TREIF Charter of Endowment

• Article 1
  This incorporated foundation shall be known as Taiwan Residential Earthquake Insurance Fund ("TREIF"), and is organized in accordance with Article 138-1 of the Insurance Act, Foundations Act, and the Civil Code provisions governing incorporated foundations.
  
• Article 2
  The purpose of TREIF is to assume and spread residential earthquake risks underwritten by non-life insurers, and to manage the risk spreading mechanism established by the competent authority.
  
• Article 3
  The competent authority shall be the Financial Supervisory Commission ("FSC").
  
• Article 4
  TREIF's head office shall be based in Taipei City, and domestic branch offices may be established as required by business operations.
  
• Article 5
  At the time of establishment of TREIF, NT$20 million was be contributed by the Committee for the Administration of Development of Insurance Business, and TREIF registered as an incorporated foundation.
  TREIF’s property shall be kept and utilized in accordance to Regulations Governing the Management of TREIF and the relevant provisions.
• Article 6
  TREIF revenue sources shall be as follows:
  1. Pure premium income ceded from residential earthquake insurance ("the Insurance") assumed by non-life insurers;
  2. Expense loading income allocated by the Insurance;
  3. Proceeds derived from fund utilization;
  4. Other income.
• Article 7
  The scope of TREIF business shall be as follows:
  1. Reinsurance placement, assumption and spreading of risk for the Insurance;
  2. Collection of the various types of income named in the preceding article and fund utilization;
  3. Contracting loans or obtaining financing domestically and/or overseas in accordance with the fundraising plan;
  4. The handling of other business in relation to the preceding three subparagraphs;
  5. Matters designated by the competent authority;
  6. Organizing charitable activities that are in line with the goals of TREIF;
  7. Other business that TREIF is permitted to undertake in accordance with the Insurance Act or other laws and regulations.
• Article 8
  TREIF shall have a board of directors containing 9 to 11 directors, comprised of the following persons who are appointed or dismissed by the competent authorities:
  1. Two to three representatives of the competent authority;
  2. One representative of the National Treasury Agency, Ministry of Finance;
  3. Tow to three experts or scholars designated by the competent authority;
  4. Three representatives drawn from members of the residential earthquake insurance pool;
  5. TREIF's President.
  At least one-fifth of TREIF’s directors shall possess expertise or work experience relevant to the purpose of TREIF’s establishment.
  The directors shall elect from among themselves one chairperson, who shall chair meetings of the board of directors and represent TREIF in external affairs.
  If the chairperson is on leave or absent or unable to exercise the duties and powers for any cause, the chairperson shall designate one of the directors to act on the chairperson’s behalf. In the absence of such a designation, a director shall be elected from among themselves to be the acting chairperson.
• Article 9
  The chairperson shall convene a Board meeting, preside the meeting once a month, and may convene an extraordinary meeting when necessary.
  Upon a written request setting forth the meeting purpose and convention reasons from one-third or more of the current directors to convene the Board meeting, the chairperson shall convene the Board meeting within 10 days after receiving such request. If the chairperson does not give notice to convene the Board meeting within the specified time period, the requesting directors may report to the competent authority and convene the meeting upon obtaining the approval.
  Directors shall attend the Board meeting in person. When a director is unable to attend in person, such director may designate another director to attend as a proxy. A director may accept the designation to act as the proxy for one director only, and the directors who act as the proxy shall not exceed one-third of the total number of directors.
• Article 10
  The functions of TRIEF's board of directors shall be as follows:
  1. Receipt, disbursement, management, and utilization of funds;
  2. Formulation and management of the internal organizational structure;
  3. Review, approval and implementation of the business plan;
  4. Review and approval of budgets and final accounts for annual revenues and expenditures;
  5. Review of the fundraising plan;
  6. Appointment and removal of the chairperson of the Board;
  7. Appointment and dismissal of key personnel;
  8. Proposal of amendments to the charter of endowment;
  9. Formulation and revision of key rules and systems;
  10. Proposal of disposal of or creation of encumbrance on real property;
  11. Review and approval of other important matters.
• Article 11
  Unless the law or the charter of endowment provides otherwise, the Board resolutions shall be adopted by a majority of the attending directors at a Board meeting attended by a majority of all directors. However, the following essential matters shall be adopted by a three-fourths of the attending directors at a Board meeting attended by two-thirds of all directors and submitted to the competent authority for approval.
  1. Proposal of amendment to the charter of endowment;
  2. Use of the fund;
  3. Use of the fund to make up the deficit;
  4. Disposal of or creation of encumbrances on real properties;
  5. Other matters designated by the competent authority.
  The discussion of essential matters set out in the preceding paragraph shall be notified to all directors and the competent authority at least 10 days before the Board meeting and shall not be proposed by an extempore motion.
• Article 12
  TREIF shall have one to three supervisors. The supervisors shall be appointed or dismissed by the competent authority.
• Article 13
  The functions of the TREIF supervisors shall be as follows:
  1. Oversee the operation and financial status;
  2. Review the final accounts, audit financial statements, documents and property information;
  3. Oversee the operation to be carried out in accordance with laws and the charter of endowment;
  4. Attend the Board meeting in a non-voting capacity.
• Article 14
  Directors and supervisors shall serve three-year terms, and if reappointed may serve successive terms, provided that the number of reappointed directors shall not exceed four-fifths of the total number of directors to be appointed at the same time.
  If a director or supervisor is replaced for any reason, the term of the replacement shall last only until the expiration of the term of the original director or supervisor. If, upon expiration of the term of office, a director or supervisor has not been replaced, then he or she shall continue to serve until a newly appointed director or supervisor assumes office.
  Chairperson, directors and supervisors shall not have a spousal relationship or a relationship within the third degree of kinship by blood or by marriage.
  A director, supervisor, or the president that has a conflict of interest in the course of executing his or her duties shall voluntarily recuse him or herself, provided that this requirement shall not apply when a chairperson is elected.
  The term "conflict of interest" in the preceding paragraph means that a director, supervisor, or the president may, by act or omission, directly or indirectly obtain benefit for himself or herself or a related party.
  Directors, supervisors, the president shall not seek any interest for themselves or their related parties by abusing the power, opportunities or methods in execution of their duties.
  The interest referred to in the preceding two paragraphs means, as a result of the director, supervisor, and the president’s execution of their duties, an improper increase of money, articles or other property value to such persons or their related parties.
  The related parties referred to in the preceding three paragraphs means the spouse or relatives within the second degree.
  Unless the law provides otherwise, no director or supervisor nor the spouses of or relatives within the second degree to the said persons shall engage with TREIF in purchase and sale, lease, contracting or any other transaction that may gain profits for their own or their related parties. This shall not apply to transactions where the object to be transacted are offered by TREIF at official prices.
• Article 15
  No person with any of the following circumstances shall be appointed as the chairperson, alternate chairperson or a supervisor of TREIF, and, if appointed, the person shall be ipso facto removed from office by the competent authority with notice to the court for relevant registration:
  1. Having been rendered with a final judgment of guilty for committing an offence under the Statute for Prevention of Organizational Crimes, the sentence as result thereof is not yet served or fully served, or it is less than 2 years after the sentence is fully served or pardoned; provided that this shall not apply to a person who has received a sentence of probation;
  2. Having been rendered with a final judgement of guilty for committing fraud, breach of trust, misappropriation or corruption and sentenced to an imprisonment term of 1 year or longer with the sentence is not yet served or fully served, or it is less than 2 years after the sentence is fully served or pardoned; provided that this shall not apply to a person who has received a sentence of probation;
  3. Having been denied service by the bills clearing house and the denial status has not yet been removed;
  4. Having been adjudicated bankrupt or ordered to begin the liquidation procedure in accordance with the Consumer Debt Clearance Act, and the rights and privileges have not been reinstated; or
  5.Having been placed under guardianship or assistance by the court, and the status has not yet been removed.
  A person with the circumstance set out in subparagraph 4 or 5 of the preceding paragraph shall not be a director of TREIF; if appointed, the person shall be ipso facto removed from office by the competent authority with notice to the court for relevant registration.
  A director or supervisor of TREIF with any of the following circumstances shall be removed from office by the competent authority with notice to the court for relevant registration:
  1.Having been sentenced with an imprisonment term; however, provided that this shall not apply if the sentence is accompanied with a probation or the offence is committed due to negligence;
  2.Exercising duties by a director or supervisor in violation of law or the charter of endowment which is harmful to the benefit of the public or the foundation.
• Article 16
  TREIF shall have one President, and if necessary for business operations, shall have one or two Executive Vice President and different departments.
  TREIF's President shall be employed or dismissed upon recommendation of the board chairperson and approval by the board of directors. The Executive Vice President and heads of departments shall be appointed or dismissed upon recommendation of the President and approval by the board of directors.
  The President shall exercise overall administration of TREIF affairs in accordance with the resolutions of the board of directors.
• Article 17
  Rules governing major matters for which TREIF Charter of Endowment or Organizational Charter make no provision, and any amendments to those rules, shall be separately adopted by the board of directors, and shall be reported to the competent authority for approval prior to their implementation.
• Article 18
  TREIF accounts shall be maintained on an accrual basis, and the beginning and end of its fiscal year shall be based on the calendar year.
  Prior to formulation of each year's budget, TREIF shall draw up a work plan for the fiscal year and submit it to the competent authority for review and approval after it was passed by the Board of directors. TREIF shall submit the budget report and the work plan for the coming fiscal year before July 31 each year as well as the final accounting report and the work result report for the preceding fiscal year before April 15 each year to the competent authority for record after passed by the Board of directors. TREIF's financial report shall be audited and attested by a certified public accountant.
  The budget report and final accounting report of the preceding paragraph shall include a balance sheet, statement of revenues and expenditures, cash flow statement, statement of changes in net value, and related tables.
  The final accounting report and the work result report in the second paragraph shall be submitted to all supervisors for conducting audit after they are passed by the Board of directors and then submitted to the competent authority for record along with a supervisory report for the preceding year prepared by the supervisors.
• Article 19
  When TREIF is dissolved in accordance with law, then unless otherwise provided by laws, its residual assets shall be transferred to public interest institutions or organizations designated by the competent authority. Where that competent authority makes no such designation, the residual assets shall belong to the National Treasury.
• Article 20
  Matters for which the charter of endowment make no provision shall be subject to related laws and regulations, rules, and standard practices.
• Article 21
  The charter of endowment adopted and implemented per 30 November 2001 Letter No. Taiwan-Finance-Insurance-0900751338 of the Ministry of Finance.
  Amendments to the charter of endowment are for implementation after revision by the competent authority.