AMENDMENT TO "REGULATIONS GOVERNING ESTABLISHMENT AND ADMINISTRATION OF FOREIGN INSURANCE ENTERPRISES"

03/01/2009

---

The Financial Supervisory Commission ("FSC") promulgated the amendment to the "Regulations Governing Establishment and Administration of Foreign Insurance Enterprises" on February 23, 2009.  It aims to differentiate the administration between branches and representative offices established by foreign insurance entities in Taiwan, and to articulate the regulations governing establishment of representative offices.  The main points are summarized as follows:

             

	Ÿ	In order to better understand the insurance industry and business environment in Taiwan, a foreign insurance entity, which has been established in its domain country for less than three years, must establish a representative office in Taiwan for more than a year prior to its application for establishment of a branch in Taiwan .  (Article 6)
	Ÿ	A foreign insurance entity must satisfy the statutory requirements, with sound credit rating and no material disciplinary records for breach of law to be qualified to apply for establishment of a representative office.  (Article 27-1)
	Ÿ	A foreign insurance entity must report to the Ministry of Economic Affairs for registration of establishment of a representative office within six months upon approval of the FSC.  Prior to expiry of the foregoing six-month period, such foreign insurance entity may, with a justifiable cause, apply for extension up to two months and such extension is limited to once.  (Article 27-3)
	Ÿ	A representative office may conduct survey and research for business information, collection of information and other relevant business correspondence matters.  However, being different from a branch, a representative office may not engage in business solicitation, underwriting, handling of insurance claims, premium calculation or any other business operations.  The FSC may revoke its approval upon any violation of the foregoing.  (Article 27-4)
	Ÿ	A representative office must file its Taiwan work report with the competent authority within four months after the end of the fiscal year of its foreign head office.  (Article 27-5)
	Ÿ	Upon request of the competent authority, a representative office must cooperate and submit work report or other relevant information.  (Article 27-6)