The Financial Supervisory Commission (FSC) of Taiwan has decided to maintain the overseas investment cap for local insurers at 45% of total assets, rejecting a proposal to reduce it to 25%. This decision came after concerns about the lack of local investment options and potential losses from premature divestments. The proposal, initiated by KMT Legislator Lo Ming-tsai, aimed to lower the cap below the pre-2007 level of 35%. FSC Chairman Peng Jin-lung highlighted that about NTD9tr (USD275.8bn) would need reallocating domestically if the cap were reduced, posing risks given the majority of these funds are in stable, long-term foreign bonds. Peng also noted the limited capacity of Taiwan’s bond market to absorb such a shift and potential impacts on local stocks and real estate markets.