May 2023
Oli Wong and Lilian Hsu
Taiwan’s Financial Supervisory Commission (hereinafter, the “FSC”) began to accept the establishment application of neo insurers in August 2022.[1] Two operators in total have applied to establish neo insurers.
The application for the Preparatory Office of Formosa Insurance Co., Ltd. was rejected by the FSC on December 22, 2022 on grounds including: the lack of promotors who are from the financial industry and specialize in FinTech, the failure of the promotors to pay the initial capital in advance, the absence of a statutory equity structure, and failure to provide the amount of paid-in capital and the funding sources,[2] etc. Also, the application led by the Preparatory Office of Chinatrust Neo Insurance Co., Ltd. (hereinafter, “Chinatrust Neo”) was put on hold by an FSC resolution on March 30, 2023. After considering the stability and feasibility of Chinatrust Neo’s business model, the FSC determined that it was not comprehensive enough, and that there is room for improvement in terms of product innovation relating to neo insurance. In addition, the reasonableness of the financial forecasts needs to be strengthened.[3] Therefore, following the reviewers’ comments opinions were raised, it was decided to put the application on hold.
Although the FSC has not yet approved any applications for the establishment of a neo insurer, it maintains an encouraging attitude towards the development of new business models and innovative products. The FSC further stated that it will continue to assess the feasibility of accepting the establishment application of neo insurers based on the development trends in the insurance market by the end of this year.
[1] Please refer to the Lee, Tsai & Partners Newsletterdated August 2022: The Financial Supervisory Commission of Taiwan Will Begin to Accept the Application for the Establishment of Neo Insurers in August 2022
[2] FSC’s newsletter dated December 22, 2023 at https://www.ib.gov.tw/ch/home.jsp?id=239&parentpath=0,2,238&mcustomize=news_view.jsp&dataserno=202212220004&toolsflag=Y&dtable=News (last visited: 24 May 2023)
[3] FSC’s newsletter dated March 30, 2023 at https://www.ib.gov.tw/ch/home.jsp?id=239&parentpath=0,2,238&mcustomize=multimessage_view.jsp&dataserno=202303300002&aplistdn=ou=news,ou=multisite,ou=chinese,ou=ap_root,o=fsc,c=tw&dtable=News (last visited: 24 May 2023)
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