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On 2 July 2003 the Ministry of Finance an-nounced amendments to its Regulations Gov-erning Insurance Companies. Their main points are as follows:
If a Taiwan branch office set up by a foreign insurer fails to begin operations within six months after obtaining an insurance opera-tional license, then unless an extension has been granted (maximum of one extension of up to six months), the competent authority may revoke the insurance operational license.
In addition to branch offices, insurers may set up other branch institutions in Taiwan (such as correspondence offices or liaison offices) ac-cording to their needs, but such offices may not undertake commercial activities, such as issuing policies or binders.
A foreign insurer may establish a liaison and representative office in Taiwan with the ap-proval of the competent authority. Such an office may transmit documents such as reports and notifications, answer inquiries on insur-ance matters, liaise on policy and claims mat-ters, and carry out other business-related liai-son activities, but it may not engage itself in other commercial activities.
An insurer that undertakes lending in accor-dance with the Insurance Law must establish internal procedures for handling such matters as credit assessment, loans approval, and re-view, and must also comply with the re-quirements of the competent authority.
An insurer must transfer funds to the insurance stabilization fund monthly, by payment into a designated account.
An insurer that ceases operations for more than six months must apply for dissolution, and return its insurance operational license for cancellation.
Before passing a resolution to dissolve, an insurer must draw up a plan to uphold the in-terests of its insurance applicants, insured and beneficiaries, and present the plan to the competent authority for approval.
An insurer that makes reinsurance arrange-ments must draw up a reinsurance plan, stating the method of reinsurance, the amount of re-insurance, the value of retained risk for each exposure unit or insured event, an evaluation of the financial status of the reinsurer, the criteria used for selecting the reinsurer, and the method of securing reinsurance claims.
