Yin Yanliang, president of Runtai Group, took over Nanshan Life Insurance from AIG in 2011 for more than 10 years, and there are still many challenges.

(Central News Agency)

Yin Yanliang took control of Nanshan 95 billion and was locked up

[Reporter Li Qiwen/Comprehensive Report] In 2011, Yin Yanliang, president of Runtai Group, and Cai Qirui, founder of Baocheng Industry, spent US$2.16 billion, which was equivalent to NT$68 billion at the exchange rate at the time, to take over Nanshan Life Insurance from the foreign capital American International Group (AIG). Based on Yin's promise to the Financial Management Commission that "the equity in Nanshan will not be sold for 10 years", in order to release the equity in Nanshan in his hands, Yin Yanliang has continued to strive for the listing of Nanshan's stock for many years; promote the three-in-one with Zhaofeng Gold and Changyin plan; actively increase the weight of CITIC Gold stocks, etc., in the hope that the funds stuck in Nanshan can be realized.

For more than 10 years, in order to fill the official requirement on Nanshan's capital adequacy ratio (RBC), Yin Yanliang sold all important assets such as China RT-Mart and Taiwan RT-Mart in exchange for cash to increase capital in Nanshan. The current capital of Nanshan has reached 138.2 billion yuan, 89.5% The equity is controlled by Runcheng Investment Holdings. Runcheng will increase its capital in June 2022, with a share capital of 291 billion yuan, of which Yin Yanliang’s related companies hold about 80% of the shares. In this conversion, Yin Yanliang’s funds in Nanshan exceed 95 billion yuan.

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However, due to the impact of the international financial environment this year, the appreciation of the U.S. dollar and the sharp decline in U.S. debt have caused the net worth of seven life insurance companies, including Nanshan, to shrink. The situation in Nanshan is the most severe. Although the net worth ratio has turned positive after asset reclassification, But at the same time, the market again reported that CITIC Financial, which has been facing the threat of Nanshan mergers and acquisitions for many years, intends to acquire Nanshan, which seems to put Yin Yanliang's dream of life insurance in jeopardy.

Yin Yanliang's original commitment to the Financial Supervisory Commission "not to sell Nanshan's equity for 10 years" has expired, but due to the delay in listing Nanshan's shares, Yin Yanliang is facing heavy financial pressure.


(File photo of this newspaper)

Nanshan Labor Disputes Difficult to Solve

In 2016, Nanshan fully changed its salespersons from the "employment system" to the "contracting system", which led to tense labor relations and became another major obstacle to the listing. According to the Nanshan trade union's allegations in 2021, Nanshan Life Insurance has repeatedly Violating the labor law and being fined tens of millions, including extending working hours without the consent of the trade union, overtime work, and failure to pay overtime pay according to law, etc. In 2022, Nanshan was fined another 500,000 yuan for overtime work. He was criticized by the labor union as a "recidivist violating labor standards laws."

However, according to previous media reports, instead of actively resolving labor disputes, the company’s senior management believed that the amount of fines was not large and would not be included in the financial report. They even claimed that Nanshan has paid fines, is a law-abiding company, and has been involved in lawsuits with employees for many years The labor issue in 2008 was set aside and remains unresolved to this day.

After Yin Yanliang took over Nanshan, the relationship with salesmen changed from employment to contracting. The labor dispute between Nanshan Life Insurance and salesmen has not been resolved for many years.

(Central News Agency)

Managers formed a group to speculate in stocks, Nanshan's corporate governance collapsed

In 2018, Nanshan Investment Department revealed that a manager surnamed Ye privately operated an investment advisory business through the Line group, first locked small and medium-sized stocks, and then sent news to group members to buy shares, and used policyholder funds to raise stocks. Earn the difference.

In this regard, Nanshan explained that the case was purely inappropriate behavior of the parties involved, denied that the former employee used Nanshan policyholder funds to "carry the sedan chair" for specific stocks, and said that Nanshan strictly prohibited investment-related personnel from speculating on stocks, and any purchase of stocks must be done in advance. Apply for approval or post-declaration.

In response to this stock speculation case, the Financial Supervisory Commission determined that Nanshan failed to perform relevant inspections and supervision, and the internal control mechanism failed and fined 4.8 million yuan; in addition, Nanshan received reports from the public a few months before the incident, but did not act urgently until the media reported It was only after a notification was made that the mechanism was judged to be flawed and a further fine of 1.8 million was imposed.

Nanshan was fined 6.6 million yuan for a manager surnamed Ye who used the Line group to speculate in stocks.

(Central News Agency)

Realm Chaos!

Tens of billions of systems launched frequently

Not only that, but in September 2018, Nanshan Life Insurance spent tens of billions on the "Achievement Plan" to update the computer system. The goal is to integrate Nanshan's 50-year-old system into a single platform to collect policyholders and policy information. Unexpectedly, the new system After it went online, 150,000 insurance policies were suspended. Later, it was revealed that 60,000 insurance policies were due to credit card deduction and premium payment errors, which may cause damage to the rights and interests of 210,000 Nanshan Life Insurance consumers.

In this regard, the Consumers' Foundation pointed out: "Nanshan Life's system frequently outsources contracts, which has seriously affected the rights and interests of policyholders. The industry is acting on the cheap, and even allows salesmen to fill out any documents for policyholders without authorization. Consumer rights have completely disappeared!".

In addition, the Financial Management Commission also reprimanded Nanshan for hastily replacing the old system with a new system and imposed a heavy fine of 30 million. Du Yingzong, who was the chairman at the time, was suspended for 2 years because of this. chairman.

Du Yingzong, the former chairman of Nanshan Life Insurance, was suspended by the Financial Management Commission for two years in September 2019, and left Nanshan in April of the following year.

(Central News Agency)

Caught in a net worth storm, Nanshan is under great financial pressure

In 2021, Nanshan Life's profit will increase by 60% to a new high. It was once expected to get rid of the negative image of years of turmoil and controversy. Unexpectedly, in 2022, the US interest rate hike and the sharp drop in US bond prices will cause a crisis in the net worth of the life insurance industry. Among them, Nanshan The net worth ratio once turned negative, which further impacted the share prices of major shareholders Runtaiquan (2915) and Runtaixin (9945).

Since Nanshan holds a large number of bond positions, it is more susceptible to interest rate fluctuations. When insurance liabilities are not calculated at fair value, and the shrinking assets are deducted from the liabilities that have not been reduced, the net worth will drop significantly. After reclassification of financial assets, even if Nanshan’s current net worth ratio It has returned to normal, with a net worth of 326.5 billion yuan, but Nanshan still has insufficient funds, and was fined 1.2 million yuan by the Financial Supervisory Commission for failing to announce asset reclassification information within the prescribed time limit.

Now, the 10-year lock-up period that Yin Yanliang promised at that time has already expired, but the Nanshan stock listing case has been repeatedly delayed due to labor disputes, stock speculation cases, and system chaos. Yin Yanliang’s funds invested in Nanshan many years ago were locked up. Faced with the pressure of M&A from CITIC Financial at a time of crisis, Nanshan may still have a long way to go if it wants to go public as it wishes.

In July 2022, the U.S. vigorously raised interest rates and triggered a storm in the net worth of the life insurance industry.

(File photo of this newspaper)

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