Newsletter
Amendments to Regulations Governing Insurance Agents
The Regulations Governing Insurance Agents (the "Regulations") were stipulated pursuant to Paragraph 4 of Article 163 of the Insurance Act and issued and implemented on March 20, 1969. To adapt to the changing operating environment in the insurance market, the opening up of insurance agent business, and to strengthen management of insurance agents' business execution or operations, after twenty-six amendments, the latest amendment was issued on November 18, 2019.
To adapt to the establishment of internet-only banks, strengthen the supervision of responsible persons of agent companies, promote sound operation of agent companies operating insurance agency business and banks concurrently operating insurance agency business and strengthen their financial structure, strengthen the protection of rights and interests of insurance customers with electronic insurance policies, the Regulations were amended with reference to the Regulations Governing Required Qualifications for Responsible Persons of Insurance Enterprises and the Regulations Governing Business Solicitation, Policy Underwriting and Claim Adjusting of Insurance Enterprises and in response to practical operational needs. The regulations include 61 Articles, and 11 of the Articles were amended in this amendment. Key points of the amendments to 3 of the Articles are as follows:
1. To promote sound operation of agent companies which operate insurance agency business and banks which concurrently operate insurance agency business and strengthen their financial structure, this amendment stipulates that the agent companies newly applying for operating insurance agency business shall meet the post-amendment minimum paid-in capital requirement. This amendment also stipulates that when a licensed agent company has transferred in total over fifty percent of its equity or paid-in capital, except for transfer due to succession, the minimum paid-in capital shall be adjusted to meet the post-amendment requirement within the prescribed time limit. (Amendments to Articles 16 and 17 of the Regulations)
2. To prevent agent companies and banks which concurrently operate insurance agency business from persuading customers to terminate old insurance policies and then purchase new ones, which will damage the rights and interests of customers, this amendment stipulates that if the source of funds for the premium payments is the termination of an old policy, the customer must be clearly informed of the loss of the rights and interests related to the insurance policy due to the termination thereof and purchase of a new policy. This amendment also stipulates that the banks concurrently operating insurance agency business shall establish relevant verification mechanism and conduct phone interviews with regard to customers whose source of funds for the premium payments is the termination of an old policy. (Amendment to Article 33-1of the Regulations)
3. To strengthen the supervision of insurance agency business, this amendment stipulates that independent agents, agent companies, and banks executing and operating the insurance agency business must not fill in solicitation reports untruthfully nor persuade clients to rescind or terminate contracts. (Amendment to Article 49 of the Regulations)