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The Insurance Act was amended on 29 June 2011, which is summarized as follows:
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In response to the passage of the Personal Data Protection Act, which has yet to take effect, insurers and insurance agencies are allowed to collect, process or use medical records, health examination results or other similar data of others if relevant statutory requirements are met and the data subjects have agreed in writing (Article 177-1).
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To subject insurance agents, brokers and loss adjusters to closer supervision and deter sale of "underground policies" (i.e., insurance policies not approved by the competent authority) so as to protect customers, new provisions are provided as follows:
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All insurance agents, brokers and loss adjusters now have to pay deposits and purchase liability insurance and/or guarantee insurance within a certain period of time; otherwise, their permits or licenses will be suspended or revoked (Paragraph 5, Article 163).
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For any breach of the Insurance Act or improper business activity, the competent authority may order the relevant insurance agent, broker or loss adjuster to rectify the breach or correct the improper activity within a certain period of time and may additionally limit its business scope, order removal of a manager or employee or directly remove or suspend a director or supervisor (Article 164-1).
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All insurance agents, brokers and loss adjusters have to comply with relevant operational and financial regulations, establish an internal audit system, solicitation regulations or rules, and cooperate with the competent authority on any on-site audit conducted by the competent authority or when being ordered to report their business situation within a certain period of time. Any violation will result in an administrative fine ranging from NT$300,000 to NT$3,000,000 (Articles 167-2 to 167-4).
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In the past, the sale of offshore policies was only subject to an administrative fine, no criminal liability. However, after this amendment, insurance agents, brokers and loss adjusters will face a three-year jail term and a criminal fine of NT$3,000,000 to NT$20,000,000; for a serious violation, their business licenses or permits may even be suspended or revoked. Seeing the severe liability, insurance agents, brokers and loss adjusters should be more cautious conducting their business to avoid any violation (Paragraphs 1 and 2, Article 167-1).
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