Newsletter
NEW REGULATIONS GOVERNING ESTABLISHMENT PERMIT AND ADMINISTRATION OF INSURANCE ENTERPRISES
On 9 January 2008, the Financial Supervisory Commission promulgated new Regulations Governing Establishment Permit and Administration of Insurance Enterprises , and repealed the old Insurance Companies Establishment Criteria and the Insurance Enterprises Administration Regulations. The new Regulations are comprised of thirty articles. The main content is outlined below:
‧The minimum paid-in capital for a newly established insurance company is NT$2 billion, which the promoters and shareholders must pay in cash. When applying for an establishment permit, the promoters must pay in at least 20% of the minimum paid-in capital. Before commencing business operations, the newly established insurance company must complete operational testing of its major business computer systems (Articles 2, 3, and 5).
‧Directors, supervisors, and managers must comply with the Criteria for Responsible Persons of Insurance Enterprises. A person who meets any of the conditions as set out in Paragraph 1, Article 3 of the above Criteria may not be a promoter of an insurance company (Article 4).
‧The collection of initial capital payments must be handled by a financial institution, and the fund must be deposited in an exclusive account in the name of the preparatory office of the insurance company. Unless otherwise provided by law, the capital payments deposited in the exclusive account may not be paid out prior to the commencement of business operations (Article 7).
‧A newly established insurance company must apply for an establishment registration with the Ministry of Economic Affairs within three months after the date on which the payments of the company's paid-in capital have been collected in full (Article 10).
‧A newly established insurance company must pay various fees and file with the competent authority relevant documents (newly added the name list of important employees, such as the chief auditor and the chief legal compliance officer) within three months after the establishment registration is duly completed, in order to apply for an insurance operational license (Articles 11, 13, and 14).
‧The company's rules must cover the following matters: (1) organization structure and departmental responsibilities; (2) personnel allocation, management, and training; (3) internal control systems; (4) operating principles and policies; and (5) operating manuals and delimitation of powers and responsibilities (Article 12).
‧If a single shareholder of an insurance company increases its shareholding to exceed 15% of the company's total issued shares, the in-surance company must report to the competent authority with a statement of sources of funds (Article 18).