TAIWAN Law and Practice Contributed by: Robin Chang, Sarah Wu and Eddie Hsiung, Lee & Li
Regulations, an insurance company shall estab - lish internal systems and procedures for policy underwriting, which shall include, among others, the following: • The qualifications, job descriptions, on-the- job training and reward/discipline of under - writers. • Procedure and flow chart covering the pro - cess from acceptance of application to agree - ing to underwrite a policy, including at least underwriting guidelines, financial underwriting mechanism, survival analysis and physical examination standards, insurance report - ing mechanism, hierarchy of authority, and arrangement of reinsurance. • The policy of understanding and evaluating the needs and suitability of the applicant and the insured. • The operating procedure for evaluating whether the insured amount and premium payment are commensurate with the income, financial situation and occupation of the applicant or the insured. • The operating procedure for evaluating the suitability of selling insurance products with surrender value (excluding small-amount whole-life insurance, group annuity insurance and accident insurance with an insurance period of less than three years) to customers over 65 years of age and considering whether the customer has the ability to distinguish situations that are disadvantageous to his or her rights and interests as an insured. • The operating procedure for evaluating whether the sources of funding for payment of insurance premiums is from a terminated insurance contract, loan or policy loan. • The operating procedure for confirming the identity of the applicant and that he or she has indeed purchased a policy, the identity of
the insured and that the insured has given his or her consent to the policy purchased. • The operating procedure for confirming that a designation or change of beneficiary has been consented to by the insured. • The operating procedure for confirming that the applicant has indeed applied for a change to the content of the insurance contract that would affect risk assessment, and the iden - tity and signature of the applicant and the insured. • The operating procedure for the manner and duration of retaining and disposing of the per - sonal data of the applicant, the insured and the beneficiary of policy applications, whether they were underwritten or not. • The operating procedure for evaluating risks and the calculation and collection of insur - ance premiums shall be based on actuarial science and statistical data. 8.2 Treatment of Different Types of Insurance Under the Insurance Act, insurance is classified into two main categories: “non-life insurance” (covering fire, marine, land and air, liability, bond - ing and other non-life insurances) and “insur- ance of the person” (covering life, health, per - sonal injury and annuity insurances), depending on the nature of the insured subject. As stipu - lated by the Insurance Act, “non-life insurance” enterprise is exclusively involved in non-life insurance activities, and an “insurance of the person” enterprise solely engages in insurance of the person. Simultaneous involvement in both non-life insurance and insurance of the person by the same insurance enterprise is generally prohibited, except when a non-life insurance enterprise is granted approval by the FSC to carry out the businesses of personal injury insur - ance or health insurance.
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