TAIWAN Law and Practice Contributed by: Daniel T H Tsai, Lee and Li
In 2025, the FSC liberalised the scope of business and operating models for insurance companies. To avoid any potential misunderstanding arising from the terminology, the original term “online-only insurance company” was revised to “digital insurer”. In addition, on 30 July 2025, the FSC issued a notice (Ref No Jin-Guan-Bao-Zong-Zi No 11404928771) concerning amendments to the relevant regulations. For exam- ple, Article 29-3 of the Regulations for the Establish- ment and Administration of Insurance Enterprises now reduces the minimum paid-in capital requirement to TWD500 million for digital non-life insurance compa- nies and NT$1 billion for digital life insurance com- panies. Furthermore, the application deadline for the establishment of a digital insurer has been removed, thereby allowing industry players greater flexibility and more time to assemble management teams and develop viable operating models. The FSC has also permitted foreign insurance enterprises to apply to establish digital insurance branches in Taiwan. Moreover, an online-only insurance company must submit a successful business model and have a pro- moter engaged in big data analysis, interface design, software development, IoT, wireless communication, or other financial technologies. The business plan sub- mitted by an online-only insurance company should include items such as: • customer identity verification mechanisms; • an assessment by a certified public accountant to ensure the budget is sufficient to meet the needs of such an information system and to operate the business properly for the next five years; and • plans for the business model and insurance prod- ucts. In order to enable prompt basic protection in case of injury or death caused by a micro-electric scooter accident, Taiwan passed the draft amendment of the Enforcement Rules for the Compulsory Automobile Liability Insurance Act in November 2022. This pro- vides that owners of micro-electric scooters must pur- chase compulsory liability vehicle insurance. On 10 August 2023, in response to Taiwan’s financial technology development and digital transformation in recent years, the FSC has amended several regu-
lations in “Directions for Operation Outsourcing by Insurance Enterprises” to strengthen the control of the risk management principles and operating procedures in connection with the outsourcing operations of an insurance enterprise (Articles 4 and 7). Besides, if a service provider violates any provision of the above- mentioned directions or other regulations, the compe- tent authority ‒ in view of the severity of the violation ‒ may: • notify the insurance enterprise to terminate the outsourcing per the outsourcing agreement; • require the insurance enterprise to make improve- ments within a given period of time; or • temporarily suspend the outsourcing until improve- ments made by the service provider are confirmed (Article 20). Moreover, according to Article 18 of the above- mentioned directions, an insurance enterprise must comply with the following rules when its outsourced operations involve cloud services. • The insurance enterprise shall formulate policies and principles for using cloud services, adopt appropriate risk management and control meas- ures, and heed the proper diversification of opera- tions outsourced to cloud service providers. • The insurance enterprise shall take the ultimate responsibility for the supervision of cloud service providers and shall possess the professional skills and resources to supervise the cloud service providers’ execution of outsourced operations. If necessary, it may request professional third parties to assist in their supervision operation. • The insurance enterprise may appoint an inde- pendent third party with expertise in information technology at its sole discretion or together with other insurance enterprises that outsource to the same cloud service provider to conduct audits and shall comply with related rules. • Where the insurance enterprise transmits and stores customer information at the cloud service provider, it must adopt customer data encryption, tokenisation, or other effective protection meas- ures and establish appropriate encryption and key management mechanisms.
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