio

ns.

(2)

The

Com

pany

has

bui

lt up

ded

icat

ed t

elep

hone

lin

e an

d e-

mai

l ad

dres

s to

re

ceiv

e em

ploy

ee

grie

vanc

e,

as

wel

l as

se

xual

ha

rass

men

t cas

e. T

he w

hist

le-b

low

er's

iden

tity

and

the

cont

ents

of

Non

e

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e1)

Dev

iatio

ns fr

om “

the

Cor

pora

te S

ocia

l R

espo

nsib

ility

Bes

t-Pra

ctic

e Pr

inci

ples

for T

WSE

/TPE

x Li

sted

Com

pani

es”

and

Rea

sons

Ye

s N

o B

rief E

xpla

natio

n (Not

e 2)

(3)

Has

the

Com

pany

pro

vide

d a

safe

and

he

alth

y w

orki

ng

envi

ronm

ent

for

its

empl

oyee

s as w

ell a

s rel

evan

t tra

inin

g on

a

regu

lar b

asis

?

(4)

Has

the

Com

pany

est

ablis

hed

a re

gula

r co

mm

unic

atio

n m

echa

nism

w

ith

its

empl

oyee

s? W

ith re

gard

to a

ny o

pera

tiona

l ch

ange

s w

hich

m

ay

have

si

gnifi

cant

im

pact

on

th

e em

ploy

ees,

does

th

e C

ompa

ny n

otify

the

em

ploy

ees

thro

ugh

a re

ason

able

met

hod?

○ ○

the

repo

rt w

ill b

e ke

pt c

onfid

entia

l. O

n re

ceiv

ing

a gr

ieva

nce

or

whi

stle

-blo

win

g ca

se, t

he C

ompa

ny w

ill a

ssig

n de

dica

ted

pers

onne

l to

inv

estig

ate

and

man

age

the

case

im

med

iate

ly.

Ther

e w

as n

o gr

ieva

nce

case

in 2

016.

(3

) In

ord

er t

o pr

ovid

e a

safe

and

hea

lthy

wor

king

env

ironm

ent

to

empl

oyee

s, th

e C

ompa

ny is

com

mitt

ed to

acc

iden

t pre

vent

ion

and

envi

ronm

enta

l hyg

iene

. In

addi

tion

to r

outin

e in

spec

tions

on

wat

er

qual

ity a

nd c

arbo

n di

oxid

e le

vel

in t

he o

ffice

are

a, t

he C

ompa

ny

also

org

aniz

es e

mpl

oyee

saf

ety

train

ing

and

fire

drill

s. A

n of

fice

acce

ss c

ontro

l sys

tem

is in

pla

ce. E

mpl

oyee

phy

sica

l exa

min

atio

ns

are

offe

red

on a

regu

lar b

asis

.

(4)

The

Com

pany

pro

vide

s sm

ooth

com

mun

icat

ion

chan

nels

for

its

empl

oyee

s. Is

sues

reg

ardi

ng t

o th

e rig

hts

and

oblig

atio

ns o

f em

ploy

ees

may

be

co

mm

unic

ated

th

roug

h fa

ce-to

-face

di

scus

sion

s w

ith

the

supe

rvis

ors,

e-m

ails

or

m

eetin

gs.

With

re

spec

t to

any

ope

ratio

nal

chan

ges

whi

ch m

ay h

ave

sign

ifica

nt

impa

ct o

n em

ploy

ees,

the

Com

pany

will

not

ify t

he e

mpl

oyee

s th

roug

h m

eetin

gs o

r oth

er re

ason

able

cha

nnel

s.

Non

e

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e1)

Dev

iatio

ns fr

om “

the

Cor

pora

te S

ocia

l R

espo

nsib

ility

Bes

t-Pra

ctic

e Pr

inci

ples

for T

WSE

/TPE

x Li

sted

Com

pani

es”

and

Rea

sons

Ye

s N

o B

rief E

xpla

natio

n (Not

e 2)

(5)

Has

the

Com

pany

est

ablis

hed

effe

ctiv

e co

mpe

tenc

y de

velo

pmen

t pla

ns fo

r its

em

ploy

ees?

(6)

Has

th

e C

ompa

ny

esta

blis

hed

rele

vant

co

nsum

er

prot

ectio

n po

licie

s an

d co

mpl

aint

pro

cedu

res

with

reg

ard

to i

ts

R&

D,

proc

urem

ent,

prod

uctio

n,

oper

atio

nal a

nd se

rvic

e flo

ws?

(7

) W

ith re

gard

to th

e m

arke

ting

and

labe

ling

of

its

prod

ucts

an

d se

rvic

es,

has

the

Com

pany

fo

llow

ed

rele

vant

re

gula

tions

an

d in

tern

atio

nal s

tand

ards

?

○ ○ ○

(5)

To d

evel

op e

mpl

oyee

s' jo

b co

mpe

tenc

y, t

he C

ompa

ny p

rovi

des

vario

us i

nter

nal

and

exte

rnal

pro

fess

iona

l tra

inin

g pr

ogra

ms

for

empl

oyee

s, an

d at

tend

ing

over

seas

tra

inin

g or

in

tern

atio

nal

conf

eren

ces.

In a

dditi

on, e

mpl

oyee

s ar

e al

so e

ncou

rage

d to

atte

nd

dive

rsifi

ed s

elf-l

earn

ing

and

deve

lopm

ent p

rogr

ams.

In 2

016,

ther

e w

ere

368

atte

ndan

ces

to a

ttend

rel

ated

dom

estic

cou

rses

incl

udin

g fin

ance

and

rein

sura

nce.

The

Com

pany

als

o or

gani

zes

vario

us in

tern

al p

rofe

ssio

nal t

rain

ing,

an

d en

cour

ages

em

ploy

ees

to

acqu

ire

vario

us

prof

essi

onal

ce

rtific

ates

to im

prov

e th

eir c

ompe

titiv

enes

s.

(6)

As

a re

insu

ranc

e co

mpa

ny,

the

Com

pany

pro

vide

s re

insu

ranc

e se

rvic

es b

ased

on

the

need

s of c

usto

mer

s. C

usto

mer

s ar

e w

elco

med

to

con

sult

the

Com

pany

or

file

a co

mpl

aint

thr

ough

the

web

site

, e-

mai

l add

ress

or t

elep

hone

of t

he C

ompa

ny.

(7)

This

ite

m i

s no

t ap

plic

able

, si

nce

Cen

tral

Re

is a

rei

nsur

ance

co

mpa

ny.

Non

e

Non

e

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e1)

Dev

iatio

ns fr

om “

the

Cor

pora

te S

ocia

l R

espo

nsib

ility

Bes

t-Pra

ctic

e Pr

inci

ples

for T

WSE

/TPE

x Li

sted

Com

pani

es”

and

Rea

sons

Ye

s N

o B

rief E

xpla

natio

n (Not

e 2)

(8)

Bef

ore

enga

ging

a n

ew s

uppl

ier,

has

the

Com

pany

che

cked

whe

ther

the

sup

plie

r ha

s an

y pr

evio

us r

ecor

d of

env

ironm

enta

l or

soci

al im

pact

?

(9)

Has

the

Com

pany

incl

uded

a p

rovi

sion

in

its c

ontra

cts

with

the

mai

n su

pplie

rs t

hat

the

Com

pany

is

entit

led

to t

erm

inat

e or

re

scin

d th

e co

ntra

ct a

t any

tim

e w

hen

the

supp

lier

is i

nvol

ved

in a

ctiv

ities

whi

ch

have

br

each

ed

its

corp

orat

e so

cial

re

spon

sibi

lity

or

have

si

gnifi

cant

en

viro

nmen

tal o

r soc

ial i

mpa

ct?

○ ○

(8)

As a

cur

rent

pra

ctic

e, b

efor

e es

tabl

ishi

ng b

usin

ess p

artn

ersh

ips w

ith

supp

liers

, th

e C

ompa

ny

proc

eeds

to

su

rvey

th

eir

com

pany

re

gist

ratio

n in

form

atio

n, p

rofe

ssio

nal b

ackg

roun

d an

d pe

rfor

man

ce

in th

e pa

st. E

spec

ially

the

Com

pany

put

s em

phas

is o

n th

e re

cord

s of

supp

liers

’ im

pact

on

the

envi

ronm

ent a

nd so

ciet

y.

(9

) Th

e C

ompa

ny m

ust

eval

uate

the

leg

itim

acy

and

the

reco

rds

of

inte

grity

beh

avio

r of

its

sup

plie

rs,

its c

usto

mer

s an

d al

l tra

ding

pa

rtner

s w

hen

bein

g en

gage

d in

bus

ines

s. Th

e co

ntra

cts

betw

een

the

Com

pany

and

its

sup

plie

rs m

ust

stat

e th

e cl

ause

s of

int

egrit

y m

anag

emen

t, w

hich

the

Com

pany

is

entit

led

to t

erm

inat

e th

e co

ntra

cts

and

requ

est

for

a co

mpe

nsat

ion

for

dam

ages

if

the

supp

liers

bre

ach

the

clau

ses o

f int

egrit

y m

anag

emen

t.

Non

e

Non

e

4. E

nhan

cing

Info

rmat

ion

Dis

clos

ure

(1)

Has

the

Com

pany

dis

clos

ed t

hrou

gh i

ts w

ebsi

te o

r th

e M

arke

t O

bser

vatio

n Po

st

Syst

em im

porta

nt a

nd re

liabl

e in

form

atio

n re

latin

g to

cor

pora

te so

cial

resp

onsi

bilit

y?

○

(1

) Th

e C

ompa

ny h

as d

iscl

osed

its

"C

orpo

rate

Soc

ial

Res

pons

ibili

ty

Polic

ies"

, "C

orpo

rate

Soc

ial R

espo

nsib

ility

Prin

cipl

es"

and

annu

al

"Cor

pora

te S

ocia

l R

espo

nsib

ility

Rep

orts

" in

its

offi

cial

web

site

. Th

e in

form

atio

n ha

s al

so b

een

repo

rted

to th

e M

arke

t Obs

erva

tion

Post

Sys

tem

(http

://m

ops.t

wse

.com

.tw/m

ops/

web

/t100

sb11

). W

ith

rega

rd

to

the

Com

pany

’s

achi

evem

ent

in

fulfi

lling

th

e co

rpor

ate

soci

al r

espo

nsib

ilitie

s ha

s al

so b

een

disc

lose

d in

the

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e1)

Dev

iatio

ns fr

om “

the

Cor

pora

te S

ocia

l R

espo

nsib

ility

Bes

t-Pra

ctic

e Pr

inci

ples

for T

WSE

/TPE

x Li

sted

Com

pani

es”

and

Rea

sons

Ye

s N

o B

rief E

xpla

natio

n (Not

e 2)

annu

al r

epor

t. Pl

ease

vis

it th

e “C

orpo

rate

Soc

ial

Res

pons

ibili

ty”

sect

ion

of th

e C

ompa

ny’s

offi

cial

web

site:

ht

tp://

ww

w.ce

ntra

lre.c

om/c

onte

nt/in

form

atio

n/in

form

atio

n09.

htm

an

d Th

e “C

orpo

rate

Int

eres

t Pa

rties

” se

ctio

n of

the

Com

pany

’s

offic

ial w

ebsi

te:

http

://w

ww.

cent

ralre

.com

/con

tent

/info

rmat

ion/

info

rmat

ion0

7.ht

m.

5. I

f th

e C

ompa

ny h

as e

stabl

ishe

d its

ow

n "C

orpo

rate

Soc

ial

Res

pons

ibili

ty P

rinci

ples

" ba

sed

on t

he "

Corp

orat

e So

cial

Res

pons

ibili

ty B

est-P

ract

ice

Prin

cipl

es f

or

TWSE

/TPE

x Li

sted

Com

pani

es",

ple

ase

expl

ain

the

diffe

renc

e be

twee

n th

e ac

tual

pra

ctic

es a

nd th

e Pr

inci

ples

.

The

Com

pany

has

est

ablis

hed

its C

orpo

rate

Soc

ial R

espo

nsib

ility

Prin

cipl

es in

201

5. T

here

is n

o di

ffere

nce

betw

een

the

actu

al p

ract

ices

and

the

Prin

cipl

es.

6. O

ther

impo

rtant

info

rmat

ion

whi

ch is

hel

pful

for u

nder

stan

ding

the

Com

pany

’s C

SR im

plem

enta

tion

stat

us:

(1)

The

Com

pany

has

com

plet

ed i

ts "

2016

Cor

pora

te S

ocia

l R

espo

nsib

ility

Rep

ort"

acc

ordi

ng t

o G

RI

G4

guid

elin

es. T

he r

epor

t ha

s be

en a

ppro

ved

in th

e bo

ard

mee

ting.

The

rel

evan

t re

porti

ng a

nd d

iscl

osur

e pr

oced

ures

hav

e be

en c

ompl

eted

in

acco

rdan

ce w

ith t

he r

equi

rem

ents

set

for

th i

n "T

aiw

an S

tock

Exc

hang

e C

orpo

ratio

n R

ules

Gov

erni

ng I

nfor

mat

ion

Filin

g by

Com

pani

es w

ith T

WSE

Lis

ted

Secu

ritie

s an

d O

ffsho

re F

und

Inst

itutio

ns w

ith T

WSE

Lis

ted

Offs

hore

Ex

chan

ge-T

rade

d Fu

nds"

. (2

) A

ppen

ded

belo

w a

re th

e m

ajor

ach

ieve

men

ts o

f the

Com

pany

in te

rms o

f cor

pora

te so

cial

resp

onsi

bilit

ies:

a.

Prov

idin

g U

nder

writ

ing

Cap

acity

to D

irect

Writ

ing

Insu

rers

To

mee

t the

dem

and

for

cove

rage

aga

inst

env

ironm

enta

l cha

nge

and

natu

ral d

isas

ters

, the

Com

pany

pro

vide

s un

derw

ritin

g ca

paci

ty to

the

mar

ket o

f di

rect

in

sure

rs s

o th

at th

ey c

an o

ffer r

elia

ble

life

and

non-

life

cove

rage

to th

e cu

stom

ers

and

cons

umer

s, in

clud

ing

earth

quak

e, ty

phoo

n, fl

ood,

bus

ines

s in

terr

uptio

n an

d pe

rson

al a

ccid

ent i

nsur

ance

pro

duct

s.

b. S

uppo

rting

the

Dev

elop

men

t and

Ope

ratio

n of

Insu

ranc

e Pr

oduc

ts In

itiat

ed b

y th

e go

vern

men

t


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e1)

Dev

iatio

ns fr

om “

the

Cor

pora

te S

ocia

l R

espo

nsib

ility

Bes

t-Pra

ctic

e Pr

inci

ples

for T

WSE

/TPE

x Li

sted

Com

pani

es”

and

Rea

sons

Ye

s N

o B

rief E

xpla

natio

n (Not

e 2)

The

Com

pany

offe

rs se

rvic

es su

ch a

s “C

ompu

lsor

y A

utom

obile

Lia

bilit

y In

sura

nce”

and

“R

esid

entia

l Ear

thqu

ake

Insu

ranc

e”.

c. Fa

cilit

atin

g th

e Ex

chan

ge o

f Kno

wle

dge

amon

g In

sura

nce

Prof

essi

onal

s In

201

6, t

he C

ompa

ny o

rgan

ized

a t

otal

of

twel

ve e

xter

nal

sem

inar

s, w

hich

was

par

ticip

ated

by

near

ly 4

70 p

erso

ns.

The

sem

inar

s co

vere

d ei

ght

subj

ects

, in

clud

ing

“Agi

ng p

rodu

cts

of li

fe in

sura

nce

in J

apan

” an

d “A

Brie

f Ove

rvie

w o

f the

Man

agem

ent o

f Acc

iden

t and

Hea

lth In

sura

nce

cove

rage

for L

ess

than

3

Year

s by

Non

-Life

Insu

ranc

e C

ompa

nies

bas

ed o

n th

e Li

fe In

sura

nce

indu

stry

's ex

perie

nce”

. d.

Sup

porti

ng P

ublic

Wel

fare

and

Con

tribu

ting

to th

e So

ciet

y In

201

5, th

e C

ompa

ny d

onat

ed N

TD30

0,00

0 to

the

Chan

g Yu

ng-F

a Fo

unda

tion

to s

pons

or th

e A

ustra

lia D

ebut

of t

he E

verg

reen

Sym

phon

y O

rche

stra

ow

ned

and

supe

rvis

ed b

y th

e Fo

unda

tion.

Und

er a

coo

pera

tion

prog

ram

with

Ede

n So

cial

Wel

fare

Fou

ndat

ion,

the

Com

pany

invi

ted

Eden

’s b

lind

mas

sage

ther

apis

ts to

pr

ovid

e m

assa

ge s

ervi

ces

at th

e ve

nue

of th

e C

ompa

ny’s

201

6 cu

stom

er e

ngag

emen

t act

ivity

. The

pur

pose

is to

cre

ate

wor

k op

portu

nitie

s an

d de

mon

stra

te o

ur

care

to th

e le

ss a

dvan

tage

d, in

the

mea

ntim

e en

cour

age

soci

al c

ontri

butio

n an

d pa

rtici

patio

n. In

the

sam

e ye

ar, t

he C

ompa

ny a

lso

purc

hase

d a

tota

l of 1

28 e

gg

role

gift

box

es fr

om th

e W

orks

hop

with

Hap

pine

ss (S

yin-

Lu S

ocia

l Wel

fare

Fou

ndat

ion)

for o

ur e

mpl

oyee

s, as

wel

l as

the

hand

-mad

e so

ap g

ift b

oxes

pro

duce

d in

the

Tuch

eng

Shel

tere

d W

orks

hop

of T

aiw

an F

ound

atio

n fo

r the

Blin

d fo

r our

cus

tom

ers.

e. Im

plem

ent S

trict

Ris

k C

ontro

l Mea

sure

s to

safe

guar

d th

e rig

hts a

nd in

tere

sts o

f our

cus

tom

ers a

nd a

ll in

tere

sted

par

ties

For

insu

ranc

e co

mpa

nies

, ris

k m

anag

emen

t is

an im

porta

nt p

art o

f co

rpor

ate

gove

rnan

ce. A

ppro

pria

te r

isk

man

agem

ent h

elps

to r

educ

e th

e pr

obab

ility

of

inco

rrec

t bus

ines

s de

cisi

on, m

inim

ize

or a

void

pot

entia

l los

s, in

the

mea

ntim

e pu

rsue

opt

imiz

ed p

rofit

for t

he C

ompa

ny w

ith a

ccep

tabl

e ris

k. T

he C

ompa

ny,

ther

efor

e, is

dev

oted

to b

uild

ing

up a

n ef

fect

ive

risk

man

agem

ent s

yste

m to

fulfi

ll its

com

mitm

ents

to c

usto

mer

s and

all

inte

rest

ed p

artie

s.

As

a pr

ofes

sion

al re

insu

ranc

e se

rvic

e pr

ovid

er, t

he C

ompa

ny is

dev

oted

to b

uild

ing

up a

n in

tegr

ated

risk

man

agem

ent s

yste

m to

sup

port

the

insu

ranc

e fir

ms

whe

n ac

com

mod

atin

g th

e in

sura

nce

requ

irem

ents

of

the

publ

ic a

gain

st n

atur

al c

atas

troph

es a

nd m

an-m

ade

disa

ster

s. Th

e ris

k m

anag

emen

t sys

tem

is a

lso

impo

rtant

for

the

Com

pany

to c

ope

with

its

over

all o

pera

ting

risks

and

mai

ntai

ning

ade

quat

e so

lven

cy, t

here

by s

afeg

uard

ing

the

right

s an

d in

tere

sts

of it

s cu

stom

ers a

nd a

ll in

tere

sted

par

ties.


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e1)

Dev

iatio

ns fr

om “

the

Cor

pora

te S

ocia

l R

espo

nsib

ility

Bes

t-Pra

ctic

e Pr

inci

ples

for T

WSE

/TPE

x Li

sted

Com

pani

es”

and

Rea

sons

Ye

s N

o B

rief E

xpla

natio

n (Not

e 2)

In o

rder

to e

ffect

ivel

y pl

an, s

uper

vise

and

impl

emen

t the

risk

man

agem

ent a

ffairs

, the

Com

pany

has

est

ablis

hed

its E

nter

pris

e R

isk

Man

agem

ent C

omm

ittee

, w

hich

rep

orts

dire

ctly

to

the

boar

d of

dire

ctor

s. Th

e C

omm

ittee

is

com

pose

d of

ind

epen

dent

dire

ctor

s, th

e pr

esid

ent

and

all

depa

rtmen

t he

ads,

with

the

in

depe

nden

t dire

ctor

bei

ng th

e ch

airp

erso

n. In

add

ition

to p

rovi

ding

regu

lar r

epor

ts to

the

boar

d of

dire

ctor

s, th

e C

omm

ittee

is a

lso

resp

onsi

ble

to e

xecu

te th

e ris

k m

anag

emen

t pol

icie

s set

forth

by

the

boar

d of

dire

ctor

s.

f. Pro

vidi

ng a

Saf

e an

d H

ealth

y W

orki

ng E

nviro

nmen

t Th

e Co

mpa

ny is

com

mitt

ed to

acc

iden

t pre

vent

ion

and

envi

ronm

enta

l hyg

iene

. In

addi

tion

to ro

utin

e in

spec

tions

on

wat

er q

ualit

y an

d ca

rbon

dio

xide

leve

l in

the

offic

e ar

ea,

the

Com

pany

als

o or

gani

zes

empl

oyee

saf

ety

train

ing

and

fire

drill

s. A

n of

fice

acce

ss c

ontro

l sy

stem

is

in p

lace

. Em

ploy

ee p

hysi

cal

exam

inat

ions

are

offe

red

on a

regu

lar b

asis

.

(3)

With

rega

rd to

the

Com

pany

’s o

ther

ach

ieve

men

ts in

fulfi

lling

the

corp

orat

e so

cial

resp

onsi

bilit

ies,

plea

se v

isit

the

“Cor

pora

te S

ocia

l Res

pons

ibili

ty”

sect

ion

of th

e C

ompa

ny’s

offi

cial

web

site

: http

://w

ww.

cent

ralre

.com

/con

tent

/info

rmat

ion/

info

rmat

ion0

9.ht

m.

7.If

the

Com

pany

's C

orpo

rate

Soc

ial R

espo

nsib

ility

Rep

ort h

as b

een

appr

oved

by

rele

vant

cer

tific

atio

n in

stitu

tions

, ple

ase

expl

ain

acco

rdin

gly:

N

ot a

pplic

able

.

Not

e: 1

. Exp

lana

tion

shou

ld b

e pr

ovid

ed in

the

field

of "

Brie

f Exp

lana

tion"

rega

rdle

ss w

heth

er th

e an

swer

to "

Impl

emen

tatio

n St

atus

" is

"Ye

s" o

r "N

o".

2. If

the

Com

pany

has

com

pile

d a

Cor

pora

te S

ocia

l Res

pons

ibili

ty R

epor

t, yo

u m

ay p

rovi

de th

e re

leva

nt p

age

num

ber o

r ref

eren

ce in

the

CSR

repo

rt in

stea

d of

a "

Brie

f Ex

plan

atio

n".


E.

Eth

ical

Cor

pora

te M

anag

emen

t

Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e 1)

D

evia

tions

from

“th

e Et

hica

l C

orpo

rate

Man

agem

ent

Bes

t-Pra

ctic

e Pr

inci

ples

for

TWSE

/TPE

x Li

sted

C

ompa

nies

” an

d R

easo

ns

Yes

No

Brie

f Illu

stra

tion

1. E

stab

lish

the

ethi

cal c

orpo

rate

m

anag

emen

t pol

icy

and

prog

ram

s

(1)

Has

the

com

pany

dec

lare

d its

eth

ical

co

rpor

ate

man

agem

ent

polic

ies

and

proc

edur

es in

its

guid

elin

es a

nd e

xter

nal

docu

men

ts, a

s w

ell

as t

he c

omm

itmen

t fr

om

its

boar

d to

im

plem

ent

the

polic

ies?

(2)

Has

the

Com

pany

est

ablis

hed

rele

vant

pr

ogra

ms t

o pr

even

t dis

hone

st b

ehav

iors

an

d de

scrib

ed t

here

in t

he p

roce

dure

s, co

de o

f co

nduc

ts, d

isci

plin

ary

rule

s an

d

○ ○

(1

) Th

e "E

thic

al C

orpo

rate

Man

agem

ent

Bes

t-Pra

ctic

e Pr

inci

ples

" of

the

Com

pany

hav

e be

en r

evie

wed

by

its A

udit

Com

mitt

ee,

appr

oved

by

th

e B

oard

of

D

irect

ors

and

repo

rted

to

the

shar

ehol

ders

at

annu

al g

ener

al m

eetin

g. T

he C

ompa

ny h

as

disc

lose

d th

e Pr

inci

ples

on

its

w

ebsi

te

and

the

Mar

ket

Obs

erva

tion

Post

Sys

tem

in

acco

rdan

ce w

ith t

he r

egul

atio

ns.

The

cont

ents

of

the

Prin

cipl

es i

nclu

de t

he p

olic

ies

for

ethi

cal

corp

orat

e m

anag

emen

t, re

leva

nt m

easu

res

and

the

prev

entiv

e pr

ogra

ms

agai

nst

unet

hica

l be

havi

ors.

All

pers

onne

l of

the

C

ompa

ny a

re re

quire

d to

obs

erve

thes

e pr

inci

ples

, inc

ludi

ng th

e di

rect

ors,

man

ager

s, em

ploy

ees

and

indi

vidu

als

with

act

ual

cont

rol p

ower

.

(2)

To c

arry

out

the

polic

ies

for

ethi

cal c

orpo

rate

man

agem

ent,

the

Com

pany

ha

s m

ade

grea

t ef

forts

in

pr

even

ting

dish

ones

t be

havi

ors.

Thro

ugh

its

"Pro

cedu

res

for

Ethi

cal

Cor

pora

te

Man

agem

ent

and

Gui

delin

es f

or C

ondu

ct",

the

Com

pany

has

Non

e

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e 1)

D

evia

tions

from

“th

e Et

hica

l C

orpo

rate

Man

agem

ent

Bes

t-Pra

ctic

e Pr

inci

ples

for

TWSE

/TPE

x Li

sted

C

ompa

nies

” an

d R

easo

ns

Yes

No

Brie

f Illu

stra

tion

appe

al s

yste

ms

agai

nst v

iola

tions

? H

ave

thes

e be

en p

ract

ical

ly im

plem

ente

d?

(3)

Has

th

e C

ompa

ny

adop

ted

any

prev

entiv

e m

easu

res

agai

nst

the

busi

ness

act

iviti

es w

ithin

thei

r bu

sine

ss

scop

e w

hich

are

at a

hig

her r

isk

of b

eing

in

volv

ed in

une

thic

al c

ondu

cts,

eith

er a

s pr

escr

ibed

in

para

grap

h 2,

Arti

cle

7 of

th

e "E

thic

al

Cor

pora

te

Man

agem

ent

Bes

t Pr

actic

e Pr

inci

ples

fo

r TW

SE/T

PEx

List

ed

Com

pani

es"

or

thos

e w

ould

oth

erw

ise

exis

t?

○

prov

ided

spe

cific

rul

es f

or i

ts e

mpl

oyee

s, re

gard

ing

of t

he

impo

rtant

mat

ters

whe

n ex

ecut

ing

busi

ness

as

wel

l as

the

di

scip

linar

y an

d gr

ieva

nce

syst

ems

agai

nst d

isho

nest

beh

avio

rs.

The

Com

pany

als

o co

nduc

ts in

tern

al re

view

on

a ye

arly

bas

is to

id

entif

y w

heth

er a

ny d

isho

nest

beh

avio

rs h

ave

in b

usin

ess

man

agem

ent.

(3)

Focu

sing

on

busi

ness

act

iviti

es c

arry

ing

a hi

gher

ris

k of

bei

ng

invo

lved

in

an

un

ethi

cal

cond

ucts

, th

e C

ompa

ny

has

impl

emen

ted

stric

t int

erna

l con

trol p

roce

dure

s as f

ollo

ws:

a.

As

pres

crib

ed

in

its

"Inv

estm

ent

Ris

k M

anag

emen

t O

pera

tiona

l Gui

delin

es",

the

Com

pany

sho

uld

agre

e w

ith th

e tra

nsac

tion

coun

terp

artie

s, in

term

edia

te

inst

itutio

ns

and

cust

odia

n in

stitu

tions

in

adva

nce

on t

he b

ank

acco

unt

for

rece

ivin

g re

turn

ed o

r di

scou

nted

com

mis

sion

, han

dlin

g fe

es

or m

anag

emen

t fee

s ar

isin

g fr

om in

vest

men

t act

iviti

es. T

he

mai

n be

nefic

iary

sha

ll be

the

Com

pany

. R

egul

ar a

udit

and

follo

w-u

p sh

ould

be

carr

ied

out

by a

bus

ines

s un

it (th

e Fi

nanc

e D

epar

tmen

t) in

depe

nden

t fr

om

the

exec

utin

g bu

sine

ss u

nit.

b.

Acc

ordi

ng t

o its

"R

egul

atio

ns G

over

ning

Don

atio

ns",

the

C

ompa

ny s

houl

d di

sclo

se o

n its

offi

cial

web

site

, on

a

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e 1)

D

evia

tions

from

“th

e Et

hica

l C

orpo

rate

Man

agem

ent

Bes

t-Pra

ctic

e Pr

inci

ples

for

TWSE

/TPE

x Li

sted

C

ompa

nies

” an

d R

easo

ns

Yes

No

Brie

f Illu

stra

tion

co

nsol

idat

ed b

asis

, al

l do

natio

ns m

ade

to p

oliti

cal

parti

es,

inte

rest

ed p

artie

s and

pub

lic w

elfa

re g

roup

s. D

onat

ions

mad

e to

inte

rest

ed p

artie

s sh

ould

be

reso

lved

in th

e bo

ard

mee

ting

in a

dvan

ce. B

efor

e m

akin

g po

litic

al d

onat

ions

, the

Com

pany

sh

ould

ens

ure

its f

ull c

ompl

ianc

e w

ith th

e re

quire

men

ts s

et

forth

in

th

e Po

litic

al

Don

atio

n A

ct.

Don

atio

ns

to

non-

inte

rest

ed p

artie

s w

ith a

n am

ount

of

NTD

500,

000

or

abov

e sh

ould

be

appr

oved

in th

e bo

ard

mee

ting

in a

dvan

ce.

c. A

ccor

ding

to

the

"Gui

delin

es f

or E

nter

tain

men

t Ex

pens

es

Rei

mbu

rsem

ent“

of

the

Com

pany

, en

terta

inm

ent

expe

nses

sh

all,

in p

rinci

ple,

be

allo

wed

for

bus

ines

s-re

late

d pu

rpos

es

only

, inc

ludi

ng c

ater

ing,

gen

eral

gift

s, ye

ar f

estiv

al g

ifts,

as

wel

l as

cas

h pa

ymen

ts f

or w

eddi

ng o

r fu

nera

ls.

To c

urb

dish

ones

t beh

avio

rs, s

endi

ng g

ifts a

nd c

ash

gifts

shou

ld b

e in

ac

cord

ance

with

the

sta

ndar

ds s

et f

orth

in

the

Com

pany

's "G

uide

lines

Gov

erni

ng t

he G

ifts

and

Cash

Gift

s Se

nt f

or

Cer

emon

ies a

nd C

eleb

ratio

ns".

d.

To

prev

ent d

isho

nest

beh

avio

rs, i

t has

bee

n pr

escr

ibed

in th

e C

ompa

ny's

"Per

sonn

el A

dmin

istra

tion

Proc

edur

es"

that

the

as

soci

ated

em

ploy

ees o

f the

Com

pany

shou

ld n

ot b

e in

volv

ed

in

any

unde

rhan

ded

lend

ing/

bo

rrow

ing,

or

im

prop

er

funn

elin

g of

inte

rest

s w

ith a

ny re

latio

nshi

p pa

rties

that

hav

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e 1)

D

evia

tions

from

“th

e Et

hica

l C

orpo

rate

Man

agem

ent

Bes

t-Pra

ctic

e Pr

inci

ples

for

TWSE

/TPE

x Li

sted

C

ompa

nies

” an

d R

easo

ns

Yes

No

Brie

f Illu

stra

tion

busi

ness

de

alin

gs,

incl

udin

g co

nstru

ctio

n co

ntra

ctor

s, fin

anci

al in

stitu

tions

, and

pro

vide

rs o

f offi

ce su

pplie

rs.

2. C

arry

out

Eth

ical

Cor

pora

te M

anag

emen

t

(1)

Has

th

e C

ompa

ny

chec

ked

the

cred

itwor

thin

ess

reco

rd

of

its

coun

terp

artie

s an

d in

clud

ed a

spe

cific

et

hica

l co

nduc

t cl

ause

in

its c

ontra

cts

with

the

coun

terp

artie

s?

(2)

Has

th

e C

ompa

ny

esta

blis

hed

a fu

ll-tim

e (p

art-t

ime)

bu

sine

ss

unit

to

faci

litat

e m

atte

rs o

n et

hica

l co

rpor

ate

man

agem

ent,

whi

ch i

s su

bord

inat

e to

○ ○

(1

) A

s a

rein

sura

nce

com

pany

, th

e C

ompa

ny i

s en

gage

d in

the

re

insu

ranc

e bu

sine

ss i

n lo

cal

and

over

seas

rei

nsur

ance

mar

ket,

and

Rei

nsur

ance

con

tract

s are

est

ablis

hed

acco

rdin

gly.

An

insu

ranc

e co

ntra

ct is

a c

ontra

ct b

ased

upo

n th

e ut

mos

t goo

d fa

ith. A

rein

sura

nce

cont

ract

is a

kin

d of

insu

ranc

e co

ntra

cts,

so

is a

bsol

utel

y su

bjec

t to

the

prin

cipl

e of

goo

d fa

ith.

In o

ther

w

ords

, al

l re

insu

ranc

e co

ntra

cts

sign

ed b

y th

e C

ompa

ny a

re

cont

ract

s of u

tmos

t goo

d fa

ith.

The

Com

pany

has

inc

lude

d an

eth

ical

cor

pora

te m

anag

emen

t cl

ause

in

the

cont

ract

s sig

ned

with

its

dis

tribu

tors

, su

pplie

rs,

cust

omer

s or o

ther

bus

ines

s cou

nter

parti

es. T

he C

ompa

ny w

ould

cl

aim

to

te

rmin

ate

or

resc

ind

the

cont

ract

w

hene

ver

the

coun

terp

arty

is in

volv

ed in

dis

hone

st c

ondu

cts.

(2)

The

Hum

an R

esou

rces

Dep

artm

ent o

f the

Sup

ervi

sory

Div

isio

n sh

all b

e th

e de

dica

ted

busi

ness

uni

t to

faci

litat

e et

hica

l cor

pora

te

man

agem

ent,

and

shal

l re

port

the

impl

emen

tatio

n st

atus

to

the

boar

d of

dire

ctor

s at t

he e

nd o

f eac

h ye

ar.

Non

e

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e 1)

D

evia

tions

from

“th

e Et

hica

l C

orpo

rate

Man

agem

ent

Bes

t-Pra

ctic

e Pr

inci

ples

for

TWSE

/TPE

x Li

sted

C

ompa

nies

” an

d R

easo

ns

Yes

No

Brie

f Illu

stra

tion

the

boar

d of

di

rect

ors

and

prov

ides

re

gula

r upd

ates

ther

eto?

(3)

Has

th

e C

ompa

ny

esta

blis

hed

the

polic

ies

to p

reve

nt c

onfli

ct o

f in

tere

sts

and

prov

ided

ade

quat

e co

mm

unic

atio

n ch

anne

ls?

Hav

e th

ese

polic

ies/

mea

sure

s be

en im

plem

ente

d in

full?

○

The

Aud

iting

Div

isio

n sh

all b

e re

spon

sibl

e to

aud

it an

d ev

alua

te

whe

ther

th

e pr

even

tive

mea

sure

s es

tabl

ishe

d fo

r et

hica

l co

rpor

ate

man

agem

ent h

ave

been

effe

ctiv

ely

impl

emen

ted.

The

A

uditi

ng D

ivis

ion

shal

l al

so r

evie

w t

he c

ompl

ianc

e st

atus

on

rele

vant

bus

ines

s ope

ratio

ns o

n a

regu

lar b

asis

.

(3)

With

reg

ard

to t

he t

rans

actio

ns w

ith i

nter

este

d pa

rties

, th

e C

ompa

ny h

as p

rovi

ded

spec

ific

mec

hani

sms

and

proc

edur

es in

its

"P

olic

ies

and

Proc

edur

es

for

Con

duct

ing

Non

-loan

Tr

ansa

ctio

ns w

ith I

nter

este

d pa

rties

" an

d "I

nter

nal

Proc

edur

al

Gui

delin

es

for

Con

duct

ing

Non

-loan

Tr

ansa

ctio

ns

with

In

tere

sted

par

ties"

.

It is

stip

ulat

ed i

n th

e "R

egul

ati o

ns G

over

ning

Pro

cedu

res

for

Boa

rd o

f D

irect

ors'

Mee

tings

" of

the

Com

pany

tha

t, if

any

dire

ctor

, man

ager

or o

ther

inte

rest

ed p

arty

atte

ndin

g th

e m

eetin

g ha

s a

stak

e w

ith a

ny a

gend

a ite

m,

the

pers

on s

hall

stat

e th

e im

porta

nt a

spec

ts o

f th

e in

tere

sted

par

ty r

elat

ions

hip

at t

he

resp

ectiv

e m

eetin

g. T

he p

erso

n m

ay n

ot p

artic

ipat

e in

the

di

scus

sion

or

votin

g pr

oces

s, an

d fu

rther

, sh

all

ente

r re

cusa

l du

ring

the

disc

ussi

on a

nd v

otin

g.

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e 1)

D

evia

tions

from

“th

e Et

hica

l C

orpo

rate

Man

agem

ent

Bes

t-Pra

ctic

e Pr

inci

ples

for

TWSE

/TPE

x Li

sted

C

ompa

nies

” an

d R

easo

ns

Yes

No

Brie

f Illu

stra

tion

(4)

Has

the

Com

pany

bui

lt up

effe

ctiv

e ac

coun

ting

and

inte

rnal

con

trol s

yste

ms

to

ensu

re

ethi

cal

corp

orat

e m

anag

emen

t? H

as i

t co

nduc

ted

regu

lar

audi

ts e

ither

thr

ough

its

int

erna

l au

dit

units

or o

utso

urce

d CP

As?

○

To e

nhan

ce t

he m

anag

emen

t of

fin

anci

al t

rans

actio

ns b

etw

een

the

com

pany

and

its

affi

liate

d en

terp

rises

and

avo

id n

on-a

rm's

leng

th

trans

actio

ns

or

impr

oper

tra

nsfe

r of

in

tere

sts,

the

Com

pany

has

est

ablis

hed

the

"Pro

cedu

ral G

uide

lines

Gov

erni

ng

Fina

ncia

l an

d B

usin

ess

Mat

ters

Bet

wee

n th

is C

orpo

ratio

n an

d its

Affi

liate

d En

terp

rises

and

Fire

wal

l Mec

hani

sms"

whi

ch h

as

been

impl

emen

ted

on M

ay 2

7, 2

016

afte

r rev

iew

ed b

y th

e A

udit

Com

mitt

ee a

nd re

solv

ed in

the

boar

d m

eetin

g.

(4)

The

Com

pany

has

est

ablis

hed

its a

ccou

ntin

g, i

nter

nal

cont

rol

and

audi

t sy

stem

s ba

sed

on t

he "

Reg

ulat

ions

Gov

erni

ng t

he

Prep

arat

ion

of F

inan

cial

and

Ope

ratio

nal R

epor

ts b

y In

sura

nce

Ente

rpris

es"

and

"Reg

ulat

ions

Gov

erni

ng I

mpl

emen

tatio

n of

In

tern

al C

ontro

l and

Aud

iting

Sys

tem

of I

nsur

ance

Ent

erpr

ises

".

The

Com

pany

's A

uditi

ng D

ivis

ion

prep

ares

the

audi

t pla

ns o

n an

an

nual

bas

is,

whi

ch i

s su

bmitt

ed t

o th

e bo

ard

of d

irect

ors

for

revi

ew.

Aud

iting

Div

isio

n ex

ecut

es t

he a

udit

plan

. Th

e au

dit

repo

rt ba

sed

on th

e au

dit r

esul

ts w

ill b

e su

bmitt

ed to

the

boar

d of

dire

ctor

s in

the

end.

Bas

ed

on

Arti

cle

26

of

the

"Reg

ulat

ions

G

over

ning

Im

plem

enta

tion

of I

nter

nal

Con

trol

and

Aud

iting

Sys

tem

of

Insu

ranc

e En

terp

rises

", t

he C

ompa

ny s

houl

d al

so a

ppoi

nt t

he

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e 1)

D

evia

tions

from

“th

e Et

hica

l C

orpo

rate

Man

agem

ent

Bes

t-Pra

ctic

e Pr

inci

ples

for

TWSE

/TPE

x Li

sted

C

ompa

nies

” an

d R

easo

ns

Yes

No

Brie

f Illu

stra

tion

(5)

Doe

s th

e C

ompa

ny p

rovi

de i

nter

nal

or

exte

rnal

tra

inin

g on

eth

ical

cor

pora

te

man

agem

ent o

n a

regu

lar b

asis

?

○

acco

unta

nt to

con

duct

the

audi

t of o

n its

inte

rnal

con

trol s

yste

m

ever

y ye

ar,

whi

le

the

acco

unta

nt

audi

t an

d ce

rtify

th

e C

ompa

ny’s

fina

ncia

l rep

ort.

(5)

The

Com

pany

has

dis

clos

ed o

n its

offi

cial

web

site

the

"Eth

ical

C

orpo

rate

M

anag

emen

t B

est

Prac

tice

Prin

cipl

es"

and

"Pro

cedu

res

for

Ethi

cal C

orpo

rate

Man

agem

ent a

nd G

uide

lines

fo

r C

ondu

ct"

of t

he C

ompa

ny t

o no

tify

empl

oyee

. R

elat

ed

train

ings

ar

e pr

ovid

ed

each

ye

ar

to

elim

inat

e di

shon

est

beha

vior

s.

On

a m

onth

ly b

asis

, the

Leg

al a

nd C

ompl

ianc

e D

epar

tmen

t of

the

Com

pany

will

con

solid

ate

the

case

s in

volv

ing

viol

atio

n of

th

e Pr

inci

ples

. Suc

h ca

ses

will

be

repo

rted

in th

e op

erat

ion

and

man

agem

ent m

eetin

g an

d no

tifie

d to

all

depa

rtmen

ts to

ale

rt th

e em

ploy

ees f

rom

tim

e to

tim

e.

Non

e

3. I

mpl

emen

tatio

n of

Whi

stle

-blo

win

g Sy

stem

with

in th

e C

ompa

ny

Bas

ed o

n A

rticl

e 21

of

its "

Proc

edur

es f

or E

thic

al C

orpo

rate

M

anag

emen

t an

d G

uide

lines

fo

r C

ondu

ct",

th

e C

ompa

ny

oper

ates

its

w

hist

le-b

low

ing

syst

em

thro

ugh

the

follo

win

g ap

proa

ches

:


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e 1)

D

evia

tions

from

“th

e Et

hica

l C

orpo

rate

Man

agem

ent

Bes

t-Pra

ctic

e Pr

inci

ples

for

TWSE

/TPE

x Li

sted

C

ompa

nies

” an

d R

easo

ns

Yes

No

Brie

f Illu

stra

tion

(1)

Has

the

Com

pany

est

ablis

hed

spec

ific

whi

stle

-blo

win

g an

d aw

ard

syst

ems?

D

oes

it pr

ovid

e co

nven

ient

w

hist

le-b

low

ing

chan

nels

and

, bas

ed o

n th

e st

atus

of

th

e re

porte

d pa

rty,

appo

inte

d su

itabl

e an

d de

dica

ted

pers

onne

l to

hand

le th

e ca

se?

(2)

Has

th

e C

ompa

ny

esta

blis

hed

the

stan

dard

op

erat

ing

proc

edur

es

for

inve

stig

atin

g th

e re

porte

d ca

se, a

s w

ell

as re

leva

nt c

onfid

entia

lity

mec

hani

sms?

(3)

Has

the

Com

pany

ado

pted

mea

sure

s to

pr

otec

t th

e w

hist

le-b

low

er a

gain

st a

ny

inad

equa

te tr

eatm

ent c

ause

d th

ereb

y?

○ ○ ○

(1)

The

Com

pany

en

cour

ages

w

hist

le-b

low

ing

on

unet

hica

l or

im

prop

er b

ehav

iors

by

both

int

erna

l an

d ex

tern

al p

erso

nnel

. D

isci

plin

ary

actio

ns s

hall

be e

nfor

ced,

how

ever

, if

any

of t

he

inte

rnal

per

sonn

el i

s in

volv

ed i

n fa

lse

or m

alic

ious

alle

gatio

n.

The

Com

pany

has

est

ablis

hed

inde

pend

ent m

ailb

ox a

nd h

otlin

e fo

r whi

stle

-blo

win

g, w

hich

hav

e be

en a

nnou

nced

on

the

offic

ial

web

site

and

int

rane

t of

the

Com

pan y

, an

d ha

ve i

llust

rate

d th

e re

quire

d in

form

atio

n w

hich

the

whi

stle-

blow

ers n

eed

to p

rovi

de.

The

Hum

an R

esou

rces

uni

t sha

ll be

the

dedi

cate

d bu

sine

ss u

nit

to h

andl

e th

e m

atte

rs re

latin

g to

whi

stle

-blo

win

g.

(2)

The

pers

onne

l re

spon

sibl

e to

han

dle

whi

stle

-blo

win

g re

late

d m

atte

rs

shal

l is

sue

writ

ten

decl

arat

ion

guar

ante

eing

th

e co

nfid

entia

lity

of th

e id

entit

y of

whi

stle

-blo

wer

s and

the

cont

ent

of re

porte

d ca

ses.

(3)

The

Com

pany

wou

ld u

nder

take

to p

rote

ct w

hist

le-b

low

ers

from

in

appr

opria

te d

isci

plin

ary

actio

ns d

ue to

thei

r whi

stle-

blow

ing.

Non

e

Non

e

Non

e


Eval

uatio

n Ite

m

Impl

emen

tatio

n St

atus

(Not

e 1)

D

evia

tions

from

“th

e Et

hica

l C

orpo

rate

Man

agem

ent

Bes

t-Pra

ctic

e Pr

inci

ples

for

TWSE

/TPE

x Li

sted

C

ompa

nies

” an

d R

easo

ns

Yes

No

Brie

f Illu

stra

tion

4. S

treng

then

Info

rmat

ion

Disc

losu

re

(1)

Has

th

e C

ompa

ny

anno

unce

d on

its

w

ebsi

te

and

the

Mar

ket

Obs

erva

tion

Post

Sys

tem

its

Prin

cipl

es f

or E

thic

al

Cor

pora

te

Man

agem

ent

and

its

achi

evem

ents

in

im

plem

entin

g th

e Pr

inci

ples

?

○

Th

e C

ompa

ny's

"Eth

ical

C

orpo

rat e

M

anag

emen

t B

est

Prac

tice

Prin

cipl

es"

and

impl

emen

tatio

n st

atus

fo

r th

e ye

ar

have

be

en

disc

lose

d on

the

offi

cial

web

site

of

the

Com

pany

, th

e M

arke

t O

bser

vatio

n Po

st S

yste

m a

nd th

e an

nual

repo

rt.

Non

e

5.

If th

e co

mpa

ny h

as e

stab

lishe

d th

e et

hica

l cor

pora

te m

anag

emen

t pol

icie

s bas

ed o

n th

e Et

hica

l Cor

pora

te M

anag

emen

t Bes

t-Pra

ctic

e Pr

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F. Material Resolutions of Shareholders Meeting and Board of Directors Meeting

(I) Material Resolutions of Shareholders Meeting

Date Major Resolutions Execution

May 27, 2016

The amendment of the “Articles of Incorporation”.

The amended Articles of Incorporation has been approved by Commerce Department, Ministry of Economic Affairs and registered (No. 10501127790) and the related actions on behalf of the Company have been conducted in accordance with revised Article of Incorporation.

Approval of the distribution of earnings of the year 2015. Cash Dividends: NT$393,592,500. Cash dividend per share NT$0.7.

1. The Board Meeting convened on May 27, 2016 resolved the record date for distribution of cash dividends on Jun. 20, 2016 and payment date on Jul. 8, 2016.

2. The cash dividend was distributed on Jul. 8, 2016.

(II) Material Resolutions of Board of Directors Meeting

Date Major Proposals

Jan. 29,2016

(1) To stipulate the date and venue for the 2016 Annual General Meeting of Shareholders.

(2) To approve the 2015 year-end bonus to managers. (3) To approve the 2015 year-end bonus to the Chairman and Vice Chairman.

Mar. 17, 2016

(1) To amend Articles of Incorporation. (2) To amend Compensation Structure and Performance Incentive System for

Managers, and re-named it as Regulation of Payment for Managers. (3) To approve the 2015 employees’ compensation. (4) To amend Compensation Structure and Performance Incentive System for

Directors, and re-named it as Regulation of Payment for Directors. (5) To approve the 2015 remuneration of Directors. (6) To approve the Business Report of the year 2015. (7) To approve the Financial Statements of the year 2015. (8) To approve the distribution of earnings of the year 2015. (9) To amend Accounting Policy. (10) To appoint the Company's Certified Public Accountants and approve the

remuneration. (11) To engage PricerwaterhouseCoopers for International Financial Reporting

Standards No. 9 "Financial Instruments" Agreement Procedure Project Services.

(12) To change the authorized persons of foreign investment custodian



institution. (13) To amend the Internal Control System and Internal Audit Implementation

Rules and Internal Control System of Shareholder Services. (14) To approve the 2015 Internal Control Statement. (15) To approve the audit report of financial derivatives transactions of the

fourth quarter of 2015. (16) To approve the change of the accounting officer.

Apr. 27, 2016

(1) To amend the Internal Control System and Internal Audit Implementation Rules.

(2) To approve the Corporate Social Responsibility Report of 2015. (3) To approve the change of the internal audit officer. (4) To approve the change of the risk manager.

May 27, 2016

(1) To approve the audit report of financial derivatives transactions of the first quarter of 2016.


(3) To establish the operational procedures of major loss on disclosure standard and the evaluation of its ongoing changes.

(4) To establish the Procedural Guidelines Governing Financial and Business Matters Between this Corporation and its Affiliated Enterprises and Firewall Mechanisms.

(5) To resolve the record date for distribution of cash dividends is on Jun. 20, 2016 and payment date is on Jul. 8, 2016.

(6) To reassign the Company’s senior executive who administrates the derivatives transactions.

Jun. 30, 2016 To reassign the President as the Company’s senior executive who administrates the derivatives transactions.

Aug. 2, 2016

(1) To approve the Financial Statements of the first half of year 2016. (2) To establish “Procedures for Collecting, Processing or Using Personal

Information of Medical Treatment and Health Examination”. (3) To amend “Plans of Security Measures for Personal Information File and

Disposal Measures for Personal Information after Termination of Business”.


(5) To appoint the external reviewing actuary.

Oct.27, 2016


(2) To approve the audit report of financial derivatives transactions of the second quarter of 2016.

(3) To amend “Directions Governing Anti-Money Laundering and Countering Terrorism Financing”.

(4) To amend “Standard Operating Procedures of Regulatory Compliance in Money Laundering Control”.

(5) To establish Governing Policy of Anti-Money Laundering and Countering Terrorism Financing.



(6) To amend the Risk Management Policy and Procedure Guidelines, Risk Management Operational Procedures, and Risk Management Mechanisms.

(7) To approve the Risk Appetite and Risk Tolerance of 2017.

Dec. 28, 2016

(1) To approve Business Plan and Budget for the year 2017. (2) To amend Accounting System. (3) To amend the Internal Control System and Internal Audit Implementation

Rules. (4) To amend “Corporate Governance Best Practice Principles”. (5) To approve the audit report of financial derivatives transactions of the third

quarter of 2016. (6) To approve the 2017 Annual Audit Plan. (7) To approve 2017 Annual Regulatory Compliance Plan. (8) To renew the Directors’ and Officers’ Liability Insurance. (9) To use "Regulation of Payment for Managers" continuously. (10) To approve the 2017 remuneration for managers. (11) To use "Regulation of Payment for Directors" continuously. (12) To approve 2017 remuneration for the Chairman and Vice Chairman. (13) To approve 2017 transportation allowances for the Directors. (14) To approve 2017 remuneration and transportation allowances of functional

committee for the Independent Directors.

Jun. 24, 2017

(1) To propose to elect the directors in the 2017 Annual General Meeting of Shareholders.

(2) To propose to lift restriction of non-competition of newly elected directors in the 2017 Annual General Meeting of Shareholders.

(3) To stipulate the date and venue for the 2017 Annual General Meeting of Shareholders.

(4) To approve the 2016 year-end bonus to managers. (5) To approve the 2016 year-end bonus to the Chairman and Vice Chairman.

Mar. 22, 2017

(1) To approve the 2016 employees’ compensation. (2) To approve the 2016 remuneration of directors. (3) To approve the Business Report of the year 2016. (4) To approve the Financial Statements of the year 2016. (5) To approve the distribution of earnings of the year 2016. (6) To appoint the Company's Certified Public Accountants and approve the

remuneration. (7) To engage PricerwaterhouseCoopers for International Financial Reporting

Standards No. 9 "Financial Instruments" Agreement Procedure Project Services.

(8) To approve the audit report of financial derivatives transactions of the fourth quarter of 2016.

(9) To amend the Internal Control System and Internal Audit Implementation Rules and Internal Control System of Shareholder Services.

(10) To approve the 2016 Internal Control Statement. (11) To amend “Directions Governing Anti-Money Laundering and Countering

Terrorism Financing”.


G. Information on CPA Professional Fees and Replacement of Certified Public Accountant

(I) Audit Fee

1. The non-audit fee paid to certified CPA, certified office of CPA and affiliated

companies account for over 1/4 to audit fee: None. 2. Alter the CPA Firm and the audit fee in altering year is less than that in the previous

year: None. 3. The audit fee is reduced by over 15% compared with the previous year: None.

(II) Replacement of CPA

1. Regarding the former CPA

NT$ thousands

Accounting Firm

Name of CPA

Audit Fee

Non-audit Fee Period

Covered by CPA’s Audit

Remarks System

of Design

Company Registration

Human Resource

Others Subtotal

Pricewaterhouse Coopers, Taiwan

Chen, Hsien-I

4,562 - - - - -

2016/01/01 ~

2016/12/31

Lai, Chung-

Hsi

Replacement Date March 17, 2016(Date of the Board of Directors Resolution)

Replacement reasons and explanations Due to internal adjustments of PwC Taiwan.

Describe whether the Company terminated or the CPA did not accept the appointment

Parties Status CPA The Company

Termination of appointment

Note Note

No longer accepted (continued) appointment

Note Note


Note: Due to internal adjustments of PwC Taiwan, the CPAs of Central Re were changed beginning 1st Quarter, 2016.

2. Regarding the successor CPA

Name of accounting firm PricewaterhouseCoopers, Taiwan

Name of CPA Chen, Hsien-I and Lai, Chung-Hsi

Date of appointment Note Consultation results and opinions on accounting treatments or principles with respect to specified transactions and the company's financial reports that the CPA might issue prior to the engagement.

None

Succeeding CPA’s written opinion of disagreement toward the former CPA None

Note: Due to internal adjustments of PwC Taiwan, the CPAs of Central Re were changed beginning 1st Quarter, 2016.

3. Reply of the Previous Accountant: None.

Other issues (except for unqualified issues) in the audit reports within the last two years

None

Differences with the company

Yes

- Accounting principles or practices - Disclosure of Financial Statements - Audit scope or steps - Others

None Note Remarks/specify details:

Other Revealed Matters

None


H. Changes in Shareholdings and Shares Pledged by Directors, Managers and Major Shareholders

Title Name

2016 As of April, 2,2017

Increase (Decrease) In Shareholding

Increase (Decrease)

Share Pledged


Increase (Decrease)

Share Pledged

Chairman

Evergreen International Corp. 0 0 0 0

Representative: Yang, Cheng-Tui 0 0 0 0

Vice Chairman


Representative: Chang, Kuo-Cheng

0 0 0 0

Independent Director Yau, Sea-Wain 0 0 0 0

Independent Director Tsen, Ron-Syou 0 0 0 0

Independent Director Chou, Yu-Cheng 0 0 0 0

Director

Ministry of Finance, R.O.C. (241,000) 0 (1,125,000) 0

Representative: Lee, Yi-Fen

0 0 0 0

Representative: Chen, Kuan-Pao 0 0 0 0

Director


Representative: Tai, Jiin-Chyuan 0 0 0 0

Representative: Ku Lai, Mei-Hsueh

0 0 0 0

President Juang, Chong-Tsang 0 0 0 0

Major Shareholder

Ministry of Finance, R.O.C. (241,000) 0 (1,125,000) 0

Major Shareholder



Title Name

2016 As of April, 2,2017


Increase (Decrease)

Share Pledged


Increase (Decrease)

Share Pledged

Executive Vice President Tsai, Bai-Long 0 0 0 0

Chief Auditor (Note 1) Lin, Cheng-Yen 0 0 0 0

Executive Vice President

(Financial Officer) Cheng, Ching-Fen 0 0 0 0

Senior Vice President Chang, Yung-Ning 0 0 0 0

Appointed Actuary (Senior Vice President)

Lin, Yu-Te 0 0 0 0

Senior Vice President Chung, Chih-Hung 0 0 0 0

Deputy Senior Vice President Hsu, Tzu-Cheng 0 0 0 0

Deputy Senior Vice President Hsiung, Pei-Ching 0 0 0 0

Deputy Senior Vice President Ting, Wen-Cheng 0 0 0 0

Deputy Senior Vice President Liu, Yu-Hsueh 0 0 0 0

Deputy Junior Vice President

(Principal Accounting

Officer) (Note 2)

Yeh, Shih-Hsuan 0 0 0 0

Note 1. Lin, Cheng-Yen was appointed as Chief Auditor from July 1, 2016. 2. Yeh, Shih-Hsuan was appointed as Principal Accounting Officer from April 1, 2016.


FOUR. CAPITAL OVERVIEW

A. Source of Capital Stock

(I) Issued Share

thousand shares / NT$ thousands

Month/ Year

Par Value (NTD)

Authorized Capital Paid-in Capital Remark

Shares Amount Shares Amount Sources of Capital

Capital Increased

by Assets Other

than Cash

08/2007 10 600,000 6,000,000 525,000 5,250,000 Capitalization of retained earnings 250,000

None


None


None

(II) Type of Stock

thousand shares / NT$ thousands

Share Type Authorized Capital

Remarks Issued Shares Un-issued Shares Total Shares

Common Shares 562,275 37,725 600,000

Based on Total Shares

Outstanding as of

April 2, 2017


B. Shareholders Structure As of April 2, 2017

Item Government Agencies

Financial Institutions

Other Juridical Person

Domestic Natural Persons

Foreign Institutions &

Natural Persons

Total

Number of Shareholders 1 3 38 8,420 34 8,496

Shareholding (shares) 123,266,689 81,020 337,187,159 90,369,256 11,370,876 562,275,000

Percentage 21.92% 0.01% 59.98% 16.07% 2.02% 100%

C. Diffusion of Ownership and List of Principal Shareholders

(I) Diffusion of Ownership (Common Shares) As of April 2, 2017

Range of Shareholdings Number of

Shareholders Number of Shares Holding (%)

1 - 999 2,678 318,250 0.06

1,000 - 5,000 3,525 7,691,670 1.37

5,001 - 10,000 910 6,728,256 1.20

10,001 - 15,000 414 4,935,227 0.88

15,001 - 20,000 230 4,155,113 0.74

20,001 - 30,000 244 5,936,862 1.06

30,001 - 50,000 195 7,503,826 1.33

50,001 - 100,000 148 10,302,360 1.83

100,001 - 200,000 77 10,414,508 1.85

200,001 - 400,000 35 10,352,086 1.84

400,001 - 600,000 14 6,638,359 1.18

600,001 - 800,000 6 3,933,183 0.70

800,001 - 1,000,000 2 1,690,600 0.30

1,000,001 and above 18 481,674,700 85.66

Total 8,496 562,275,000 100


(II) List of Principal Shareholders

D. Disclosure of the Share Prices and Related Information for the Past Two Fiscal Years

NT$ Year

Items 2016 2015 01/01/2017~ 04/02/2017

(Note2) Market Prices per Share

Highest 16.30 18.00 15.55

Lowest 13.55 13.65 14.40

Average 14.56 16.45 15.06 Net Worth per Share

Before Distribution 16.89 16.63 NA

After Distribution (Note1) 15.93 NA Earnings per Share

Weighted Average Shares 562,275,000 562,275,000 NA Diluted Earnings per Share 1.36 1.36 NA

Adjusted Diluted Earnings per Share (Note1) 1.36 NA

Dividends per Share Cash Dividends (Note1) 0.70 NA

Stock Dividends

Dividends from Retained Earnings (Note1) - NA

As of April 2, 2017

Shareholding Entity

Number of Shares Holding (%)

Evergreen International Corp. 197,541,037 35.13

Ministry of Finance, R.O.C. 123,266,689 21.92

Evergreen International Storage & Transport Corp. 48,788,966 8.68

Evergreen Marine Corp. (Taiwan) Ltd. 47,491,873 8.45

EVA Airways Corp. 33,526,675 5.96

EFG Bank 6,967,707 1.24

Chang, Kuo-Cheng 6,541,899 1.16

Tsai, Han-Chang 3,303,076 0.59

Hsiang-Li Investment Corp. 2,610,040 0.46

Jung, Ji-Cheng 1,975,000 0.35


Year Items 2016 2015

01/01/2017~ 04/02/2017

(Note2)

Dividends from Capital Surplus (Note1) - NA

Accumulated Undistributed Dividends (Note1) - NA

Return on Investment Price/Earnings Ratio 10.50 11.84 NA Price/Dividend Ratio (Note1) 23.00 NA Cash Dividend Yield Rate (Note1) 4.35% NA

Note: 1. Earnings distribution for 2016 has not yet been ratified at the stockholders’ meeting as of the

reporting date. 2. As of the reporting date, the Company did not have the latest financial information audited or

reviewed by CPA in the current year.

E. Dividend Policy and Earnings Distribution Implementation Status

(I) Dividend Policy

Under the Company's Articles of Incorporation, the current year's earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 20% of the remaining amount shall be set aside as legal reserve. Afterwards, the Company shall recognize or reverse special reserve in accordance with regulations, and accumulated unappropriated earnings of the prior period. Appropriation of the remainder shall be proposed by the Board of Directors and resolved by the stockholders.

The Company’s dividends are distributed in the form of cash dividends and

stock dividends in a coordinated way, among which, the cash dividends shall

account for at least 50% of the total dividends distributed.

(II) Earnings Distribution Implementation Status

On March 22, 2017, the Board of Directors proposed that total dividends for the

distribution of earnings for 2016 was $281,138 thousand (cash dividend of

$0.50 (in dollars) per share). Earnings distribution for 2016 has not yet been

ratified at the stockholders’ meeting as of the reporting date.


FIVE. BUSINESS OPERATIONS OVERVIEW

A. Business Activities

(I) Business Scope

1. Breakdown by Source NT$ thousands

Gross Premium Written

Year Item

2016 2015

Amount Percentage (%) Amount Percentage

(%) Domestic Non-Life Business 8,751,585 62.33 8,315,563 58.58 Domestic Life Business 3,884,165 27.66 4,361,695 30.73 Subtotal 12,635,750 89.99 12,677,258 89.31 International Non-Life Business 1,320,010 9.40 1,444,541 10.18 International Life Business 85,991 0.61 72,491 0.51 Subtotal 1,406,001 10.01 1,517,032 10.69

Total 14,041,751 100.00 14,194,290 100.00

2. Breakdown by Line

NT$ thousands Gross Premium Written

Year Line

2016 2015


(%) Fire 1,628,941 11.60 1,688,744 11.90 Marine Hull 295,891 2.11 330,286 2.33 Marine Cargo 336,780 2.40 393,372 2.77 Automobile 3,603,033 25.65 3,319,786 23.39 Aviation 8,240 0.06 3,425 0.02 Engineering 280,200 2.00 261,745 1.84 Miscellaneous Casualty 1,404,796 10.00 1,361,784 9.59 Fish Vessel 49,750 0.35 23,230 0.16 Compulsory Automobile Liability 1,453,627 10.35 1,414,125 9.96 Compulsory Motorcycle liability 958,367 6.83 912,379 6.43 Residential Earthquake 51,970 0.37 51,228 0.36 Life 2,285,907 16.28 2,325,930 16.39 Personal Accident 644,091 4.59 763,239 5.38 Health 1,040,158 7.41 1,345,017 9.48

Total 14,041,751 100.00 14,194,290 100.00


3. New Products, Potential Customers and Markets

(1) Domestic Non-Life Business

In respect of domestic non-life insurance business, the government is now

actively developing the "Agricultural Insurance Act". Insurance

Companies are encouraged to develop and underwrite new products on

agricultural insurance. The government also endeavors to incorporate

public bikes, which are very popular in recent years, into the coverage of

casualty insurance and liability insurance policies to cover the potential

loss of bicycle rider or any third parties. To facilitate its business

development, the Company will also provide timely services to its

customers in various aspects including new product design, underwriting

techniques training and claim consultancy services.

(2) Domestic Life Business

As for domestic life insurance business, the competent authority has

implemented various initiatives to keep pace with the rapid prevalence of

Internet. These measures include: further expanding the scope of online

insurance business, encouraging financing technology innovation, as well

as R&D efforts on innovative insurance products and services such as

health management insurance products with spillover effect. Also, the

aging society and the low birth rate have both led to increased demand for

long-term care and health related insurance products such as disability

support insurance and specific disease insurance. To pursue business

diversification, the Company will also, on a timely basis, offer varieties of

new services such as professional consultancy on new products, building

up and providing information on incidence rates or experience rates, etc.

(3) International Non-life Business

For International business, China, Japan and South Korea are our core

markets and we prudently expand business in these markets. On the other

hand, we keep exploring other potential market to diversify and optimize

our portfolio.


(II) Industry Overview

1. Market Player

According to statistics released by the Insurance Bureau at the end of 2016, there

were 54 insurance companies in Taiwan, of which 28 were life insurance

companies, 23 were non-life insurance companies and 3 were reinsurance

companies. Out of the 28 life insurance companies, 23 were domestic companies

while 5 were branches of foreign companies. The 23 non-life insurance companies

include 17 domestic and 6 foreign companies. Number of Insurance Companies in Taiwan over the Past Five Years

Year Total Reinsurance

Non-Life Insurance Life Insurance Local Foreign Local Foreign

Headquarter Branch Offshore Branch

Branch in

Taiwan

Liaison Office in Taiwan

Headquarter Branch Offshore Branch

Branch in

Taiwan

Liaison Office

in Taiwan

2012 57 3 17 164 11 6 9 24 129 13 7 3

2013 56 3 17 164 12 6 9 24 123 13 6 3

2014 54 3 17 165 10 5 8 24 123 13 5 2

2015 54 3 17 165 10 5 8 24 123 13 5 2

2016 54 3 17 164 9 6 8 23 125 14 5 1

Source Insurance Bureau, Financial Supervisory Commission

2. Gross Premium Written

The gross premium written of the domestic insurance industry during 2016 was

NT$3,279,319 million, a rise of 7.07% over the previous year. Non-life insurance

gross premium written accounted for NT$145,962 million, a rise of 7.23% over the

previous year. Total life insurance gross premium written was NT$3,133,357

million, a rise of 7.06% over 2015. NT$ millions

Gross Premium Written over the Past Five Years

Year Insurance Industry Non-Life

Insurance Life

Insurance Premium Income: Non-Life vs. Life

Insurance Amount Growth Rate (%) Amount Growth Rate

(%) Amount Growth Rate (%)

2012 2,598,831 12.44 120,483 6.59 2,478,348 12.75 1:20.6

2013 2,708,436 4.22 124,904 3.67 2,583,532 4.24 1:20.7

2014 2,903,350 7.20 132,220 5.86 2,771,130 7.26 1:21.0

2015 3,062,796 5.49 136,119 2.95 2,926,677 5.61 1:21.5

2016 3,279,319 7.07 145,962 7.23 3,133,357 7.06 1:21.5 Source: Taiwan Insurance Institute


3. Long-Term and Short-Term Business Plans

(1) Long-Term Plan

The vision is to become the best professional reinsurer in Asia. To achieve

this purpose, the Company has established its long term business

development plan as follows:

a. Continue cultivating domestic market; achieve good business

performance on a long-term basis by optimizing the domestic

resources.

b. Steadily expand international business; optimize the business portfolio;

consolidate resources for developing international facultative

reinsurance business; strengthen quality control to grow overseas

business, both in terms of quality and quantity.

c. Provide customer-oriented services to increase service effectiveness

and customer satisfaction.

d. Steadily improve the efficiency of fund utilization; enhance fund

structure management to ensure the sustainable management of the

Company.

e. Enhance compliance and internal audit/control procedures; strengthen

risk management; implement good corporate governance.

f. Fulfill corporate social responsibilities; achieve sound ethical corporate

management to facilitate the continuous development of the insurance

market.

g. Devote to talent development to create motivating visions for

employees.

(2) Short-Term Plan

� Domestic Reinsurance Business

a. Identify customer needs and actively take high-quality business

through our market advantages in the local market and tailored service.

The objective is continued expand our local market.


b. Keep up with the opportunity for pools or coinsurance to expand our

business scope and underwriting profit.

c. Continue with our prudent underwriting standards and ensure proper

control over catastrophe risks to maintain stable underwriting profit.

d. Provide various professional services to tighten customer relationship

and build up the professional image of the company.

� International Reinsurance Business

a. Prudently expand international business and diversify the risk of

geographical concentration; achieve cost reduction on international

insurance business through international business branch.

b. Build up a profit-oriented culture; ensure proper control on

accumulated risks; continuously monitor the quality of business and

ensure there is sufficient consideration to support the risk/return of the

business. The purpose is to establish the best business portfolio in both

quality and quantity.

c. Design suitable retrocession programs on areas or portfolios with

higher catastrophe risks to reduce the fluctuation in business

performance.

d. Gradually increase direct business; in the meantime develop the small

and medium size clients’ market. The purpose is to improve the

business quality and the transparency of underwriting information.

e. Develop high-quality facultative insurance business through

strengthening employees' professional expertise in underwriting to

enhance profitability

� Fund utilization

The Company shall continue adopting a prudent strategy for fund

utilization, supported by strict risk control. The purpose is to improve

asset quality and the efficiency of fund utilization. The Company

pursues safe and stable profits, thereby supporting the sustainable

development of the reinsurance industry.


B. Market Overview

(I) Breakdown by Region TN$ thousands

Year

Region

2016 2015


(%) Domestic Inward Business 12,635,750 89.99 12,677,258 89.31

Overseas Inward Business 1,406,001 10.01 1,517,032 10.69

Total 14,041,751 100.00 14,194,290 100.00

(II) Market Share

In Taiwan market, our market share at the end of 2016 is as follows.

NT$ millions Year

Item Non-Life Insurance

Life Insurance

Written Premium 145,962 3,133,357 Outward Premium 46,611 18,717 Cession Rate (%) 31.93 0.6 Central Re's Inward 8,752 3,884 Our Market Share (%) 18.78 20.75

(III) Market Development

1. Domestic Non-Life Business

The government has amended various insurance-related regulations. This fact,

along with the launch of products initiated by the government and the steady

growth in the automobile sales in recent years, are believed to have positive

influence on the gross premium written of the non-life insurance industry.

Looking forward to 2017, gross premium written in the non-life insurance

company is expected to continue growing. Reasonable underwriting profit is

predicted subject to that there is no major large loss in the market.

2. Domestic Life Business

The gradual warm-up of global economy and the expected interest rate rise

will both lead to the back flow of funds to the investment market. The key


products in the life insurance industry, therefore, is expected to be shifted to

the USD-denominated foreign currency policies and investment-linked

products. The competent authority, furthermore, has launched the Phase 5

deregulation for online insurance, including relaxing the identity verification

mechanism, expanding the product types for online insurance, allowing life

insurance companies to operate e-policies and accepting premium payments

through the mobile-payment or e-payment mechanisms etc. These initiatives

are implemented to expand the e-commerce scope for the insurance industry.

Because of the diversification of protection insurance products and convenient

application of sales channels, further growth of the reinsurance business is

anticipated.

3. International Non-life Business

After several catastrophes in 2011 such as Japan Tohoku Earthquake,

Christchurch Earthquake and Thailand Flood, the renewal prices had

substantially increased, with terms improved in the following years. At the

same time, more and more new underwriting capacity were accumulated and

injected into the market. However, with less natural perils activities over

recent years, global market insurance losses were considerably reduced and

excessive underwriting capacity were accumulated. The reinsurance pricing

remains soft and competition are heating up. As a result, the profit margins of

some insurance and reinsurance companies were affected. If no severe

catastrophe occurs in the near future, this trend is expected to continue for a

period of time.


C. Human Resources

Employee data and shares of education degrees are shown as follows:

Year 2016 2015 Data as of April 2, 2017

Number of Employees 129 132 129

Average Age 40.71 40.42 41.31

Average Years of Service 10.40 10.28 10.50

Education (%)

Masters 43.41 43.94 42.63

University or College 55.81 55.30 56.59

Others 0.78 0.76 0.78 Note: The number of full-time employees includes 1 person, who applied the parental leave without

pay till April, 2017.

D. Labor Relations

� The Company’s implementation status of employee benefit plans, on-job

training, continuing education and retirement systems; the status of

labor-management agreements and measures for preserving employees' rights

and interests are listed in the following.

1. Employee benefit plans:

(1) Leave Policies: According to the Labor Standards Act, employees are

entitled to annual leave.

(2) Employee Insurances: Employees are covered by labor insurance, national

health insurance and travel insurance on overseas business trips.

(3) Health Care: The Company offers employee physical examination

programs on a regular basis to ensure the physical health of its employees

(including physical examination for new employees).

(4) On-job training and Continuing education: The Company encourages its

employees to elevate their professional abilities. In 2016, it totals 368

attendances to attend various domestic reinsurance, finance, or risk

management courses. The Company also holds internal professional

trainings, and inspires employees to acquire professional certifications and

licenses in order to self-improvement. Please refer to page 7 for details.


(5) Bonus: The Company distributes year-end bonus.

(6) Employee Rewards: The Company distributes employee rewards based on

the profit earned during the year and in accordance with the percentage

stipulated in the Company's articles of incorporation. The proposed

employee reward scheme shall be approved by the board of directors and

reported to the shareholders at annual general meeting.

(7) The Company has instituted the employee welfare committee to facilitate

the promotion of employee welfare. The Company allocates employee

welfare funds on a monthly basis, being a fixed percentage of its sales

amount and employee payroll. The welfare funds are used to administer

various employee welfare projects.

(8) Varieties of cash gifts and subsidies: The Company provides cash gifts

and subsidies in various occasions, including monetary payments and

subsidies for wedding and funerals, as well as sympathy money for illness

or injuries.

2. Retirement system:

In accordance with the Labor Standards Law and the Regulations Governing

Retirement, Indemnity and Severance of Employees, the Company

continuously appropriates labor retirement reserve fund each month and

deposits it in the Bank of Taiwan. At the same time, the Company also

instituted the pension fund monitoring committee to administer this

retirement fund.

After enforcing of Labor Pension Act on July 1, 2005, the amount of labor

pension borne by the Company for employees who choose to be applicable to

the pension system in the Act is six percent of the monthly wage. The

pension fund is submitted to the Bureau of Labor Insurance and deposited

into the respective pension fund account of employees.

3. Labor-management agreement:

The Company regularly holds the labor-management meetings to ensure

efficient communication between the employees and the employer. Up to

now, the communication runs smoothly.


4. Measures for preserving employees' rights and interests:

The Company sets forth the human resource regulations in accordance with

the Labor Standards Act and Act of Gender Equality in Employment and so

on. In addition, the Company establishes dedicated mailbox and telephone

line to receive employee grievance for company’s policies, operational

opinions or any loss of employee’s rights and interests. The purposes are to

increase two-way communication, solve problem quickly and prevent

problem from occurring.

� The loss suffered due to labor conflicts during the recent one year as at the date the annual report is printed, and the estimated amount for current and potential conflicts as well as the measures to deal with these issues:

1. As at the date the latest annual report is printed, the Company does not have

any loss caused by labor conflicts during the recent year.

2. Estimated amount for current and potential conflicts as well as the measures

to deal with these issues:

The Company has well-established management and welfare systems, and

has been actively promoting employer/employee cooperation. It has

maintained a harmonious employer/employee relationship. So far, the

Company has not suffered from any loss caused by labor conflicts. It is very

unlikely that the Company would suffer from any loss caused by labor

conflicts in future.

� Employee code of conduct or ethical principles, as well as the protective measures on environmental and personal safety.

1. Employee code of conduct or ethical principles:

The Company has established the code of ethical conducts, which shall be

followed by all directors and employees. According to the work rules of the

Company, employees are required to observe the following service

guidelines:

(1) Obey the policies and rules of the Company and follow the reasonable

guidance of the supervisors at different management levels.

(2) Be dedicated to individual job responsibilities, maintain good order at

work, and demonstrate team spirit to improve work efficiency.


(3) Preserve the good reputation of the Company. The employee should

report to the direct supervisor immediately on discovering any matters

which may adversely impact the reputation of the Company.

Concealment of facts is prohibited.

(4) Any job reports should be made in accordance with the hierarchy of

authority and responsibility. Bypassing the direct supervisor to report is

prohibited. This shall not apply, however, in special cases or

emergencies.

(5) Supervisors should show respect and care to their subordinates and

provide suitable guidance thereto.

(6) Employees should cherish the public facilities and avoid waste of

money.

(7) Employees are not allowed to work for other employers unless required

by law or approved by the Company.

2. Personal and Environmental Safety:

(1) The main workplace of the Company is located in the Central

Reinsurance Building, Nanjing East Road of Taipei City. The office

building is featured by convenient transportation and high-quality work

environment.

(2) To provide a safe working environment and ensure the personal security

of its employees, the users of the office building has organized building

management committee. The committee conducts regular fire safety and

public utility inspections. Security systems and access control which the

Company has also installed these are available in the office areas.

(3) The Company has organized a Self-Defense Fire Protection Team based

on its "Fire Protection Plan", responsible to handle relevant issues in the

building. The Company also organized internal labor safety training and

fire-drill on a yearly basis. A disaster reporting system has been

established to minimize the loss.

(4) The Company has established the “Regulations for Prevention,


Correction, Complaint and Punishment of Sexual Harassment at

Workplace”. Dedicated grievance instruments (including hotlines,

dedicated fax lines and e-mail box) are available. The Company has

disclosed relevant information on both its intranet and external website.

(5) In terms of health care, the Company has arranged labor insurance and

national health insurance for its employees. For employees taking

overseas business trips, the company also arranges travel insurances and

additional medical insurances. The Company also provides employee

physical examination programs and medical consulting services.

(6) The Company has established its Regulations for Energy Saving and

Carbon Reduction to fulfill its environmental protection objectives.

Regular inspections are conducted to monitor the carbon dioxide

concentration in the offices. Water quality test on drinking machines are

also carried out in respective floors of the office building.

(7) The Company has established its "Labor Safety and Health Work Rules"

and the annual occupational safety and health management plan as the

guidelines for administering relevant employee health and safety

matters.

E. Important Contracts

(I) Non-Life Business

Type of Contract

Counterparty Period Major Contents Restrictions

Reinsurance Contracts

Domestic and overseas non-life insurance companies

2016.1.1-2016.12.31

Non-life reinsurance inward businesses

Some contracts include exclusion clauses

Overseas non-life insurance companies 2016.4.1-2017.3.31



Retrocession Contracts

Domestic and overseas non-life insurance companies

2016.1.1-2016.12.31

Non-life reinsurance outward businesses



Type of Contract

Counterparty Period Major Contents Restrictions

Overseas non-life reinsurance companies

2016.1.1-2016.12.31

Non-life reinsurance outward businesses



2016.1.1-2016.12.31




2016.4.1-2017.3.31



Catastrophe Reinsurance Contracts


2016.2.1-2017.1.31

To protect our domestic net retention excess catastrophe losses

The contracts include exclusion clauses


2016.12.1-2017.11.30

To protect our overseas net retention excess catastrophe losses


(II) Life Business

Type of Contract Counterparty Period Major Contents Restrictions

Reinsurance Contracts

Domestic and overseas life insurance companies

2016.1.1-2016.12.31 Life reinsurance inward businesses


Retrocession Contracts (Non-Cat)

Domestic life insurance companies 2016.1.1-2016.12.31 Life reinsurance

outward businesses


Overseas life reinsurance companies 2016.1.1-2016.12.31 Life reinsurance

outward businesses


Overseas life reinsurance companies 2016.4.1-2017.3.31

Life retrocession inward businesses


Catastrophe Reinsurance Contracts (Cat)

Overseas life reinsurance companies 2016.2.1-2017.1.31

To protect our domestic net retention excess catastrophe losses



SIX. FINANCIAL INFORMATION

A. Financial Statement for Recent Five Years

(I) Condensed balance sheets and statements of comprehensive income for the past five fiscal years

1. Condensed Balance Sheets: Adoption of IFRSs

NT$ thousands Year

Items

From 2012 To 2016 (Note 1) 01/01/2017 ~04/02/2017

(Note3) 2016 2015 2014 2013 2012

Cash and Cash Equivalents 15,588,709 16,461,567 18,430,910 17,673,887 17,008,182 NA

Account Receivable 116,044 248,065 399,901 183,877 310,154 NA

Financial Assets 12,908,694 11,698,239 9,909,822 9,814,286 9,617,139 NA

Reinsurance Contract Assets 3,624,254 3,455,783 3,859,592 3,877,374 3,490,724 NA

Property and Equipment 208,193 213,444 214,772 203,973 207,133 NA

Intangible Assets 2,480 3,786 1,531 2,142 3,438 NA

Other Assets 1,139,858 1,184,187 1,192,639 1,181,693 1,463,858 NA

Total Assets 33,588,232 33,265,071 34,009,167 32,937,232 32,100,628 NA

Account Payable 317,140 425,192 577,906 393,767 852,881 NA

Financial Liabilities 25,879 31,549 66,470 11,785 1,266 NA

Insurance Liabilities 23,594,638 23,279,625 23,664,460 23,382,630 23,090,610 NA

Provisions 3,142 8,015 5,778 772 0 NA

Other Liabilities 148,224 171,209 237,637 114,730 161,950 NA

Total Liabilities Before Distribution 24,089,023 23,915,590 24,552,251 23,903,684 24,106,707 NA

After Distribution (Note 2) 24,309,183 25,226,981 24,578,414 24,382,332 NA

Capital 5,622,750 5,622,750 5,622,750 5,622,750 5,512,500 NA

Capital Reserve 300,000 300,000 300,000 300,000 300,000 NA

Retained

Earnings

Before Distribution 3,834,455 3,459,020 3,369,901 3,178,535 2,833,627 NA

After Distribution (Note 2) 3,065,427 2,695,171 2,503,805 2,447,752 NA

Other Equity (257,996) (32,289) 164,265 (67,737) (652,206) NA

Total Equity Before Distribution 9,499,209 9,349,481 9,456,916 9,033,548 7,993,921 NA

After Distribution (Note 2) 8,955,888 8,782,186 8,358,818 7,718,296 NA Note:

1. The above financial statements are prepared in accordance with the “Rules for the Preparation of Financial Reports by Insurance Institutions” effective at January 1, 2013.


2. Earnings distribution for 2016 has not yet been ratified at the stockholders’ meeting as of the reporting date. 3. As of the reporting date, the Company did not have the latest financial information audited or reviewed by

CPA in the current year.

2. Condensed Statement of Comprehensive Income: Adoption of IFRSs

NT$ thousands Year

Items From 2012 To 2016 (Note 1) 01/01/2017

~04/02/2017 (Note3) 2016 2015 2014 2013 2012

Operating Revenue 13,444,095 14,068,010 16,283,563 15,384,494 14,350,515 NA

Gross Profit 1,223,947 1,319,034 1,376,146 1,322,146 1,134,404 NA

Net Operating Income 913,911 983,606 1,001,012 944,214 773,699 NA

Non-Operating Income and Expenses (1,190) (1,790) (1) 586 19,947 NA

Income from Continuing Operations before Tax 912,721 981,816 1,001,011 944,800 793,646 NA

Income from Continuing Operations after Tax 765,790 765,865 870,874 732,090 678,934 NA

Net Income 765,790 765,865 870,874 732,090 678,934 NA

Total Other Comprehensive Income for The Year (after tax) (222,469) (198,570) 227,224 583,162 194,415 NA

Total Comprehensive Income for The Year 543,321 567,295 1,098,098 1,315,252 873,349 NA

Earnings per Share(after tax) (NT$)(Note 2) 1.36 1.36 1.55 1.30 1.21 NA

Note:

1. The above financial statements are prepared in accordance with the “Rules for the Preparation of Financial Reports by Insurance Institutions” effective at January 1, 2013.

2. Earnings per share were adjusted retroactively based on the number of shares after distribution for the past years.

3. As of the reporting date, the Company did not have the latest financial information audited or reviewed by CPA in the current year.


(II) Condensed balance sheets and statements of income for the past five financial years

1. Condensed Balance Sheets: Adoption the GAAP of R.O.C.

NT$ thousands

Year Items 2012(Note)

Cash and Cash Equivalents 17,008,182

Account Receivable 2,388,138

Investments 9,617,139

Reinsurance Reserve Assets 1,475,820

Fixed Assets 207,133

Intangible Assets 3,438

Other Assets 1,399,128

Total Assets 32,098,978

Account Payable 926,767

Financial Liabilities 1,266

Liabilities Reserves 23,090,610

Other Liabilities 86,954

Total Liabilities Before Distribution 24,105,597

After Distribution 24,381,222

Capital 5,512,500

Capital Reserve 300,000

Retained Earnings Before Distribution 2,700,597


Other Adjustments to Stockholders’ Equity (519,716)

Total Stockholders’ Equity

Before Distribution 7,993,381


Note: The above financial statement is prepared in accordance with the “Rules for the Preparation of Financial Reports by Insurance Institutions” effective at January 1, 2011.


2. Condensed Statement of Income – Adoption the GAAP of R.O.C.

NT$ thousands

Year Item 2012(Note1)

Operating Revenue 14,350,515

Gross Profit 1,134,404

Net Operating Income 774,222

Non-Operating Income and Gains 19,979

Non-Operating Expenses and Losses (32)

Income from Continuing Operations before Tax 794,169

Income from Continuing Operations after Tax 679,368

Extraordinary Gain /Loss 0

Cumulative Effect of Changes in Accounting Principles 0

Net Income 679,368

Earnings per Share(after tax)(NT$)(Note 2) 1.21 Note 1. The above financial statement is prepared in accordance with the “Rules for the

Preparation of Financial Reports by Insurance Institutions” effective at January 1, 2011.

2. Earnings per share were adjusted retroactively based on the number of shares after distribution for the past years.

(III) Independent Auditors’ Name and Audit Opinion

Year CPA Firm CPA’s Name Audit Opinion

2016 PricewaterhouseCoopers, Taiwan Chen, Hsien-I Lai, Chung-Hsi

Unqualified Opinion

2015 PricewaterhouseCoopers, Taiwan Kuo, Puo-Ju Lai, Chung-Hsi

Unqualified Opinion

2014 PricewaterhouseCoopers, Taiwan Kuo, Puo-Ju Lai, Chung-Hsi

Unqualified Opinion

2013 PricewaterhouseCoopers, Taiwan Chen, Hsien-I Lee, Hsiu-Ling

Unqualified Opinion

2012 PricewaterhouseCoopers, Taiwan Chen, Hsien-I Lee, Hsiu-Ling

Modified Unqualified Opinion


B. Financial Analyses for Recent Five Years

(I) Financial Analyses: Adoption of IFRSs

Year

Items

From 2012 To 2016 (Note 1) 01/01/2017 ~04/02/2017

(Note3) 2016 2015 2014 2013 2012

Operating Ability

Changes in Gross Premiums (1.07%) (13.18%) 4.47% 8.92% 4.18% NA

Changes in Reinsurance Claims Paid (9.46%) (8.70%) 7.45% 0.85% 8.48% NA

Changes in Retention Premiums (1.11%) (13.00%) 3.55% 9.99% 4.19% NA

Profitability

Return on Total Assets 2.29% 2.28% 2.60% 2.25% 2.16% NA

Return on Equity 8.13% 8.14% 9.42% 8.60% 8.98% NA

Net Investment Gain on Available Fund 0.52% 1.27% 1.40% 1.59% 2.28% NA

Return on Investments 0.51% 1.24% 1.37% 1.55% 2.22% NA

Retention Combined Ratio(Note 2) 95.28% 97.75% 106.04% 98.69% 102.62% NA

Retention Expenses Ratio(Note 2) 32.44% 32.81% 31.70% 33.94% 32.39% NA

Retention Loss Ratio(Note 2) 62.84% 64.94% 74.34% 64.75% 70.23% NA

Operating Structure

Retention Premiums on Equity 138.25% 142.04% 161.41% 163.18% 167.66% NA

Gross Premiums on Equity 147.82% 151.82% 172.89% 173.24% 179.74% NA

Net Reinsurance Commission on Equity 1.10% 1.15% 1.06% 1.08% 1.38% NA

Insurance Liabilities on Equity 248.39% 248.99% 250.23% 258.84% 288.85% NA

Changes in Equity 1.60% (1.14%) 4.69% 13.01% 12.27% NA

Expenses Ratio 32.34% 32.81% 31.54% 33.78% 32.29% NA

Analysis of financial ratio in last two years. (If the difference doesn’t exceed 20%, the analysis is not required) 1. Changes in gross premiums and Changes in retention premiums less than last year Mainly due

to the change in gross premiums decreased in 2016 less than 2015. 2. Changes in net investment gain on available fund and Changes in return on investments less

than late year Mainly due to net investment gain decreased in 2016. 3. Changes in equity more than last year Mainly due to retained earnings increased in 2016.

Note: 1. The above financial analyses are prepared in accordance with the “Rules for the Preparation of Financial

Reports by Insurance Institutions” effective at January 1, 2013, and these ratios are the key performance indicators of the company.


2. Pursuant to Article 3 of the “Regulations for Management of the Reserve for Compulsory Automobile Liability Insurance”, prior to amending legislation on December 31, 2013, the company shall set aside an amount equal to 1% of earned pure premium over the last 12 months as claims reserve for incurred but not reported losses. Effective January 1, 2014, claims reserve for incurred but not reported losses are set aside based on past claim experience and expense using the loss development triangle method, of these fix percentages of earned pure premium for reinsurance assumed shall be set aside as claims reserve for incurred but not reported losses of automobile and motor reinsurance assumed under compulsory automobile liability insurance, respectively. The fixed percentage referred to in the preceding paragraph shall be calculated by the professional institution entrusted by the competent authority in accordance with the formulation of premium rates under the Act and the past claim experience and expense of the overall industry using the loss development triangle method. The fixed percentage should then be submitted to the competent authority for approval prior to public announcement.(2014:60%, 45%; 2015: 60%,45%; 2016:63%,48%)

3. As of the reporting date, the Company did not have the latest financial information audited or reviewed by CPA in the current year.

(II) Financial Analyses: Adoption the GAAP of R.O.C.

Year Items

2012(Note)

Operating Ability

Changes in Gross Premiums 4.18%

Changes in Reinsurance Claim Paid 8.48% Changes in Retention Premiums 4.19%

Profitability Return on Total Assets 2.16% Return on Equity 8.99% Net Investment Gain on Available Fund 2.65% Return on Investments 2.58% Retention Combined Ratio(Note) 102.62% Retention Expenses Ratio(Note) 32.39% Retention Loss Ratio(Note) 70.23%

Operating Structure Retention Premiums on Equity 167.67% Gross Premiums on Equity 179.76% Net Reinsurance Commission on Equity 1.38% Insurance Liabilities on Equity 288.87% Changes in Equity 12.29% Expenses Ratio 32.29%

Note: The financial analyses of the fiscal year of 2012 is prepared in accordance with “Rules for the Preparation of Financial Reports by Insurance Institutions” effective at January 1, 2011. These ratios are the key performance indicators of the company.


C. Audit Committee’s Review Report

Please refer to page 95.

D. Financial Statements and Report of Independent Accountants

Please refer to pages 96 to 178.





















































































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Nanjing East Rd,

2016

Printed on 2 April, 2017

Annual Report

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Documents

Nanjing East Rd, - centralre.com · Net Income 765,790 780,140 98.16 (III) Profitability Analysis The table below shows an analysis on the profitability ratios of 2016 as compared