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Issuing Directions Governing Insurance Agent Companies and Insurance Broker Companies Conducting Insurance Business via Internet

Trisha Chang/Jade Wang


In response to the rapid development of e-commerce, the Financial Supervisory Commission (FSC) issued the Directions Governing Insurance Agent Companies and Insurance Broker Companies Conducting Online Insurance Business, per the letter Ref. No. Jin-Guan-Bao-Cai-Zi No. 10602563921 dated November 3, 2017 to allow insurance agent companies, insurance broker companies, and banks concurrently operating insurance agent business or insurance broker business ("Insurance Agent or Broker") to conduct online insurance business. The main points are as follows:
 
1.      Point 3: Insurance Agent or Broker shall set up a special area or web page on the company's website for conducting online insurance business while its insurance business solicitors are not allowed to do so.
 
2.      Point 4: Insurance Agent or Broker shall ensure that the insurance companies cooperating with the Insurance Agent or Broker reflect the cost savings from online insurance business in the insurance loading.
 
3.      Point 5: Insurance Agent or Broker shall meet the following qualifications when applying for conducting online insurance business:
 
(1)   Has established and implemented its internal control, audit, and business solicitation systems and procedures in accordance with the Regulations Governing the Implementation of Internal Control and Audit System and Business Solicitation System of Insurance Agent Companies and Insurance Broker Companies.
 
(2)   Has not been subject to major penalties or cumulative fines of more than NT$1 million imposed by the FSC within the past year, except if substantial improvements have been made, as determined by the FSC.
 
(3)   Its annual financial statements shall have been audited and certified by a certified public accountant
 
(4)   Has obtained the ISO 27001 certification in Information Security Management System, and set up a network traffic cleaning mechanism for defense against distributed denial-of-service attack (DDoS).
 
4.      Points 6 and 7: Regarding types of insurance products, first registration and verification, compliance matters, reporting matters, electronic records, and dispute handling of the Insurance Agent or Broker, the Directions Governing E-Commerce of Insurance Enterprises shall apply mutatis mutandis.
 
5.      Point 8:
 
(1)   When an Insurance Agent or Broker uses automated signatory process to conduct online insurance business, after obtaining confirmation or consent of the insurance companies cooperating with the Insurance Agent or Broker and said process is reviewed and approved by the signatories, the applications need not be signed off case by case.
 
(2)   Before using the automated signatory process for the first time, the Insurance Agent or Broker shall convene a conference on online insurance signatory process to (i) review whether the contents of the displayed products are in line with the provisions of the insurance policies, (ii) set up mechanisms for knowing the applicant's needs and the suitability of the product or service, and (iii) check whether the automated signatory process complies with relevant laws and regulations and ensures protection of clients' rights and interests. The minutes of the conference shall be submitted to the general manager of the Insurance Agent or Broker for review and made available for inspection by the FSC.
 
(3)   After adopting the automated signatory process, the Insurance Agent or Broker shall conduct a compliance review on matters stipulated in paragraphs (1) and (2) of this item 5 at least once every quarter. If the laws or regulations relating to online insurance business are amended or a new type of product is added, the Insurance Agent or Broker shall process relevant matters to comply with paragraph (2) of this item 5.
 
6.      Point 9: Premiums for policies approved online shall be paid by the applicant to the insurance company.
 
7.      Point 10: In order to confirm the online insurance applicant's intention to proceed with the application, except for an applicant obtaining compulsory automobile liability insurance solely, the Insurance Agent or Broker shall execute relevant procedures to confirm the applicant's intention.
 
8.      Point 11: Stipulating the rewards and punishments for Insurance Agents or Brokers conducting online insurance business complying with/violating the relevant requirements.

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