TAIPEI, Nov 28 (Reuters) - Taiwan's government will pay Transglobe Life Insurance T$88.4 billion ($3 billion) to take over ailing rival Kuo Hua Life after Transglobe beat out other competitors in the biggest taxpayer-funded bailout ever by the island state.
Taiwan's overcrowded life insurance industry has been hit by cut-throat competition, in part because Taiwan's interest rates are among the lowest in Asia, prompting much consolidation in the sector, particularly as foreign firms exit the market.
Local media said Chinatrust Financial Holdings Co Ltd and Mercuries Life competed in the auction with Transglobe, which is a mid-sized insurer previously owned by Dutch insurer Aegon.
Kuo Hua Life, a small insurer which has been in financial difficulty for years, has 1.4 million policy holders compared to Taiwan's population of 23 million, the Financial Supervision Commission said in a statement late on Tuesday.
Foreign firms that have left the market in the past few years include AIG, which sold its Taiwan life insurance business for $2.2 billion to a local conglomerate, and ING Groep NV which sold its Taiwan insurance assets to Fubon Financial Holding Co Ltd.
British insurer Aviva has also said it will sell its stake in a joint venture with First Financial Holding Co .