The Financial Supervisory Commission (hereinafter, the “FSC”) promulgated the Regulations Governing the Handling of Online Insurance Business and Online Insurance Services by Insurance Agent Companies and Insurance Broker Companies (hereinafter, the “Regulations”) via the Jin-Guan-Zong-10704566251 Directive of October 24, 2018. Consisting of 18 articles in total, the Regulations came into effect on the day of their promulgation. The Regulations are highlighted below:
1. Under Article 2 of the Regulations, an “insurance agent or broker company” shall refer to a company organized as a company to operate insurance agent or broker business and a bank which concurrently operates insurance agent or broker business with the approval of the competent authority; an “online insurance business” shall refer to the business of entering into or formulating an insurance contract with an insurance company through the webpages of an insurance agent or broker company after a natural person applicant completes the registration and identity verification procedure; and “online insurance services” shall refer to all kinds of insurance services other than online insurance business which are handled by connecting with insurance companies through webpages of insurance agent or broker companies after the existing insurance customers of insurance agent or broker companies have completed registration and identity verification procedure.
2. An insurance agent or broker company applying for “online insurance business” shall meet the following qualifications: (Compare Article 5 of the Regulations)
(1) They have set up and implemented internal control, audit and solicitation systems and procedures pursuant to the Regulations Governing the Implementation of Internal Control and Audit System and Business Solicitation System of Insurance Agent Companies and Insurance Broker Companies.
(2) They have not been subject to any major sanction or cumulative penalty of more than NT$1 million by the competent authority in the past year or matters relating to their sanctions or penalties have been specifically improved and recognized by the competent authority.
(3) They have retained a certified public accountant to handle the audit and certification of annual financial reports.
(4) They have received ISO27001 certification, an international standard for information security management systems, and set up a network traffic filtering mechanism for distributed denial-of-service attacks (DDoS).
3. Obligations that shall be performed by insurance agent or broker companies in handling “online insurance business”: (Compare Articles 4 and 9 through 15 of the Regulations)
(1) Retroactive insurance application shall not be accepted for online insurance business.
(2) A dedicated online section or webpage has been deployed at the company or the company has set up a mobile APP insurance application platform (hereinafter, the “Official Disclosure Platform”) to provide product descriptions, full text of insurance policy clauses or links and important contents and descriptions concerning insurance products for the consumers to review and indicate their agreement.
(3) If the insurance products are traditional personal life insurance, an agreed-upon period for reviewing an insurance contract shall be provided to the consumers.
(4) Insurance application and identity verification operations shall be set up.
(5) Reported information shall be sent to the insurance companies in real time.
(6) With respect to payment operation involving online insurance applicants, the payment shall be made by the insurance applicant to the insurance company.
(7) Random telephone interviews shall be conducted to verify the intent to obtain insurance.
(8) For online insurance business which conducts signing operation through an automatic system, relevant verification operations shall be conducted.
(9) It shall be confirmed that the cost savings achieved by the insurance companies they represent or partner with are reflected in the surcharges for insurance products.
4. With the exception of Paragraph 3 above, an insurance agent or broker company handling “online insurance business” and “online insurance services” shall also carry out the following obligations: (Compare Articles 4, 7, 8, 16 and 17 of the Regulations)
(1) The Official Disclosure Platform shall be set up at the company.
(2) It shall be confirmed that the insurance companies they represent or partner with have followed the Notice for Electronic Commerce Handled by Insurance Companies. The types and scope of insurance products which may be handled by an insurance agent or broker company as part of online insurance business shall be limited to the types and scope of insurance products whose online application may be handled by the insurance companies they represent or partner with.
(3) An option should be provided to insurance customers to handle the registration and identity verification operation either online or in person pursuant to Article 8 of the Regulations.
(4) Electronic records indicating the consumers’ choices or consent shall be backed up and saved.
(5) The provisions of the Regulations shall be included as internal control and internal audit items.