Legal Compliance

In response to the increasingly strict financial regulation of the competent authority in Taiwan, the Company established the "Compliance Risk Management and Supervision Framework" and conducts compliance risk assessments according to the "Guidelines for Compliance Risk Assessment Procedures and Methods" every year. We assess the existing risks, control results, and residual risk of each department, and subsequently examine the management measures and operating procedures of high risk departments based on assessment results, in order to improve control results and assist monitoring and integration through the "regulatory change management system." We established standardized examination procedures to understand the progress and implementation of action plans related to internal regulations and systems of departments in response to regulatory changes.

The Compliance Department periodically convenes communication meetings for the second line of defense every six months. Attendees include second line of defense units (including the Risk Management Department and Information Security Department), corporate governance officer, and the Auditing Department. Second line of defense units communicate with each other on matters such as internal control, legal compliance operations, and compliance deficiencies found in internal and external audits, so as to establish a clear horizontal communication mechanism. First line of defense units is all invited to attend the meetings based on the issue, in order to ensure that all lines of defense of the Company have an understanding of corporate governance issues.

Furthermore, the Compliance Department participates in the planning of new products and services and provides complete compliance opinions in a timely manner, rapidly responding and effectively managing compliance risks. We conduct compliance inspections on an annual basis, track improvements, and arrange relevant training. We also established management mechanisms for fines that were imposed on peers in the industry, and conduct sampling self-inspections to lower the probability of similar deficiencies.

The internal audit unit is subordinate to the Board of Directors and audits finance, sales, information, and other management units at least once a year according to the annual audit plan and "Regulations Governing Implementation of Internal Control and Auditing System of Insurance Enterprises." Project audits are conducted according to actual needs, the principles of treating customers fairly are included as key audit items for the financial services industry. The internal audit unit follows up on improvements in response to inspection opinions and audit deficiencies found by the competent authority, accountants, internal audits (including the internal audit unit of the financial holdings corporation), and self-inspections. Furthermore, communication between independent directors and chief internal auditor are disclosed on the company's website.