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  • China Life has long attached importance to the sustainable development of enterprises, responding to global sustainability trends, pursuing the sustainable value of stakeholders, and proactively responding to the United Nations Principles of Perpetual Insurance (PSI), Principles of Responsible Investment (PRI) and Sustainable Development Goals (SDGs) , incorporate the company’s strategic planning and management with consideration of environmental, social and corporate governance (Environmental, Social and Governance, ESG) and other issues to strengthen the grasp of sustainable opportunities and risks, and implement it in product design, sales underwriting, investment management, sales. All links in the life insurance value chain, such as "post-service", serve as the basis for the company's decision-making to achieve the vision of "the most trustworthy insurance company".

    Principles for Sustainable Insurance (PSI)

    Principle 1: Embedding our decisions to environmental, social and governance issues relevant to our insurance business.
    Company Strategy
    • Regularly convene the CSR Committee. The chairperson of the Board of Directors shall serve as the committee chairperson, and 80% of committee members must be China Life directors. The committee structure is closely aligned with the Company’s management and governance strategies. It shall promote, trace, and inspect ESG implementation and effectiveness in a forward-looking manner then report findings to the Board of Directors.
    • In 2020, all home office staff underwent ESG awareness education and expanded ESG practices, and we held a total of 38 sessions tailored to different objectives and groups.
    • Communicated overall operational strategies and performance including ESG implementation, in investor meetings and regular shareholders’ meetings.
    Product Design
    • We regularly assess our actuarial assumptions, including the investment return rates, mortality rates, morbidity rates, lapse rates, expense rates, exchange rates, tax rates, and ESG topics, in order to develop innovative, diverse products that meet customer needs. In accordance with the “Regulations Governing Pre-sale Procedures for Insurance Products,” every six months we hold at least one product management taskforce meeting to ensure sustainable operations and uphold consumer rights.
    • Product design strategies include implementation of inclusive financing and offering of microinsurance, small-amount life insurance, and spillover dementia products. Other ESG-focused insurance products include whole life insurance products customized for people with disabilities and insurance coverage for epidemics and pandemics. These diverse offerings satisfy people during different life stages and with different needs. They care for the disadvantaged, promote physical and mental health, and solidify the social safety net.
    • Taiwan’s ageing society has brought with it a number of risks, including an increase in the number of people who live a longer life but lack sufficient retirement savings are spending their retirement savings too quickly. China Life therefore promotes variable life insurance products that combine insurance and investment components. These products have a low qualification requirement and include a diverse set of discretionary accounts with varied investment strategies investing in domestic and foreign regions and industries with different risk levels. The products enable policyholders to use these products to make long-term planning by tapping into the protection and investment components of the policies.
     

    ◼ China Life Product Design Process

    Sales and Underwriting
    • During solicitation, we provide complete sales documents (such as recommendations and product DM) that are regularly reviewed and approved by the Company. We understand customer needs, evaluate investment risk tolerance, and analyze investment attribute then use this information to provide appropriate financial products that are fair, reasonable, equitable, mutually beneficial, and adhere to ethical principles. At the same time, we ensure that the products are valid and do not show any signs of misrepresentation, fraud, and concealment and do not contain any misleading information.
    • Underwriting is handled in accordance with the “Underwriting System and Procedures” and the “Offshore Insurance Units Underwriting System and Procedures.” Professional underwriters weigh the Company’s risk undertaking capacity then consider the basic information of the applicant as well as general information relating to the insured, including the motivation for purchasing insurance products, the insurance benefits and need, plan suitability, financial state, and health condition to ensure fair treatment of customers.
    • Money laundering and terrorist financing risk analysis is incorporated into the underwriting procedures. Based on the policyholder risk level, we create management mechanisms. Using a risk-based approach, we identify potential money laundering or terrorist financing indicators. Auxiliary monitoring systems use this information to quickly identify suspicious transactions and adopt related risk control measures.
    • The insurance industry collects, handles, and uses copious amounts of personal information from customers. Therefore, in accordance with the latest BS10012 Personal Information Management System standards, we incorporate personal information protection management best practice principles into all of our channels. In 2020, we expanded verification scope to include third-party verification of all of the Company’s business, in order to ensure that the collection, handling, and use of personal information does not exceed the required scope of our specific objectives.
    • Using FinTech, we expand insurance inclusion. Policyholders can now use mobile devices to apply for insurance and submit required documents. These tools significantly decrease the time needed for document transmission and raise underwriting efficiency.
    Investment Management
    • In 2020, we formulated responsible investment policies and updated our compliance statement of Stewardship Principles for Institutional Investors. On the basis of legal compliance, we embed ESG principles into our internal investment policies and decision-making. In addition to designating exclusionary standards for direct investments, we screen investments to uncover industries with high ESG risks. We increase the value of our investment assets through comprehensive analysis of the industrial development, profits, and sustainable actions of our investment targets.
    • Every year we regularly evaluate the overall operational situation, sustainability and ESG performance, and CSR performance of our invested companies. Our institutional investors attend shareholders’ meetings, exercise voting rights, and communicate with the directors or executive managers of the invested companies on our behalf. We fulfill our stewardship principles as investors over the long-term to uphold the rights and interests of the Company, customers, shareholders, and other stakeholders.
    After-Sales Service
    • Joined the Policy Service and Claims Consortium Blockchain to provide policyholders with a one-stop claims application service that renders the claims process more efficient.
    • We continue to increase the transparency of the claim settlement process. Insured persons can access coverage information and inquire about claims application progress through an online service platform, as well as receive case acceptance and closure notifications via text messages. We also launched expedited claims at service counters, which include a 30-second payment process, so that policyholders can promptly receive the support they need.
    Principle 2: Working together with our customers and business partners to raise awareness of ESG issues, manage risk, and develop solutions.
    Customers
    • In order to best satisfy customer needs, we provide services through a number of channels, including service counters, customer hotlines, our corporate website, and social media. We further use a variety of communication methods, making sure that customers are able to communicate with China Life online and offline.
    • Practical communication channels should support bilateral interaction. Policyholders can use our communication channels to report their ESG concerns, and they can obtain information on ESG topics or related activities through e-newsletters, the corporate website, or social media.
    • To uphold the spirit of treating customers fairly, we provide inclusive financial and FinTech services. These satisfy customers’ diverse needs at all stages of life while offering tailored ESG solutions suited to different groups of people.
    Suppliers
    • Using the Property Procurement Guidelines as a basis for selecting suppliers, we prioritize suppliers with excellent ESG performance and directly address ESG issues through open negotiations, contract signings, progress reports, inspection and acceptance, and performance management. All of the suppliers that fulfill our general procurement contracts or construction and repair contracts also signed the “Supplier Corporate Social Responsibility Guidelines.”
    • We evaluate suppliers using the Supplier CSR Guidelines, which manage risk by focusing on 12 ESG topics, including labor rights and human rights, worker health and safety, environmental protection, and CSR.
    • We continue to publicize the CSR Supplier Section on our corporate website so that we can work with suppliers to support compliance with our CSR pledges. Suppliers and contractors can also access the feedback sections on the CSR and stakeholder sections of our website to file relevant complaints.
    Cooperative Channels: Insurers, Reinsurers, and Brokers/Agents
    • Use email, telephone, meetings, education and training, and other methods to communicate ESG issues with our cooperative channels. Provide high-quality products that adhere to ESG values and information on mobile application to our cooperative channels.
    • Since 2018, we have discussed mobile insurance application methods with our cooperative partners. Through 2020, 22 of our partner banks, insurance brokers and agents offered mobile insurance applications, which expanded our energy savings and carbon reduction efforts.
    • Our cooperative partners signed contracts, pledging to follow anti-money laundering and counter-terrorist financing legal requirements. Related legal requirements and other ESG topics are shared using contact lists and in discussions between staff to effectively control and manage ESG risks.
    Principle 3: Working together with governments, regulators, and other key stakeholders to promote widespread actions on ESG issues across society.
    Governments, Regulators and Other Policy Decisionmakers
    • We engage in close, frequent interactions with governments and regulators. We submit business reports and hand over financial inspection data upon request. We also attend relevant government meetings, conferences, and seminars. At the same time, we carry out sustainable development strategies, such as corporate governance, green finance, responsible investing, and fair treatment of customers, financial inclusion, digital innovation, anti-money laundering and counter-terrorist financing to promote ESG actions both internally and externally.
    • In coordination with the FSC’s Corporate Governance 3.0 – Sustainable Development Roadmap and the Green Finance Action Plan 2.0, we survey China Life’s development in investment, information disclosure, regulation, talent training, international links, and other areas. We also carry out climate change analysis and stress testing, and include climate change risks and assessments in our own risk and solvency assessment (ORSA) reports. The Board of Directors and management conduct climate change risk management, internal and external sustainable finance education and promotion, and other ESG-related activities.
    • In coordination with the FSC’s financial information security action plan, we plan and implement information security promotion measures. Starting in 2021, we will review implementation status every six months.
    Other Important Stakeholders
    • To facilitate innovation and progress in the insurance industry, we cooperate with the Life Insurance Association of the Republic of China (LIA-ROC) and other public associations to jointly examine insurance industry risk management, emerging risks, business continuity management, the Task Force on Climate-Related Financial Disclosures design, anti-money laundering and counter-terrorist financing, and other ESG topics. We share our business experiences and status while evaluating the feasibility of potential actions.
    • We joined LIA-ROC and the Taiwan Blockchain Alliance in launching a shared blockchain technology platform for the insurance industry. The platform facilitates sharing of documents between the 11 participating insurers and supports our goal of providing one-stop service to customers.
    • We promote inter-industrial ESG action and cooperation. For example, when China Life policyholders diagnosed as having a catastrophic illness purchase healthy food products at 7-Eleven, they can earn reward points as an incentive for managing their health risks.
    • We have become the first dementia-friendly insurance company in Taiwan. In cooperation with the Taiwan Alzheimer’s Disease Association, we have integrated dementia care into our business practices. We publish easy-to-understand comics and other guidebooks and offer a dementia-prevention website to raise dementia awareness. Through our actions, we join in creating a safety net for dementia patients.
    • We issue news reports to media that share ESG information. At the same time, we uphold our core corporate spirit of “love and care” to use our life insurance expertise to promote social risk management and awareness.
    Principle 4: Demonstrating accountability and transparency in regularly disclosing publicly our progress in implementing these principles for sustainable insurance.
     
    • In June of each year we publish our annual CSR report. In special columns, we disclose implementation of sustainable insurance principles. The British Standards Institution (BSI), an independent third-party certification body, verifies the Report in accordance with AA1000 international standards using Type 1 moderate level assurance. Through these measures, we ensure that we are open, accountable, and transparent about our compliance with sustainable insurance principles. Stakeholders can also access the CSR and fair treatment of customers sections of the China Life website to understand the Company’s progress in implementing principles for sustainable insurance and to understand more about our sustainable products and services.
     

    Policy for Responsible Investment (PRI)

    Principle 1: Incorporate ESG topics into investment analysis and decision-making processes
    • Formulated the Policy for Responsible Investment, investment policies, and operational norms handbooks while including ESG issues in our investment decision-making.
    • The proportion of reports on investment targets including CSR evaluation items achieved 100%.
    • All investment evaluation reports were required prior to investing in non-listed companies included information on ESG-related issues, including environmental protection, labor-management relations, and corporate governance.
    Principle 2: Be an active shareholder and incorporate ESG issues into our ownership policies and practices
    • 100% participation in the shareholders’ meetings of invested companies that are listed on a stock exchange and 100% voting rate in shareholders’ meeting proposals.
    • 100% participation in the shareholders’ meetings of invested companies that are not listed on a stock exchange and 100% voting rate in shareholders’ meeting proposals.
    Principle 3: Seek appropriate disclosure on ESG issues by invested entities
    • Investment target evaluation reports referred to CSR reports and other related information.
    • When purchasing existing shares to invest in unlisted companies, we reached an agreement on ethical management policies with 100% of invested companies.
    Principle 4: Promote acceptance and implementation of the PRI principles within the investment industry
    • 90.9% of our foreign funds, ETFs and foreign private equity funds were from signatories of the PRI.
    Principle 5: Build cooperation mechanisms to enhance our effectiveness in implementing the PRI principles
    • By participating in the investment research task force of the Life Insurance Association of the Republic of China, we discussed investment practices with other life insurance companies.
    Principle 6: Report on our activities and progress towards implementing the principles
    • Compiled monthly reports on the operations or trends of our invested companies’ industry chain and reported investment performance to the related manager with the highest level of authority.
    • Disclosed our responsible investment achievements in the CSR Report.