The Financial Supervisory Commission (FSC) of Taiwan has recently announced it has rejected the planned purchase of the life insurance unit of AIG in Taiwan by Primus Financial Holdings Ltd. It is believed the FSC had concerns about Primus, which is based in the Cayman Islands, may be backed by funds from mainland China, thus in violation of the Taiwan law that prohibits Chinese investment in the financial sector.

Chinatrust Financial Holding Co. Ltd. of Taiwan has effectively walked away from a deal with a Hong Kong-based consortium, formed by China Strategic Holdings Ltd. and Primus Financial Holdings, to purchase a 30 percent stake in Nan Shan Life Insurance Co. Ltd. a unit of American International Group Inc. (AIG), by letting the deadline of the deal lapse.

The buyers of Nan Shan Life Insurance, the Taiwanese life insurance unit of AIG, have agreed to amend their purchase agreement to include a escrow funds clause, in order to strengthen the bid for regulatory approval of the transaction.