The Taiwan High Court rendered the 105-Bao-Xian-Shang-Yi-18 Civil Decision of January 25, 2017 (hereinafter, the “Decision”), holding that a policy value reserve is merely a basis for calculating the amount payable by the insurer to the legitimate recipient, and the insurance applicant has no right to claim the policy value reserve from the insured at any time under the insurance contract.
According to the facts underlying this Decision, A filed a motion for compulsory enforcement of B’s claim to an insurance value reserve from Insurer C (hereinafter, the “Reserve Claim at Issue”). Since Insurer C filed a motion to object the compulsory enforcement on the ground that the Reserve Claim at Issue did not exist, A sought a declaratory judgment to confirm that B’s Reserve Claim at Issue to Insurer C existed.
According to the Decision, the policy value reserve under the Insurance Act is a reserve relied on by an insurer for the calculation of the interest rate for an insurance contract premium and the risk probability and is calculated in a manner stipulated by the competent authority. Only when a cause under the Insurance Act occurs or the insurance contract is terminated is the insurer obligated to pay the amount calculated based on the policy value reserve. In addition, the nature of a policy value reserve is nothing more than a basis for calculating the amount payable by the insured to the legitimate recipient. Therefore, the insurance applicant has no right to claim the policy value reserve from the insurer at any time as per the insurance contract.
It was further pointed out in the Decision that when Insurer C received the attachment order for the enforcement of this matter, no statutory cause under the Insurance Act had occurred to the insurance contract. In addition, B also had not indicated any intent to terminate such insurance contract. Therefore, B had no right of claim over Insurer C at that time, and A’s complaint was dismissed.